simple strategy to start earning by stock trading

    In this I post I gonna share the simple strategy which I learned out of my experience. Here I am not going preach you saying this is the best strategy which is never failed, it gives 100% return, no loss, you can make 100 profit all the time… NO...NO…NO. I am not gonna up sell any product or anything by saying all this false statements. I just want to share a logically understandable strategy which I learned out of my experience.

            I started learning about stock market investing and trading at the age 18 which is mid of year 2008. Later after doing all ground work on theoretical knowledge of how stock market works finally I entered market by the end of 2010. With little money and little practical knowledge I invested in a midterm stocks as a swing trader and after spending nearly 6 months I made jest Rs.283 net excluding all brokerage. After this for couple of years I involved in swing trade and end up making very little profit and few times I end up making 30%-50% loss. After spending two years on swing trades one fine day i  completely withdraw all my cash from by demat account and stopped trading.

           During the break I stated digging reasons for my failures and started doing all the home works as earlier I did couple of years back. This time I have better knowledge I can understand the reasons for market fluctuation and I can figure out which kind of news affects market and I also learned what are those factors which drive the market. I understood that combination of technical factor along with sentimental factor works out with better success rate.

            I personally consider four technical factors Exponential moving average (20&50) , MACD, RSI  and trend lines along with news and other sentimental factors are the best tool to understand the direction of the market. Below are few screen shorts   to understand it better.

          

       The above picture is the chart of nifty during august to October. In this picture you can see a red circle marked 9^th of September, on that particular day the daily candle touches the upper circuit of trend line which I draw using previous highs and MACD is well above 150 (Positive) and RSI is above 70 . This shows Nifty will be moving downside for next couple of weeks , But confirm this market direction along with other sentimental factors such as forthcoming event and news. This down side trend continues till mid of October , this can be seen in the below  picture.

              In the above picture trend seems to change during mid october. Daily candle touches the bottom side of trend line which I draw connecting previous lows. RSI falls below 40 and MACD crosses negative 100. These technical factors shows nifty will be moving upwards for next few weeks. In the above picture you can see the upward trend continues till 1^st December.

 

            In the above picture  those candle marked in red indicates down side trend and those candle marked with green circle indicates upward trend.  Whenever the RSI cross above 70 and along with that MACD cross above Positive 150 and daily candle touches trend line it clearly shows stock gonna move downwards and whenever RSI falls below 30 and MACD falls below negative 100 and daily candle either touches lower side trend line or daily candle falls below 20day EMA (Exponential Moving Average) and touches 50day EMA it clearly indicates the stock is on over sold region hence gonna move upward in near future.

          The above said strategy along with stock specific news and market driven events or news helps to predict future stock movement with better success rate. This indictor is not specific for nifty. You can use this indicators on any stocks , it gives better prediction.

         I started using this strategy in futures and options and I made good return out of it. But I strongly suggest you, never start you trading career neither in future nor in options. Always start trading stocks with limited risk once  you get hold of it then move on to derivatives. Any blind strategy will never give good result always gain basic knowledge on all technical factors and keep yourself updated on all upcoming events and news. I am not gonna promise you that this strategy will never fail, the reason I write this post is I have made profit using this strategy hence I just want to convey this to you all. I strongly believe to any trader strategy build on his won is a best strategy.