How to Locate Strong Setups -4 !!

(SS) Strong Setups Series - 4

So now we have 2 things clear -
1) Bias
2) Squeeze formation

If not clear, plz re-read again and then move on to the Trigger- The Entry Pattern !

As we are looking for only strong setups, so we will get lesser opportunities with high strike rate ! so its worth waiting

Now when the squeeze is evident, Mark two DP zones (Support / Resistance) - One on the Pivot high before squeeze, another on the Pivot Low of Squeeze start.
For our entry, we should be looking for a candle formation on UBB or LBB touching this DP. If the Bias is Up, then look for a candle formation on UBB first then on LBB and Vice Versa. 
Any candlestick pattern you love - like Engulfing, Hammer, Doji... whatever the names are (and i am least bothered about it), it should have break of UBB with few points and then moved to LBB. 
The candle can be bigger or can be smaller.. It can be with high volume or low volume.. we seriously don't need these things, all we need is a breakout of UBB followed by breakout of LBB in a Squeeze with Up bias. Yupp, DP touch is a must !!
Let me give an example here with Nifty 15 min chart- In an Up Bias, 2 squeeze are formed..


(1) First touch to UBB + DP. we are waiting for LBB touch
(2) Second touch to LBB + DP. 
Now any RED Candle High break is our Entry with SL below it.
(3) First Touch to DP, but not BB so avoid
(4) First touch to UBB + DP, wait for LBB
(5) Second touch to LBB + DP. Any Red candle High break is our entry !!

Watch the Entry candles below marked with pink circles..


Just practice this, and will come up with Targets/ Money Management & few Situations to avoid...

How to Locate Strong Setups -3 !!

(SS) Strong Setups Series - 3

Now you can know the bias of market -Up/ Down Sideways, what's next?

Next is my favourite Bollinger Bands.. We should use default settings of Bollinger Bands (20,2) as i am of the view, we should see what all people are looking at & infer with same information.

We are not gonna use any other kind of Support Resistance.. Lets keep the chart as cleaner as possible..

2nd Rule - Wait for BB Squeeze. but the challenge is to identify the squeeze. It looks like marked in below Nifty 15 min chart. Plz go through below questionnaire after the chart to get some clarification..

- What is the squeeze exactly ?? - When both of the Bollinger bands come nearer to each other and both BB are Flattish -neither Up or down (lesser than 20 degrees angle approx.. yeah yeah,, no need to measure with a protector, use naked eye). See the BB as marked above.

- How much nearer is nearer?? - Just have a look at the past candles & BB behaviour. From a bigger volatility, the mkt must have come to little volatility. Some people use ATR (14) for the purpose, but i like naked BB.

- When should we say the squeeze have started?? - When more than 5 candles formation is completed without touching any of the BB, we can say our desired Squeeze has started. Below Nifty 30 min chart has just formed one !!

- Shall we enter on break of Squeeze on touch or a Close outside BB (COBB) ?? - NOOOO, You will be Trapped !!

Will get back with few more examples & the Entry Pattern .. till then keep looking and analysing old Squeezes.. Its Fun to see how much it forms and how much time the mkt is in it especially in lower time frames...

How to Locate Strong Setups -2 !!

(SS) Strong Setups Series - 2

Hey All, I am back after a long break !!  Hope everyone is doing great ..

Lets come back to Business ! Strong Setups-  For me, Price & Bollinger is all it requires to locate them. I am an intraday Nifty player, so will be fetching the charts of max 30 mins..  

1) Base of the Strong setups is to identify your Bias- Up or Down (yes No Sideways). We don't need any stupid thing to identify Trend.. If The Price is at the Right Upper edge of chart its Uptrend & if Price is at Right Lower edge, its Downtrend. Keep it Dirt simple !!

Lets see in below charts- One is Daily Chart & next is 15 min Nifty chart-

I am not gonna tell the answer, You are absolutely Right !! That's it, Is it too difficult to identify trend?  This gives us our 1st Rule- We will trade only in Trend direction for High probability strong setups, till our 1st Stop Loss gets hit, YES,  till our 1st Stop Loss gets Hit. Trading is Painful journey, Embrace.. 

(Though we will reduce this SL hitting chances considerably, but be prepared for all consequences)

This SL hitting really works, this helps in getting in each & every setup without any doubt, thereby increasing the effectiveness of system.

Trading is a probability game. If you will not take each & every trade, till you click the counter upto 30, you will eventually stuck in Bad trades & will loose the Best Ones  cursing ME :(

Now fetch some of the stock charts & check the trend thinking what should had been done today  trading them !

How to Locate Strong Setups !!

(SS) Strong Setups Series - 1

A lot of People ask me -"How to locate a Trade setup !!"  I always tell them, setups are everywhere, which can be traded also, but one should wait for a Strong trade Setup! That is more important !

Now the question is still Open - Which setups are Strong?

--This can't be put in a single post, so will try to explain in a series of posts.. Kindly have patience & go through with me in this whole journey, you will find it interesting & profitable too ! It will be written taking into consideration of novice traders with basic knowledge. I will try to analyze the live market setups (positional with the system). Lets see how it unfolds --

Lets start from a different angle-  Traders.
Every Trader is different. Each trader is unique with Unique personality, monetary needs, different trade size, risk capacities, Psychology, Fear levels, satisfaction levels, indicators & so on.
Remember, every damn indicator can work & works, if followed properly. But, every indicator has certain conditions to work. One needs to master few of them only, not over analyzing & paralyzing their decisions.. Look at the chart below with most important & trusted indicators (current Daily Chart of Nifty) if we can conclude the decision-

1) Nifty above all moving averages & EMAs (important ones) - means  UP/ Sideways (in case 1 MA is above)
2) MACD yet to cut down - means UP
3) RSI coming down from overbought zone - DOWN
4) Stochastic clearly DOWN
5) Trendlines - UP
6) Patterns - Rising Wedge - DOWN,  a small inverse H&S - UP & with a target
7) Price action - Higher Highs, higher lows - UP

so which will work & constitute Strong Setup ?  get off the screen & Think for a while below things-
1) Can all indicators/ patterns tells truth?
2) Are indicators really important?
3) Do they Lag?
4) Do we need 1 / 2 or 5 indicators along with PA, trendline...?

----------------------------------------------------
I will come straight to the point -
1) Can all indicators/ patterns tells truth? - Yes, they need to get Interpreted properly. One should use indicators as per traders personality - Example - I  use & Love Bollinger Bands
2) Are indicators really important? - for Positional definitely need to see few & good tool for conformation in Intraday also
3) Do they Lag? - may or may not - like Bollingers & RSI - they don't lag as much as people says.
4) Do we need 1 / 2 or 5 indicators along with PA, trendline...? - One or at the max 2 are enough for use.
Remember, Indicators tell a lie, but they don't lie together!

Anybody can go ahead with any indicator/ without indicator, but i would like to continue this journey with Price action & Bollinger Bands !!

to be continued..