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Today we’ll discuss, how should you take trade whenever any breakout happen on these levels.
“Should you take trade as the stock breaks level, without checking chart and volume at that time?”
Answer is NO, Why?
Let me explain this, lets start with the levels, what is the level of any stock? How can you know the levels?
Levels are Resistance and Support of any stock. We can understand support and resistant by the given screenshot below.
Here I clearly mention resistant and support of the stock which are stock levels. You can see IndusInd stock tried to break resistant 1st time but there is not enough buying volume and stock move to below without breaking level. Again stock tried to break that level and again failed to break. Now in 3rd time stock successfully broke the resistant level and you can see the rally after breaking the stock level with the good buying volume. You can enter on around 917 -919 and book profit according to your risk appetite.
Now you can see other side of stock when this stock breaks its support with good selling volume. So Resistant and Support always as a levels of any stock.
You can now know the levels of the stock, and how the price action works on levels.
Lets come on our topic, when should you enter on our stock levels. As on intraday basis , you need to put 15mins time frame chart and place the given stock level as I have put the horizontal line around 871.41(around 872). Now wait for 15 mins and put the horizontal bar on HIGH & LOW of 15min candle.
When the stock break the 15min candle high, you can buy that stock and place stoploss at the low of 15min candle. Profit is depend on your risk appetite and I always prefer 1% profit to book in intraday or trailing stoploss.
You can try this method on the stocks breakout levels with minimum quantity. Practice this strategy with minimum quantity and when you think you become experienced in that you can go according to your risk. Remember intraday always have high risk so better to practice first and trade then.
We’ll post some more good strategies on regular basis soon.