Day Trading, Dhiraj Style

Different people have different methods and ways of day trading.Some trade using charts , 5 min ,30 min ,10 min some use MA,EMA,RSI,CCI, some also use many equations and formulas like pivot points ,woodies pivot,demark pivot points, camarilla equations, any many more things.

I have been trading the markets with all this and come to conclusion that trading market can be reffered as gentlemans gambling ,u can earn from it definately provided u trade it with proper knowledge and a perfect plan and the main thing is that u must go in for small gains for n number of trades ,which also can be reffered as scalping.


1)Previous days range ( difference in days high and days low) the most important

2)that days high and that days low at 10:15 am after the start of markets

That’s all , earlier I used to trade using all the mentioned things like ma,rsi, adx camarilla equations and all stuff but now I trade in a simple way of using the days range With my studies I have come to a conclusion the if a days range is of 85 points say for any stock say ONGC then it will have three values for the next days for me to trade (that calculation is done by me based on my studies )

Suppose the values I got are 36,63,92 then with this values I will trade for the next day

Say ONGC next day opens at 785 and by 10.15 am it is at 795 neither open or the present value of the stock is important to me ,the thing important to me is the high and low of the stock at 10.15.now here comes three different cases which I will explain u in detail

1)when the difference between high and low ( range ) at 10.15 is less than the first value that is 36
Suppose ONGC has high of 801 and alow of 779 with a range of 22 points <36
Then if the price goes bellows 801 -36= 765 it will definitely go down 0.5 percent more down to 761.2 and this will be my gains
In simple words sell stop loss order at 765 with a buy order at 761.2
Now at 10.15 if the price is at 795 it can go up also so if it goes then I have to take in account of low at 10.15 .so if the rice goes above 779+36=815 then it will deinately go up 0.5 percent up to 819.05
In simple words stop loss buy at 815 and sell at 819.05
If have both ur orders placed then the most important thing is that u must keep a watch on low and high of the stock.suppose at 10.35 its at a low of 770 then u must modify ur stop loss buy order to 770+36=806 from 815 and sell order to 810 from 819.05.in this case ur one order will be the same as the days high will be the same that is 801.
If suppose at 10.35 the stock is at high of 805 then u must modify ur stop loss sell order to 805-36=769 from 765 and buy at 765.2 from 761.2 down 0.5 percent .the second order of urs will be the same as the low will be the same at 779.
If u have any one side of ur order executed with a profit then u must cancel the other two orders .suppose u have stop loss sell and a buy order triggered then u must cancel the other order of stop loss buy and sell order .

2)when the difference between the high and the low at 10.15 is more than 36 and less than 63
Suppose ONGC is at high of 825 and low of 770 at 10.15
Then sell below 825-63=762 and buy at 758.2 down 0.5 percent
Buy at 770+63=833 and sell at 837.15 up 0.5 percent
Here also its important to keep a watch on the days high and low after 10.15 and as per the above example modify ur orders if needed . If u have any one side of ur order executed with a profit then u must cancel the other two orders .suppose u have stop loss sell and a buy order triggered then u must cancel the other order of stop loss buy and sell order.

3)when the difference between high and low at 10.15 if more than 63 and less than 92
Suppose ONGC is at high of 840 and a low of 768 at 10.15 am
Sell below 840-92 = 748 and buy at 744.3 down 0.5 percent
Buy above 768+92= 860 and sell at 864.3 up 0.5 percent .
Same conditions apply as above methods .

If I take in around 100 stocks then out of hundred only three to four stocks are that will not follow the above theory in day trading .

Around 95 stocks when hit the stop loss sell or stop loss buy order go down or up by 0.5 percent respectively . The five stocks which have behaved opposite to the theory will definately will follow this theory the next day and also for more consecutive days .This factor u must use to minimize ur losses u made on that particular day when the stock behaved the opposite way.This is explained in Cash management  and stop losses.

Around 70 to 80 stocks go up or down 0.7 to 1.2 percent after hitting the stop loss buy or stop loss sell orders.( here there is a risk that the price may not go in a single stroke down or up but It will go.)

You must trade in those stocks which have a turnover of around 4 to 5 crores or above daily in trading and having short selling

You must be expert in execution of orders and accurate in ur calculations

You should not panic at any time

cash management and stop loss: 
How I trade and put my stop losses
I take in 20 stocks for trading . I sell or buy one lakh worth of shares of a particular comp.(initial amount which I double as per the requirement )
Now suppose for a stock say ONGC I have my orders as below
Sell below price A and buy at B
Buy above price C and sell at D

1) when the sell below A order is hit , I put a stop loss of 1 percent above the hit price A for stop loss buy .If my buy at B is hit without hitting the stop loss then I will make a profit of 0.5 percent .this is the best fitted condition for the above theory. The same condition is applicable to buy above price C and sell at price D

2)When the sell below A order is hit , I put a stop loss of 1 percent above the hit price A for a stop loss buy.If instead of going at price B the price hits the stop loss then I make a loss of 1 percent(rs 1000 for one lakh wirth of shares) .But at this point I again put order sell below A and modify buy at a price 0.8 percent down of price A ( not at price B which is 0.5 percent down of price A ).Now here the value of stocks ur selling is important .If u have sold shares of one lakh value and booked a loss of one percent then u must sell at the same price two lakh worth of shares ( that is double the value ) but modify buy order at 0.8 percent down from the sell price instead of 0.5 percent down.now when buy order is hit u will profit 1600 rs as compared to a loss of 1000 rs (after ur brokerage charges u still are in profit).This is one of the rare cases in the above theory but u must be prepared to it. The same condition is applicable to buy above price C and sell at price D.

3)when the sell below price A is hit.I put a stop loss 1 percent above the hit price A for a stop loss buy.If instead of going down to price B , stop loss is triggered then I make a loss of one percent . Then I be ready placing another stop loss sell order (but the value of the shares is double)at price A ,and modify my buy order from 0.5 percent down from price to 0.8 percent. But if suppose the price never comes to hit stop loss buy , then for the day I will make a loss of one percent on one lakh worth of shares.

Now to minimize my losses on that day for a particular stock I will double my value of shares to sell or buy the next day (reason if the theory fails for one day then for next 100 percent it will struck and will do for more consecutive days for that particular stock).Here I make up for the loss made by me on the first day on that stock.for e.g on 23/2 I make a loss of one thousand rs (one percent of one lakh) short selling a particular stock .The next day I will sell or buy (as per the above conditions) double the value on the previous day for a  PROFIT MARGIN of 0.5 percent only . Here for that day my earning is rs 1000 on the two lakh worth of shares.which will minimize my loss by done by me on the previous day.

Courtesy: Dhiraj