CLASS NO – 3 NOW WALK (CHART

READING)
DATE – 13/03/2022
BY SHANU TADVI
 Index
 Basket Order (BO)
 Exit
 Moh Maya pattern
 Support and Resistance
 Range-Bound trading
Basket Order (BO)
Basket order is the type of order where you can execute multiple
orders/legs at same time to avoid any slippage. This is used usually
to make hedge. But if there is an issue of Liquidity, the baster order
will not work. In such case you have to initiate hedge manually.
Option which have difference of more than 30 Paisa in Bid and ask
are considered to be illiquid.
To execute order in basket Click on Orders Baskets Create
new basket and name whatever you would like. In the basket you
can execute multiple legs at the same time which enable to
hedge.
Exit
What is exit? Exit is something we do to either save loss or maximize
profit. This is the only reason we exit. Now the question occurs what
would be the best exit ? Some might say that best exit is
below/above vwap/avwap, some say they risk only 1 or 2%. But the
best exit lies in the entry. Meaning your entry it self should be your
exit.
As you can see this is 20 moving average(red line) which acts as
dynamic support and resistance. Whenever price comes near it
take a reaction. If price falls on this average it tends to take
support and if price rise to this average it tends to take resistance
until it breaks. 80% of the time if price has to break this dynamic
support it tends to take gap up/ gap down. Whenever price rise/fall
to this average that makes a great entry/exit. If price near it and
next day if gap up/gap down and sustain you can enter with 20
sma SL. This is the best exit because this is the place where smart
money accumulate/distribute.
Moh Maya Pattern
This is a pattern which is very powerful. It has potential to recover
past losses in a single trade. In this pattern pin bar type candlein dat
time frame is formed outside the band completely. That is the sign if
Moh maya pattern, once you see such candle in this condition you
have to be ready for next day. If on the next day, candle closes
above high of the pin bar candle.. You may take entry of 30,40,50,
small otms weekly.
Once entered in the trade 20 sma is one time exit. Exit is very
important and necessary, if you cannot exit yourself, market will exit
you and that will be bad. The one who exit on 20 sma has also entry
on 20 sma for short. This is called 4th Sigma rule. Once exited in a
profit in a particular instrument, taking position opposite side at
resistance/support.
In CIPLA at 11/03/2022, it broke a weekly range and had been
spotted in Gainers list of nseindia.com and market also happens to
be in green that day. Once the weekly resistance was broke the
price reversed back near vwap which was the best entry. It is very
hard for price to come below vwap and close it since weekly
resistance was broken and sustain over one hr. This is example of
another best entry and exit.
What is Support and resistance ?
Support and resistance is an area from which price tends to reverse.
It is not necessary that price will always reverse but if price has
reversed from that area couple of times then it would reverse this
time too. This is the basis of Support and resistance trade. There are
two types of Support and resistance 1) Static 2) Dynamic.
Static Support and resistance are namely Pivots, CPR and Previous
Resistance (PR) and Previous Support (PS).They are based on Price
Dynamic Support and resistance consist of Moving Average,
Avwap, Bollinger band etc. They are based on Price average.
Whenever a support or resistance breaks and sustains it becomes
resistance and support respectively.
As you can see whenever price hits Previous resistance it reverses.
Trading on basis of assumption that it would reverse from
support/resistance is called Support and Resistance trade which is
the best trade to take. But if price breaks resistance and sustains
then it acts as support and vice-versa. For a break out to be confirm
price need to close above the high of breaking candle and vice-
versa.
Range-Bound trading
Whenever you find a stock having six month or more time period
Resistance and support mark it. Whenever you see price coming
near resistance and taking a resistance take a short position and
exit on support. If price is getting support you can reverse the
position and exit when price near resistance again. This is called
range bound trading. This is one of the safest trading and to give
loss range needs to be broken.