DEMAND AND SUPPLY

TRADING FOR LIVING

Learn Real Day Trading

Believe me and read it carefully it will make your

journey of learning day trading very easy and
interesting.

This ebook is a game changer for intraday trading

learners
.

The market speaks it’s own language.That

language is price action.
As we have heard many times that trading is
simple but not easy.

This saying is hundred percent true in the

market.many traders join the market to trade
without getting any proper knowledge of technical
analysis.suppose you are a doctor of bone but
you don’t know how to read the x-ray so now you
imagine how will you treat the fractured bone.in
the same way if you don’t know technical analysis
which is compulsory to know to be a profitable
trader, you can never be a successful trader
without the knowledge of technical analysis.you
can not read the candlesticks chart and if you
cannot read the candlsticks chart,you can never
be a successful trader.and many traders do not
know that knowledge of technical analysis is also
very important to be a successful
investor.technical analysis tells the right time to
invest in the market at cheap levels.

So in this ebook I will discuss one of the best

concepts of technical analysis.and Believe me if
my readers complete this ebook with full
concentration and follow it’s concepts which are
mentioned by me in this ebook,I assure them that
they are going to be a successful profitable trader
just after finishing this ebook.
I have directly discussed the concepts in this
ebook.because according to me this is not an
ebook on trading.i have written this ebook as a
paid course,I assume that some of you must have
bought technical analysis paid courses but I think
many paid courses are useless,when you apply
the concepts which you get from the paid courses
do not work effectively in the Live real market.

But here my motive is very clear,I do not want to

cheat anyone.whatever I have mentioned in this
ebook work effectively if you apply the concepts
properly in the Live market.

And the knowledges of technical analysis which

have been provided in this ebook is enough to
make my readers a successful trader.i have
discussed every parts of trading which a trader
need to be a successful profitable day trader.so
read it carefully and enjoy the journey of day
Trading.
Note:- If my readers need more advanced concepts of technical
analysis or any help,they can contact me through my gmail id
given at the last page of this ebook. I am ready to help my
readers if they face any difficulties in the journey of day Trading.

DISCLAIMER

The author is not responsible for any losses and

profits which you will make on the basis of knowledge
which are given in this ebook.It must be understood
that a very high degree of risk is involved in Trading
securities. the author assumes no responsibility or
liability for trading Results.It should not be Assumed
that the methods, techniques or indicators presented
in these products Will be profitable nor that they will
not result in losses. In addition,the Indicators,
strategies and rules are provided for informational
and educational Purposes only and should not be
construed as Trading tips or advice. Examples
Presented are for educational purposes only.
Accordingly, readers should not Rely solely on the
Information in making any trades or investments.
Rather, they Should use the Information only as a
starting point for doing additional Independent
research in order to allow them to form their own
opinions Regarding trading and investments.
Investors and traders must always consult With their
licensed financial advisors and tax advisors to
determine the suitability.
“Happy journey”-There’s no such thing as a free lunch
GOD BLESS YOU ALL ,BEST OF LUCK……….,
Happy financial journey.”work hard smartly and get success.

• Hello Readers,very warm welcome to you all.Lets start the journey

of trading together in a effective way.Trust me After reading and
understanding all the things which I have taught in this ebook.you will
not need any other paid courses or books to learn day trading.this
ebook especially written from the perspective of day trading.The
amount which you have paid is very low when you will compare to the
knowledge which you will get from this ebook.
• I am not making fake promises from you.my intention was never to
cheat my readers.Believe me I will never betray you.only I request
you all please read the ebook very carefully and understand it
deeply.its going to change your trading journey.thank you.

LET’ S START THE JOURNEY OF GENUINE REAL TRADING.

• This is fully based on price action and volume analysis.we will not
use any indicators.but for more comfort and convenience we can use
Bollinger band and supertrend.i will tell you why ahead.
• This ebook is worth reading.i do not think that there is any book in
the market which teaches day trading using demand and supply with
the confirmation of volume analysis.Belive me this Ebook will change
your way of day trading.Everything is logic based,nothing is
hypothetical in this ebook.
• Always remember that nothing is illogical in the market.on every
move in the market or stocks there is a genuine logic.our job is to
read and understand the logic behind the move.as much as we
understand the logic behind the move that much our probability of
being right increase.
• This book is all about making money in day trading using demand
and supply as well as we will use volume for perfect entry.many
people trade using different strategies like Breakout, pattern
Breakout,moving average cross over,and indicator based trading
etc.But according to me these techniques are not as effective as we
want.
• Demand and supply is pure price action and when we add volume
with it.it becomes very effective.we will also learn trade management
with it which will increase our probability of making money from the
market.

CONTENTS:

• TRADING PSYCHOLOGY
• TRADING GUIDANCE
• DEMAND & SUPPLY CONCEPT FOR DAY
TRADING AND

IT’S USES ON 5MIN CHART TO TAKE TRADES.

• TREND ANALYSIS
• STOCK SELECTION FOR DAY TRADING
• HOURLY CHART ANALYSIS TO FIND DEMAND &
SUPPLY
ZONE FOR DAY TRADING.
• VOLUME ANALYSIS FOR PROPER ENTRY
• CALCULATION OF POSITION SIZING
• TRADE MANAGEMENT
• MONEY MANAGEMENT
• USE OF 20 SMA AND 200 SMA FOR INTRADAY
REVERSAL

Let’s
jump into the fight of bull and bear…..
TRADING PSYCHOLOGY
Psychology :- The role of psychology in trading is more than
70%.it might be sound nonsense this time.but the person who is
a genuine trader knows it very well that how psychology play an
important role in the market while trading.

• ALWAYS USE STOP LOSS AND FOLLOW IT STRICTLY:-Many

novice traders do not know the importance of keeping stop loss in
trading so they take it very lightly.and do not keep any stop loss.i can
challenge you,a trader who is not using SL can never be a successful
trader.a trader who knows how to cut loss can only become a
successful trader.so always define your stop loss before entering into
a trade and follow it strictly without any hesitation.always keep in
mind that your job in trading is to protect your capital and it’s market
job to give you profit.so always focus to protect your capitals.

• RISKS ARE THERE AND WILL ALWAYS BE :-Novice traders jump

into the market without getting any proper knowledge which is very
much hazardous for their capital.they trade like gambling.and finally
when they lose all the capital they blame the market.Always keep in
mind there is always a risk in the market. even your 100% accurate
setup can fail in the market so always desfine your down side.if your
risk reward is matching then only take the trade otherwise leave the
trade.you will get many opportunities in the market .

• AVOID FROM REVENGE TRADING:-I See many novice traders do

Revenge trading.they think they will recover their loss same day but it
is not possible sometimes you can recover your losses but it is not a
good habit for your trading career.always keep in mind,Two trade is
enough for a day not more than that.if possible only one trade is
enough in a trading day.

• STOP BLAMING THE MARKET:-Market is always superior and

right.we are wrong so do not blame market if you lose. you would
have taken trade in opposite direction of the market.so find your
mistake and move on.
• LOSS IS THE PART OF GAME:-I see many traders who are new in
the market.if they lose they become demotivated.but brother making
losses is the part of trading.there is not a single trader in the world
who does not lose.so please refresh your brain and accept the truth
of trading then only you can be a logical trader.

• WIN BIG &LOSE SMALL:-One of the biggest secret in trading is.

Winning big and losing small.if you follow only this strictly it’s enough
to make money from trading.when we take a trade we see our p&l
again and again which is not a good habit for beginners.because
when we see our p&l little green,greed comes into our mind and we
book small profit due to greed or fear of losing it back.but when our
p&l look red we wait and do not cut our position at sl point because
we think price will reverse back.but it does not happen mostly. At the
end we get a big lose.So always win big and lose small by using
proper Stop loss and risk reward (R:R).

• TAKE THE TRADE AT PROPER PRICE LEVEL:- see,I have

noticed,new traders those who hesitate to take trade when price
comes to their desired level they fear and do not initiate the trade.this
shows that they have lack of confidence.but I would like to make you
understand that we should always initiate our trade at proper price
level because it will reduce our down side or our stop loss will be
less.so do not hesitate and initiate the trade at proper level.for gaining
confidence one can do paper trading for few days.(Tradingview
provides paper trading facility so go and use it free of cost).

• DECIDE RISK PER DAY:-listen readers always decide risk per

trade.we have habits of over trading which is very bad for the safety
of our capitals.stock market is the place where you can make wealth
but on other side we can lose our complete capital.so always decide
your risk per trade which should not be more than 2% of your capital.
(Let’s assume you have capital of 1lakh so your risk per day should
not be more than 2000Rs which is 2% of your capital).

• DECIDE RISK PER TRADE:-This is same as risk per day but we

will decide our risk according to per trade which will also not exceed
more than 2% of your capital. sometimes we get better trade and that
time we can not leave the Tarde so in this condition we take more
risks but our position size will be low in this situation.
• DISCIPLINE & PATIENCE:-Discipline and patience is the most
expensive talent in trading career.Be careful Losing money in the
market is easier than making money from the market.You can avoid
your mistakes only being disciplined and having patience.day trading
requires more patience and discipline so make it clear in your mind.

• AVOID FOMO (FEAR OF MISSING OUT):-when we see the trading

chart during trading hours we take the trade before the confirmation
of a trade.this is a psychological issue, we think if we do not take
trade immediately,we will miss the opportunity and it happens with
novice traders all the time.so always wait and initiate your trade after
confirmation at proper location. IF YOU CAN NOT AVOID IN
BEGINNING then take only 40% of your total quantity.

• AVOID EMOTIONAL TRADING:-Dear readers, always keep in

mind that trading is never done based on emotion.trading is a skill
where there is no need of emotion because nothing happen
according to our thinking in the market.our job is to follow the market
or stocks and trade like a robot using our skill.

• AVOID HABIT OF WATCHING P&L:-when a novice trader enters

into the field of trading he makes a habit of watching running
P&L(profit and loss) again and again Which changes his emotions
every second.these emotions can be emotion of greed or fear. he
does not pay his attention towards the chart properly due to these
mental emotions.so I would suggest you that once you have taken
the trade,fix your target and stop loss and let the market to whether
hit your target or stop loss.i will tell you trade management ahead
there we will learn how to reduce stop loss and increase target.

• NOTHING WORKS 100%: ALWAYS REMEMBER, Nothing works

100% in this market.there is no existence of 100% successful setup
in the field of trading.if anybody tells you that he has a setup which
works hundred percent.it means he is telling a white lie so never trust
those people.market works on probability and using trade
management we can increase our probability of being right.

• ACCEPT LOSSES: as we already know, losses are the part of

trading but we have to make small losses when we are wrong.and we
have to make big profits when we are right.this one rule can make
you a successful trader if you follow it strictly.
• TRADING RULES:- Trading is 70% psychology, 20% trade and
money management and 10% setups.you will get it’s importance
slowly.

NOTE: NOW WE HAVE LEARNT MOST IMPORTANT

PSYCHOLOGICAL ISSUES WHICH WE FACE WHILE TRADING.SO
LET’S PRACTICE IT IN LIVE MARKET AND IMPOVE YOUR
PSYCHOLOGY OF TRADING.Because psychology is the most
important part of a successful trading but most of the traders do not
take it seriously.finally it becomes one of their reasons of failure.So
we will not make the same mistake

🌷 ……. BEST OF LUCK……. 🌷

SOME TRADING GUIDANCE
• MAINTAIN A TRADING JOURNAL:-The most important thing
through which one can improve the Trading is to maintain a
journal.when I had started my trading I used to write my miskates on
the paper every Trading day.and after sixth months when I read back
my journal I found my stupid mistakes.and in this way I improved my
trading.

• TIPS AND NEWS:-One of the biggest mistakes which people

commit is- they trade based on news and tips.this is pure gambling if
any one is Trading on the basis of tips and news.i will tell them to
leave Trading right now.News are spread with the help of TV’s
channels to attract and trap the novice retailers by the institutions so
that they can buy or sell at their desired price levels.if institutions
have to sell,news will be bullish those days and if Institutions have to
buy,news will be bearish those days on TV’s channels.this happens
because institutions have to buy or sell in a big quantities.so they
need retailers whom they will sell their huge quantities of shares and
from whom they will buy in a huge quantities.so news is their tools to
attract retailers in the market.but retailers do not understand that they
are being traped by the institutions and big players.

• TRADING HOURS:-trading hours have been divided into three

sessions in indian stock market.these are as 9:15 to 11:15,11:15 to
1:15 and 1:15 to 3:15.
Best time to trade is between 9:15 to 11:15.and 1:15 to 3:15 because
this time one can notice momentums in stocks which is very
necessary for a day trader.

BETWEEN 11:15 to 1 o’ clock, market moves sideways mostly so one

should avoid initiating any trade.if one has already initiated the trade
in the morning session then in this case he can ride the trade.

• TRADING AS A BUSINESS:Do not trade in this market as a

gambler. Trading is a serious business so be Disciplined and follow
only rules not Emotions.if you think that you will be rich very soon fri
trading,this is your misconception.Trading needs patience and if you
have to earn from this market you will have to be patient at any cost
otherwise you will lose everything in this market.no setup can be
profitable for you if do not keep patience.
• TRADING AS A CAREER: Many people ask me sir should I leave
my job and become a full time trader.my answer is very simple for
them.No one can give answer of this question except you
yourself.never be over excited in Trading.until you get confidence in
trading,do not even think to quit job.i would honestly tell you,To
become a trader is not a cake walk.it is said trading is simple but not
easy.so in beginning take it as a part time job and work hard to gain
knowledge.Believe me i have taught you enough in this ebook to
become a full time trader.this is not a book only which I have written
to sell.this ebook is far better than paid course and you will accept it
after finishing it. but experiences do not come from books,paid stock
market course.it will come with the time you spend in market.so I will
recommend you to spend time watching the charts, slowly you will
start achieving experiences which will be priceless.no one can buy
experience.it is only earned by hard work and dedication.

Once you get experiences you will not ask any body that should you
quit your job or not.you will answer your question yourself without any
hesitation.so keep patience and learn gradually.
……………………………
DEMAND AND SUPPLY CONCEPT
FOR DAY TRADING
• The first question comes in mind is-what is
demand and supply?

Answer:- I think you all know the answer of this

simple question.but if I answer it in very simple words
then whatever we need or desire to get like food,
clothes,house, Vehicles and a lot of things are
ultimately demands which we are generating and the
person who will fulfill our desires or need is the
supplier,who will generate supply.and if demand is
more and supply is less than the price of the product
will be high.and if supply is more and demand is less
than price of the product will be low.this is the simple
concept of demand and supply.
• SO NOW FIRST OF ALL WE WILL LEARN ABOUT CANDLE
FORMATION AND UNDERSTAND THE MEANING OF THAT
CANDLE:

HERE A GREEN CANDLE REPRESENTS THAT: -the candle opened

and made a low(low of the green candle is represented by lower
shadow and high is represented by upper shadow.)and again made a
High and closed above the open price or level. so a green candle has
formed.

Note:- low and high is represented by wicks or shadow in a

candlesticks.and painted part of the candle is known as the body of a
candlestick(To know more about candlesticks one can watch in
YouTube to clear doubt.

HERE A RED CANDLE REPRESENTS THAT: the candle opened

and made a High(high of red candle is represented by upper shadow
and low is represented by lower shadow)and again made a low and
finally closed below the open price or level.so a red candle has
formed.

NOTE:Always keep in mind that :-(1) Low of a green candle will

always be below the opening price and high will be always
above opening and closin price.and closing also be above the
opening price of that green candle.(as shown in figure above)
(2) HIGH of a red candle will always be above the opening price
of a red candle and low as well as close will always be below the
opening of a red candle.(as shown in figure above)
• WE WILL READ ABOUT DOJI WHICH INDICATES INDICISION IN
THE MARKET:

Doji is a candle whose body is very small or without body as shown

below in the figure.if it has a small body than it can be both in colour
red and green.in this candle opening price and closing price are
nearly very close to each other.

• Doji indicates INDICISION in market.it forms due to strong fight

between buyers and sellers and finally the winner decides the
direction of move.as shown below on chart.
• IN THE ABOVE CHART ONE CAN EASILY UNDERSTAND THAT
Price moved in the direction of

winner.in chart I have marked two doji.in the first doji which is green
in colour (it means buyers and sellers fought but finally sellers won
the fight and price fallen down)

• In the second doji whose colour is red formed at bottom here (

buyers and sellers fought but at the end of fight,buyers won the
fight.so price moved in upward direction.) Here we learnt that doji
shows fight between buyers and sellers.and at the end winners
decide the direction of movement.
• NOTE:-AHEAD I WILL USE DOJI AS BASE CANDLE TO FIND
AND MARK SUPPLY AND DEMAND ZONE.AND WE WILL SAY
THAT CANDLE,”A BASE CANDLE”not a doji.i have given a
photograph of doji below.

•LET’S START THE CONCEPT OF SUPPLY AND

DEMAND……
FIRST OF ALL WE WILL SEE TWO TYPES OF CANDLE (1) Base
candle. (2) Exciting candle

(1) BASE CANDLE:-Generally we will consider a candle as a

base candle whose body size will be less than it’s tails.as shown
in picture below.( Body size should be less than 50% of it’s wick
or tails size).

Note:- This candle shows the fight between buyers and sellers.and
this is the zone where pending orders of big players exist.so when
price come back near this candle.price reverse back.further we will
read in detail.
(2) EXCITING CANDLE:- generally we will consider a candle as a
exciting candle whose body will be bigger than it’s
tails/shadows.as shown below.
This candle shows that huge buying has happened at higher
levels so a green exciting candle formed.

NOTE:-There is a misconception among the novice traders.

They think that a big green candle formed because buying
quantities were more than selling quantities.this is a white lie.
Remember there is always equal buying and selling of
quantities.a huge green candle formed because buyers and
sellers were ready to buy and sell at different levels at a
particular time frame.

(i.e buying and selling are always equal in quantities at different

levels.so buyers and sellers are buying and selling equal
quantities at different price points.)
Note:-Both red and green can be exciting candle, colour does
not matter only size of the candle is important.

NOW,WE HAVE READ above about base and exciting candles.

So to find and Mark the DEMAND AND SUPPLY ZONES we will
use these candles. as shown below.

• THERE ARE TWO PATTERNS OF DEMAND AND SUPPLY,ONE

IS REVERSAL PATTERN(DBR) AND

SECOND IS CONTINUOUS PATTERN(RBR).

• REVERSAL PATTERNS WHICH IS ALSO CALLED (DRAW BASE
RALLY PATTERN (DBR).
• CONTINUOUS PATTERN WHICH IS ALSO CALLED(RALLY
BASE RALLY PATTERN (RBR).
• Note:- Reversal pattern(DBR) is stronger than continuous
pattern (RBR).

1. REVERSAL PATTERN (DBR PATTERN)

MARKING OF DEMAND ZONE
(1) DEMAND AND IT’S ZONE/AREA: as shown below in pictures,I
have marked demand zone. We can observe here in the picture that
market was falling down and a red exciting candle formed (which is
also called leg in candle).and again a base candle formed(colour of
base candle can be both red and green) thereafter a green exciting
candle formed (which is also called leg out candle.see in the picture
carefully I have mentioned every thing.)
Now,we will learn how to find and mark demand zone
Note:-( a) For intraday we will mark demand and supply zone on
the 15min time frame
chart.and we will take entry on 5min or 3min chart.
(B) Many times I mark demand and supply zone on 5min chart
and also takes entry on the same time frame. So one can use it
according to his convenience.

(C) Find a red leg in candle as shown below in picture (D) Find a
base candle
(E) And find a leg out candle

• RULES TO DRAW PROXIMAL LINE AND DISTAL LINE.

(a) Mark a horizontal line on the top of the body of base candle which
is called proximal line as marked below in picture.
(b) And mark a horizontal line at the lowest low of any candle that can
be the low of base candle or leg in or leg out candle.and this line is
called distal line.as shown in both pictures.
• Note:-proximal line will be always at the top of the body of a base
candle, colour of base candle may be both red and green but it does
not change the rule of drawing of a proximal line and distal line.( As
shown below in picture)
• Base candle can be more than one between a leg in and leg out
candle as shown below In second picture.
You can see in the figure given below,there is more than one
base candle so I have marked proximal line at the top of second
base candle because it’s upper body is upper than first base
candle.and distal line will be at the lowest. As marked in pictures
below.

• So now, AREA BETWEEN PROXIMAL LINE AND DISTAL LINE

WILL BE CONSIDERED AS DEMAND ZONE OR AREA.
(A) HOW TO TAKE ENTRY AND WHERE TO KEEP STOP LOSS.

• When price will come back near to the demand zone in future
then we will take entry to go long at demand zone.so
• Entry will be always little bit above the proximal line.as shown
below
• Stop loss will be always little bit below the distal line as shown
below In pictures
Note:-I have given some real charts below,now there on chart we
can notice that how price reverse from deman zone.we will use
volume with demand and supply concept ahead.so keep
patience and read carefully and understand properly.if you face
any problems can contact me through my gmail id given at the
last page of this ebook.
In this picture we can see clearly that market was falling down
and made a new demand zone at 11 am on five minute time
frame.at 12 pm market came near the demand zone and touched
the proximal line( Here I have shifted the proximal line on the top
of the body of green base candle to reduce size of the stop
loss.but according to the rules which I have mentioned above
proximal line will be on the top of the body of red base candle of
10:55,I have marked the same demand zone according to the
rules on the same chart which is given below.) and we entered
into the trade.our stop loss is little below the distal line.and now
we are long so we will book profit of 1:2 or even more by trailing
our stop loss.and we have achieved a big target easily.

Note:- our base candle in the above chart is the red candle of 10:
55 am, but I did not draw our proximal line on the top of the body
of that candle because buyers were strong at green base candle
so a green candle formed.or we can clearly see that origin of the
up move is green candle so I shifted my proximal line on the top
of the body of the green base candle.and distal line will be at the
lowest low of any candles(i.e low of leg in,base or leg out
candle).
• According to the rules which I have taught above ,I have
marked demand zone of the same

above chart is given below but in this our stop loss will be little
big.so in trading we have to use our common sense also to
reduce our risk.

Look above this is the same chart but marking of proximal and
distal line is according to the rules which I have mentioned
above, in this 5 min chart of banknifty,we have a Red exciting leg
in candle, three or four base candle,and green exciting leg out
ccandles.so I marked proximal and distal line and when price
came back in or near demand zone I took a long trade using stop
loss little below the distal line.

We can see more examples below.

Figure (A)
Here we have red leg in candle,a base candle and a leg out
candle.i marked proximal line on the top of the body of base
candle and distal line at the low of leg in candle.and when price
came back near the demand zone we will take entry using stop
loss below the distal line.and we will target of atleast 1:2.

Figure (B)

This is 5 min chart of nifty,here in this chart we have leg in

candle,base candle and leg out
candle,when price came back in or near the demand zone .I took
entry little above or inside the proximal line to reduce the size of
risk and stop loss will be as always little bit below the distal
line.we have to take target atleast 1:2 of risk reward.

MARKING OF DEMAND ZONE

RALLY BASE RALLY PATTERN (RBR)
Now ,we have learnt how to draw demand zone in reversal pattern
(or draw base rally pattern DBR).
NEXT is rally base rally pattern, which is a continuous pattern and
always appears in uptrend. So we will learn to find and mark demand
zone on this pattern. To draw or mark demand zone in this pattern we
need:

(1) TWO GREEN EXCITING CANDLE

(2) One base candle(colour of base candle can be both red and
green). (3) Note:-Base candle can be more than one.

RULES OF MARKING DEMAND ZONE IN RBR PATTERN

(A)DRAW A PROXIMAL LINE ON THE TOP OF THE BODY OF
BASE

CANDLE AS shows below in the picture.

(B) DRAW A DISTAL LINE AT THE LOW OF BASE CANDLE OR
LEG OUT
CANDLE AS shown below in the given picture.
(C) STOP LOSS WILL BE AT LOW OF BASE CANDLE OR LEG
OUT CANDLE
LITTLE BELOW THE DISTAL LINE.if low of leg out candle is
lower than
the low of base candle,we will keep our stop loss at the low of
leg
out candle as shown below in the picture.
(D)Note:- stop loss will never be at or below the low of leg in
candle.

Now,see in the picture given below.we have two green exciting

candle and one base candle.and in last picture we have two base
candle.

• ENTRY RULES
-When price will come back near or in the demand zone.we can take
entry little above the proximal line or we can also take entry inside the
rany of demand zone to reduce the size of stop loss.

-stop loss will be little below the distal line.

See the picture carefully given below and learn how to mark
demand zone as I have mentioned the rules of marking demand zone
of rbr pattern above.
Now,we will see rally base rally pattern on real intraday chart (i.e
5min chart) below.

In this chart we can see that we have base candle and two or more
green exciting candle.so when price came back next day at this
demand zone.we will go long keeping the Stop loss below the distal
line.our target will be always 1:2.
• Note: this RBR continuous pattern is not as strong as DBR reversal
pattern and we do not get this pattern much on the intraday chart.
• but both the DBR and RBR patterns are very strong on daily ,
weekly, monthly, hourly or even yearly time frames for long term
trading or
investing.this is big topic and concept which i will discuss in future
writing a new ebook on swing trading.

Let’s see some more intraday charts of RBR pattern

In the above chart,we marked a demand zone of RBR pattern on 17

March and we got the entry on 22 march.our sl was little below the
distal line and entry was little above or within the range of demand
zone.we can take entry according to our convenience.

Note:-if you have still hesitation in taking entry,we can use here a
Indicator(i.e STOCHASTIC RSI).THIS INDICATOR PROVIDES
MORE CONFIRMATION TO TAKE ENTRY.i use this Indicator for the
confirmation entry only.so use it according to your own comfort.

Let’s se how stochastic RSI provides more confirmation in the 5min

chart given below.
I have marked the arrow vertically on the chart.which shows that
stochastic RSI is oversold and our price is also inside the demand
zone so this is approximately confirm that price should go up.we can
take entry keeping the Stop loss little below the distal line.we keep
stop loss because market is uncertain and risk is always involved in
trading.so we keep stop loss.

Note :- If any one feel that he should make some changes in this
setup,he is free to make some changes.

NOTE:-IN RALLY BASE RALLY PATTERN(RBR) WE DO NOT GET

OPPORTUNITY DAILY.SO IT PROVIDES OPPORTUNITIES NEXT
DAY OR IT CAN TAKE MORE TIME.AS SHOWN ABOVE IN THE
CHARTS. And we can use stochastic RSI in reversal
pattern(DBR:-DRAW BASE RALLY PATTERN) also to take entry
with more confirmation.but we will give priority to price action
not any Indicator.
SUPPLY ZONE
RBD PATTERN(RALLY BASE DRAW PATTERN)
-----------------------------------------------------------------------
---------

MARKING OF SUPPLY ZONE

REVERSAL PATTERN
-----------------------------------------------------------------------
------------
• There are two ways to find and mark supply zone on a chart
same as we have marked demand zone above.
• (1) RALLY BASE DRAW PATTERN(RBD PATTERN):- IT IS A
REVERSAL PATTERN.
• (2) DRAW BASE DRAW PATTERN( DBD PATTERN):-IT IS A
CONTINUOUS PATTERN.

Let’s begin,
(1) RALLY BASE RALLY PATTERN:- THIS IS A REVERSAL
PATTERN AND WE USE IT TO TAKE SHORT TRADE.JUST SEE
BELOW IN THE GIVEN PICTURE.
HOW TO MARK SUPPLY ZONE AND TAKE ENTRY AND EXIT ON
FIVE MINUTE CHART FOR DAY TRADING.
--------------------------------------------------------------------------------------------
------------------------ ---------------

Rules (a) Draw a proximal line at low of the body of the base
candle and draw a distal line at high of the candle whose high is
at the highest level.as shown below in the figure.i have marked
at the highest point of leg in candle in second picture because
there high of leg in candle is higher than the high of base or leg
out .but in first picture high of the base candle is higher than the
high of leg in and leg out candle.(colour of base candle may be
both green and red.it does not make any difference.and base
candle can also be more than one.)
• First mark Supply zone and. When price comes near the supply
zone.
• Take entry little below the proximal line and
• Keep stop loss little above the distal line as shy in the picture
given

below.

Note:- area between proximal line and distal line is considered

as a supply zone.

Note:-The candle which has been shown by (RALLY) is leg in

candle in the above picture
And the candle which has been shown by (DRAW is a leg out
candle.

Note:- IN SIMPLE WORDS, marking and entry,exit of Supply zone

is just apposite of marking and entry, exit of demand zone as I
have mentioned above in the chapter of demand zone.
LET’S SEE SOME REAL EXAMPLE OF SUPPLY ZONE ON REAL
5MIN CHART BELOW.

We can see in the above real chart.i have marked proximal line
and distal line.so now area between proximal and distal is a area
of supply.so when price will come again near or in the supply
zone.i will go short.

Entry has been taken little below the proximal line and kept the
stop loss little above the distal line as shown in above chart.our
target will be atleast 1:2 or risk rewards.

Now,we will use a Indicator known as STOCHASTIC RSI.It will

provide confirmation to take entry.if our stock price is near
Supply zone and stochastic RSI is showing oversold.it is
confirmed that now market will come down but it can fail also so
we will definitely keep stop loss little above the distal line. I have
the same chart with stochastic RSI.so see how stochastic RSI
provides more confirmation in the given chart ne.
I have marked with a vertical arrow on the above chart.we can
easily see that our price is in the range of supply zone and
stochastic RSI is also showing oversold.so it is 95% confirmed
that price is going to come down.but nothing is 100% accurate
in stock market or stock trading so we will keep stop loss at any
cost without any excuse.

Note:- settings of stochastic RSI will be

oversold 80 and overbought 20.

Note:- here we have to notice that some times we will not get
any base candle or leg in candle While marking supply zone.but
it’s very clear that price has fallen down sharply from a level
then we can consider that level as a supply zone as shown
below in the chart.
In this chart of HCLTECH.we can clearly see that price has fallen
down sharply from the first 5min candle of the day.so here we do
not have any leg in and base candle.but yet this is a supply zone
because sellers have sold heavily at that level.

So I have marked with two lines one is proximal and second is

distal line so when price came back near this level we will short
keeping the Stop loss above the distal line.

Note:- We can also Mark the proximal line at the low of the body
of first 5min candle and distal line at the high of the first 5min
candle.but I did not do this because our stop loss will be very
big.so sometimes we need to mark according to the situation.

Note:- this rule is also applicable while marking demand zone as

shown below in the chart.
Here in this chart we do not have any base candle but still I have
marked demand zone.here concept is very simple.if market has
to go up it will definitely take support at demand zone which I
have marked.

Note:- price action is a very deep topic.everything is available on

the chart and as much as we are able to read it accurately that
much our accuracy will Increase.further I will talk about volume
which will increase our accuracy very much.

Note: -somestime we get a base candle in the form of a doji who

does not have any body.in this situation we mark distal line at
high of that doji(base candle)as I have mentioned below in the
chart.
In this chart we can see that we have a base
candle which does not have body.so in this
scenario we will draw proximal line at high of the
base candle(i.e doji candle).as I have drawn above
in the chart of nifty future of 22 March.

Note:-in running market,new demand zones and

Supply zones forms continuously so we have to
take entry on those demand and supply zone who
has major strength.and strength of the zones will
be decided by using the volume. I will discuss it
further in the chapter of volume analysis.

DRAW BASE DRAW PATTERN (DBD PATTERN)

SUPPLY ZONE
--------------------------------------------------------------------
• This is a continuous pattern and it always forms in the down
trending market.
• This pattern is used to short in the market as I have mentioned
below.see the picture given below.
• Base candle can also be more than one in this pattern.as you
can see below in the given picture.

• How to draw supply zone on draw base draw(DBD) pattern?

(A) draw a proximal line at the low of the body of the base candle as
shown above in the picture.
(B) Draw a distal line at the high of the base or leg out candle.if high
of the leg out candle is higher than the high of the base candle then
we will draw distal line at high of leg out candle.

Note:- distal line will never be at the high of leg in candle.leg in

candle always comes just before the base candle and leg out
candle always comes just after the base candle.as shown below
in the picture.
Let’s see some real charts of DRAW BASE DRAW
PATTERN (DBD).

We can see in this DBD PATTERN chart that we

have leg in,base and leg out candle so we marked
a supply zone.and when price came back to that
supply zone.we sold near the proximal line or one
can sell inside the zone to reduce the size of stop
loss.and kept the stop loss little above the distal
line.as you can see in the above chart of
HCLTECH.

FOR MORE CONFIRMATION WE CAN USE

STOCHASTIC RSI AS YOU CAN SEE IN THE
BELOW CHART.

In this above chart I have used a Indicator stochastic RSI which

is showing oversold when our price is in the supply zone.later
we will add volume with it for more confirmation.so now we can
easily sell at this supply zone and our target will be atleast 1:2 of
risk reward.

In this below chart I have marked proximal line

and distal line.so when price came back near the
proximal line I took a short trade keeping the stop
loss little above the distal line.for more
confirmation one can use stochastic RSI Target
will be atleast 1:2 of risk reward which I have
achha easily.

TREND ANALYSIS FOR DAY TRADING

-----------------------------------------------------------------------
----

• As we all know Trend is your best friend in

trading.and this is 100% true if a trader knows the
direction of Trend of a stock or iindices.then it is
considered that he has achieved 50% knowledge of
trading.
• On youtube or some where else we keep watching
videos on trading strategies, setups, volume analysis,
moving average cross over chart pattern (i.e:- flag
pattern,head and shoulder, double top, double bottom
trendlines and many more) But believe me these
things are not going to make you a consistent
profitable trader. So stop watching these YouTube
videos as soon as you can.For basics one can watch
these videos.but the only way to become a successful
consistent profitable trader is to know how to read
price action.and the demand Supply concept which I
have mentioned in the above chapter is purely based
on price action.and these patterns which I mentioned
above (flag pattern, trendlines,etc) are forming due to
the demand Supply only.
• Price action is a concept in which we read the
actions of price on the chart to predict the direction of
next upcoming move on the chart.
• I will honestly tell you that there is no such a perfect
way to find the direction of a Trend of a stock and a
intraday trader who trade on the basis of demand
Supply concept does not need trend analysis
much.but to read we will learn trend analysis.
• we traders assume that if market or a stock is
moving above the 200 simple moving average.then it
is considered that stock is in uptrend.and when stock
is moving Below the 200 simple moving average then
it is considered that stock is in downtrend.as shown
below in the chart.
This is daily chart of titan ,In this chart,red line indicates 200
SMA simple moving average.and the price is above 200 sma so
this chart is showing that titan is in uptrend.

So, whenever price will be above the 200sma we will consider

that stock is in uptrend.and uptrend simply means that buyers
are dominating the stock.so in a uptrending stock a trader
should focus more on buying rather than selling. When we take
trade in the direction of the trend,then our probability of being
right increase very much because we are taking trade in the
direction of Trend.

Now, we have same daily chart of titan which is showing

downtrend.in this chart price is moving below the 200 SAM.so in
downtrend.a trader should prefer selling rather than buying.
A trade which is taken in the direction of Trend has more
probability of being a successful trade.

• Above I have mentioned about trend on daily time

frame but in intraday trading we will have to find the
trend on 5min or 15min chart.i prefer 5min so one can
use different time frames according to his own
comfort.
• Below I have given a 5min chart of banknifty.in this
chart we can see that banknifty opened just above the
200SMA, Which indicates that price has opened in
uptrend and in uptrend we have to take buy trades
only and when price will go below the 200 SMA we
will think to sell only.
• Note:- In day trading trend can change quickly.price
can go up and down of 200 sma.so due to this issue i
personally do not prefer day trading on the basis of
Trend of 200 sma .but I mentioned it because many
traders like it.if you are not a trader who take trades
on the basis of demand and supply than you can use
this concept of trend analysis.
• but for swing trading this is a very effective way to
find the direction of the trend.as I have shown above
on daily time frame charts.so whenever I want to take
a swing trade I definitely use 200 SMA for trend
analysis.

In this 5min chart of banknifty I have mentioned

about the downtrend.here we can see that
banknifty opened below the 200 sma so banknifty
is in downtrend so we will prefer to sell only.
Now we will use trend lines to find trend.
TREND IDENTIFICATION WITH THE HELP OF
TRENDLINES AND STOCHASTIC RSI.

NOTE: I WILL SHARE TWO SCANNER IN THIS

CHAPTER WHICH I HAVE CREATED MYSELF ON
THE WEBSITE OF CHARTINK.THIS SCANNER
WILL PROVIDE YOU SOME STOCK DAILY AT
9:15.1st scanner will provide you those stocks in
which you have to find the apportunity to sell
only.And

2ND scanner will provide you those stocks in

which you have to sell buy only.but accuracy of
2nd scanner is little lower than the 1st scanner.i will
explain these scanner at the end of this Trend
analysis chapter.

So first learn some trend analysis methods but

trading on the basis demand Supply concept.i do
not need any trend analysis but for education
purpose we will learn it.

Note: -THE SCANNER WHICH I WILL PROVIDE

BELOW IS ENOUGH FOR A TRADER.THIS
SCANNER SCANS THOSE STOCKS WHOSE
PROBABILITY OF BEING RIGHT IS BETWEEN 85
TO 90 PERCENT.

-----------------------------------------------------------------------
-----------------------

Now, I have discussed above the ways to find trends

with the help of 200 moving average.but In this we will
draw trendline on daily time frame to check the
direction of Trend and then we will use demand and
supply concept to take trades in intraday trading.

HOW TO DRAW TREND LINE ON CHART?

. DRAW A LINE FROM 1ST POINT TO 2ND POINT

AND TRAIL IT AHEAD TOUCHING MORE POINTS
AS SHOWN BELOW ON CHART.BUT WE NEED
ATLEAST TWO POINTS TO DRAW A TREND LINE(
to learn how to draw trendline more effectively
one can watch youtube videos uploaded on the
topic of trend lines)

As we can see below in this daily chart.i have drawn a

black line starting from first point and touched second
point but ahead I got more points so I proceeded my
line touching the third point and 4th point.so when
price will break the trend line and sustain above the
trend line it is confirmed that trend has changed,we
will also use stochastic RSI with trend line to confirm
the change in trend as shown below that stochastic is
also moving up.so in this chart trend changed into up
Trend from down trend.so in uptrend we prefer buying
rather than selling.
Let’s see one more example

In this chart we can see that I drew a line from 1st

point to till 3rd point and when price broke the
trend line and sustained above the trend line then
it is considered that uptrend has started.

we will draw trendline to confirm a

downtrend.Let’s see how A uptrend ends and
downtrend starts.

In this daily chart of HDFC,I HAVE DREW A LINE FROM 1ST

POINT TO 4TH POINT.AND WHEN PRICE BROKE AND
SUSTAINED BELOW THE TRENDLINE.IT CONFIRMED THAT
DOWNTREND HAS STARTED AND UPTREND ENDED.so in
downtrend a trader should prefer selling rather than buying.
SCANNER FOR STOCK SELECTION
FOR DAY TRADING ---------------------------
--------------------------
Now, let’s see how scanner provides us stocks for
day trading.believe me this scanner is going to
help us a lot.i am telling you this on the basis of
my own experience.

•
How to use this scanner?

(A) First search ‘chartink.com’ in Google Chrome or

any browser
(B) Click on the link of website and the interface of
chartink will open .
(C) We will choose the segment (nifty 200 or nifty
500.any one in both)
(D) Then click on create scan.and create the scan
same as I have created in the given picture of
scanner below.(if you are facing problems than watch
videos in youtube and learn how to create SCANNER
in chartink.com).

(E) After finishing the creation of scanner.click on

RUN SCAN.after this you will get scanned stock.so
one can select any stock for that day.
(F) Click on SAVE SCAN to save the scanner for the
use of every Trading day.
(1)THIS SCANNER WILL PROVIDE ONLY THOSE
STOCKS IN WHICH WE HAVE TO SHORT ONLY.
-------------------------------------------------------------

In the top of dashboard you can see option of

(CREATE SCAN) CLICK ON THAT AND CREATE
THE SCAN CLICKING ON (+) SIGN.SAME AS I
HAVE CREATED.

SCAN IS WRITTEN IN THIS WAY SEE BELOW.

(Latest open Greater than latest upper Bollinger
band Latest open Greater than 1 day ago High)

After writing this scan.click on run scan which is

given below the scan.you can see below in
pictures.
To save the scan for daily use,you can click on
save scan which is given beside the run scan in
green colors.

Now ,this day we have got 3 stocks which are

scanned by the scanner.in these stocks we have
to choose any of them and can take a short trade
using our demand and supply concept on chart.
(2) THIS SCANNER WILL PROVIDE ONLY THOSE
STOCKS IN WHICH WE CAN BUY ONLY.
---------------------------------------------------------------------

The above scanner scans those stocks in which

we can sell.but in this scanner we will get those
stocks in which we can buy.see below in the
picture.

In this scanner I have written the scan description in

this way,see below how we will write sacn description.
( Latest open Less than Lower bollinger band
Latest Open Less than equal to 1 day ago Close ).
In this I have used (nifty 500) segment as you can
see.this shows that scanner will scan those
stocks which comes under nifty 500.
• See below,this day I got only stock to buy which
is PCBL LTD. So this day we have to see to buy
only at demand zone in PCBL LTD.

• But I will advise that always trade in those

stocks whose current market price must be more
than 400rs.because low price stocks can be easily
manipulated.so choose only those stocks who
has high volume and high price for your trading.
If any one is facing problems and not understanding clearly.he
can contact me through my gmail id
HOURLY CHART ANALYSIS T
O FIND DEMAND AND SUPPLY ZONE FOR DAY
TRADING.
--------------------------------------------------------------------

• In the above chapters we have completed

demand and supply concepts on 5min chart to
take trade for day trading.in this chapter we will
move one step ahead to find demand and supply
zone on higher time frame.
• Note: Higher time frame’s demand and supply
zones are more powerful than Lower time frame’s
demand and supply zones. For example:- demand
and supply zones marked on hourly charts are
stronger than the demand and supply zones
marked on 5min charts. Now in this we have same
two patterns(DBR & RBR).

(1) REVERSAL PATTERN (DBR:-Draw base rally pattern)

( 1 ) METHODS TO MARK DEMAND ZONE ON
HOURLY CHART.
• Open hourly candlsticks chart of a stock (one
can use

Tradingview.com to watch charts).

• Draw proximal line at the top of the body of base
candle.and
draw distal line at the low of the base candle on
hourly
chart.and if low of leg In or leg out candle is lower
than the low
of base candle then in this scenario we will draw
distal line at
low of leg in or leg out candle.(i.e:-In simple words
we can say
that draw distal line at lowest of the low).as you can
see how I
have drawn below on the hourly chart of
banknifty.
• We will mark demand zone on hourly chart but
we will take
entry on 5min time frame.so after completing the
marking of the demand zone on hourly
chart.move to 5min chart and again mark demand
zone inside the demand zone of hourly chart
which you have marked few time ago.and when
price will come again inside the hourly time frame
and reaches near the proximal line of demand
zone of 5min time frame then we will take a long
trade little above the proximal line of 5min
demand zone keeping the Stop loss little below
the distal line.we can use distal line of hourly dz
as well as 5min dz to keep stop loss according to
our risk appetite.as shown below in the hourly
chart,see the charts very carefully and try to
understand properly.
On the above hourly chart of Dr reddy on 4th march I
have marked demand zone according to the rules of
marking of a demand zone as we have discussed in
the chapter of demand Supply concept.(we can recall
that we
need three things to mark a demand zone ( (1) one
leg in candle,(2) atleast one base candle,and (3)
atleast one leg out candle.)

We have a hourly proximal line and a hourly distal line

whose colour is given red as you can see above in
the hourly chart of the stock (Dr reddy).
_Now we will shift to the chart of 5min time frame
of Dr reddy on the same day(i.e 4th March)

And again we will mark demand zone on the chart

of 5min time frame which will coinside with the
demand zone of hourly time frame.(i.e the demand
zone which you will mark on 5min timeframe should
be inside the demand zone of hourly time frame
which I have marked above in the chart of dr Reddy).

as you can see below on the 5min chart that,how I

have marked demand zone on 5min time frame
which is inside the demand zone of hourly time
frame.
See above on 5min chart: -I have marked a black
proximal line which is the proximal line of 5min chart
which is completely inside the proximal line( red line)
and distal line (i.e demand zone) of hourly time
frame.And distal line( red line) has not been marked
because distal line on hourly time frame and 5min
time frame is same.so here distal line be same.
Now,we will use our same entry rules.buy just little
above the proximal line of 5min time frame and keep
the stop loss little below the distal line of 5min time
frame.sometimes distal line will be same on both the
time frame so our stop loss will be just below the
distal line of both the time frames as you can see
above in the chart of dr reddy laboratories. Distal line
is same on both the time frame so I have kept stop
loss just below the distal line.
So next day on 7th March when price came near
the proximal line of 5min timeframe chart I took a
long trade little above the proximal line keeping
the Stop loss just below the distal line.
NOTE:-TRADING ON THE BASIS OF HOURLY DEMAND ZONE
AND SUPPLY ZONE HAVE HIGH PROBABILITY OF
ACCURACY.WHEN WE TAKE INTRADAY TRADE ON 5MIN
TIMEFRAME WE GET THE SUPPORT OF HOURLY TIME FRAME
SO OUR PROBABILITIES OF BEING RIGHT INCREASE
TREMENDOUSLY.
Let’s see some more examples below.
This is hourly chart of banknifty

Here,in the hourly chart of banknifty we can easily

see that on 15th of March we got a demand zone
where we have( a base candle,a leg in and a leg
out candle).so I marked two lines black lines one
is proximal line and another is distal line. And on
22th of March when price came again in the
demand zone or near the proximal line on 22th of
March.i could take a long intraday trade on 22th
March on the 5min time frame.

• So move to 5min time frame to take trade.

• See below In the 5min chart how I could take a
long intraday trade on 22th March in banknifty.
Here,I did not mark proximal line and distal line
inside the demand zone of hourly time frame
because price came near the proximal line of
hourly time frame and move up. So on 22th
March, our entry could be little above the hourly
proximal line and stop loss will be little below the
hourly distal line or one can keep stop loss at the
low of first 5min candle of trading day(i.e 22th
March)

• Now,we can see how on 22th March banknifty

performed.
• We can see how stock has performed.price just
reversed from hourly demand zone and went
up.just look the zoomed same 5min chart below
and see where the second entry was available in
the Live market.

In this zoomed 5min chart of banknifty .we can

clearly see that we could take 1st entry in the 1st
5min candle just above the proximal line (pl-1) of
hourly time frame keeping the Stop loss just
below the distal line (dl-1) of hourly time
frame.and 2nd entry was also possible just little
above the proximal line(pl-2) of 5min chart
keeping the Stop loss little below the second red
distal line (Dl-2) of second demand zone which
formed during the Live market on 5min time
frame.so one can take entry according to his
comfort.target must be atleast 1:2 of risk reward.

Let’s see some more examples.

You can see here, This is the hourly chart of

Maruti Suzuki,in this I have a Red leg in candle,
four base candle and two green leg out candle.i
have marked two red lines one is hourly proximal
line and second is hourly distal line.Now we will
shift to 5min chart.

Now,we have 5 min chart of Maruti Suzuki of the

same day,so our next job is to mark Proximal line
and distal line inside the hourly proximal line and
hourly distal line, which you can see below on
5min chart that I have marked 5min Proximal line
and distal line with two black lines.so now when
price came near or inside the 5min demand zone
or hourly demand zone, we can take entry as I
have shown below in the chart keeping stop loss
little below the distal line.

Our target will be atleast 1:2 of risk reward.

To get more confirmation we can use stochastic

RSI to take entry as I have shown below with a
black arrow which shows that when we were
taking entry that time stochastic RSI was also
showing oversold in the same chart of Maruti
Suzuki.
HOURLY DEMAND ZONE ANALYSIS
----------------------------------------------------(2)
CONTINUOUS PATTERN (RBR:-rally base rally pattern
)
As we know we have already read about the rally
base rally pattern on 5min timeframe chart in 3rd
chapter of this ebook.
Now we will draw Rally Base Rally (RBR) pattern
on hourly chart to take a high probability intraday
trade.
WHAT DO WE NEED TO MARK A RBR PATTERN
ON ANY TIME FRAMES?
(1) Atleast one RED LEG IN CANDLE,Atleast one
BASE CANDLE (any colour) and atleast one
GREEN LEG OUT CANDLE.
HOW TO MARK DEMAND ZONE IN RALLY BASE
RALLY PATTERN? (1) DRAW A PROXIMAL LINE
ON THE TOP OF THE BODY OF THE
BASE CANDLE
(2)DRAW A DISTAL LINE AT LOW OF THE BASE
CANDLE AND IF LOW
OF LEG OUT CANDLE IS LOWER THAN THE LOW
OF BASE CANDLE
THEN WE WILL MARK AT THE LOW OF THE LEG
OUT CANDLE.

Note:- The area between proximal line and distal

line is called the area of demand or demand
zone.and when we mark a zone to sell then that
time area between proximal line and distal line is
called area of Supply or supply zone.

Let’s see the example of RBR pattern in M&M

This is the hourly chart of of mahindra &

mahindra of 8th March
We can see in the above hourly chart of M&M that
I have marked two red lines one is called Proximal
line and second is called distal line.these so our
RBR PATTERN IS COMPLETE ON HOURLY
CHART NOW we will shift to 5min chart and our
next job will be to mark a demand zone inside the
demand zone of hourly time frame.as you can see
the same chart of m&m below on 5min timeframe.
I have marked a black proximal line on 5min time frame.here we
can see that Proximal line and distal line of both the time frame
(i.e hourly and 5min) are almost same so I have not marked any
distal line on 5min chart.

I have taken entry little above the proximal line on 11th of March
and stop loss will be little below the distal line.target will be
atleast 1:2 of risk reward.

• To get more confirmation to take entry we can

use stochastic RSI as we can see below in the
chart that at the time of entry stochastic RSI was
also showing oversold.so it confirmed that our
entry is going to be at the best level.so we can
take a long trade with more confirmation.
• NOTE: If any body does not know about stochastic
RSI Indicator I will recommend them to visit videos
which are uploaded on youtube on the basics of
stochastic RSI. But for berief information I will
mention that:- area above upper band (i.e 80 ) is
considered as overbought zone and area below lower
band (i.e 20 ) is considered as the oversold zone.

Let’s see one more example of RBR pattern.

This is hourly chart of ACC LTD,you can see I have

marked Proximal line and distal line with two red lines
on the hourly chart.now we have a demand zone on
hourly chart so shift to 5min chart and draw a new
demand zone inside the proximal line and distal line
of hourly demand zone.
Now, we have moved on 5min chart as you can see
below.here I marked a black line which is the
Proximal line of demand zone of 5min chart.and also
inside the demand zone of hourly time frame.so I
have taken entry little above the proximal line of 5min
demand zone keeping the Stop loss little below the
distal line of hourly distal line because distal line on
hourly chart and 5min chart is same.
• I have zoomed the same chart on 5min
timeframe too see the entry and exit levels
clearly.here I have used stochastic RSI also to get
more confirmation while taking entry as you can
see below on the chart of Acc Ltd.
HOURLY SUPPLY ZONE ANALYSIS
---------------------------------------------------

• We have completed concept of both the pattern(i.e

DBR AND RBR) ON HOURLY TIME FRAME.NOW
WE WILL LEARN THE SAME CONCEPT TO MARK
SUPPLY ZONE ON HOURLY TIME FRAME.

• ( 1 ) REVERSAL PATTERN:- RALLY BASE DRAW

PATTERN (RBD).
• What are the requirements to mark a Supply
zone on any time frame?

-At least one green leg in candle, atleast one base

candle (colour of base candle can be both red,green)
and atleast one red leg out candle.
•
HOW TO MARK SUPPLY ZONE ON HOURLY
CHART?
(1) Draw a proximal line at the low of the body of
the base candle.

(2) Draw a distal line at the high of the base

candle and if the high of leg out candle is higher
than the high of base candle then we will mark
distal line at the high of leg out candle.

Let’s see an example:-

This is hourly chart of INDIAMART LTD.in this I

have marked two red lines one is hourly proximal
line which has been drawn at the low of the body
of the base candle and second is hourly distal line
which has been drawn at the high of base
candle.as you can see in the below chart. Now,we
will shift to 5min chart to take a short trade.
Now, we have moved to 5min chart of INDIAMART as
you can see below and here we will again draw
supply zone inside the hourly Supply zone which we
have just marked on above hourly chart of
INDIAMART
Here, I have marked supply zone on 5min chart with two black
line one is proximal line which has been drawn out side of the
hourly proximal line because the low of the body of the base
candle of 5min chart is little below the proximal line of hourly
chart.and second is distal line drawn at high of the base candle.

Entry will be just below the proximal line of 5min chart and we
can keep stop loss little above the distal line of 5min chart which
has been drawn with a black line or little above the hourly distal
line which has been drawn with a red line in the chart below.
Let’s take one more example:
This is the hourly chart of ASIAN PAINTS LTD.

I have marked Supply zone with two red lines on

the chart of 7th March of Asian paints Ltd in which
one line is the proximal line which has been
drawn at the low of the body of the base candle
and second is distal line which has been drawn at
the high of the base candle as you can see below
on the chart.
Now,we will move to 5min chart to mark a new
5min Supply zone inside the hourly Supply zone
but I have given many examples on 5min chart so
I am putting here a 15min chart to take entry
because many traders prefer 15min chart to take
intraday trades.as you can see below in the 15min
chart of Asian paintsLtd.

Here on 15min chart I have marked proximal line

which has been shown with a black line inside the
hourly Supply zone and distal line will be same
because high of the hourly base candle and High
of 15min timeframe base candle is same.

Here,Entry will be on 12th of March little below the

15min Proximal line keeping the stop loss little
above the distal line.as I have mentioned in the
below chart.
To get more confirmation to take proper entry one
can use stochastic RSI as I have mentioned below
in the chart.
Here,in the chart we can see that at the time of
entry stochastic RSI was also in overbought zone
which I have shown in the chart with a black
arrow.it means that this was going to be a high
probability intraday trade.

• ( 2 ) CONTINUOUS PATTERN:-DRAW BASE

DRAW PATTERN ( DBD PATTERN ).
• DBD PATTERN IS A PATTERN WHICH FORMS IN
A

DOWN TRENDING MARKET OR STOCK.

• We need three types of candles to draw a DBD
PATTERN.
(1) Atleast A red leg in candle (2) Atleast a base
candle (3) atleast a red leg out candle. Note:-BASE
CANDLE CAN BE OF ANY COLOUR, COLOUR
DOES NOT MATTER OF BASE CANDLE BUT LEG
IN AND LEG OUT CANDLE MUST BE RED IN
COLOUR IN DBD PATTERN.

• How to mark Supply zone in DBD PATTERN? (2)

mark a proximal line at low of the body of the base
candle and mark a distal line at the high of the base
candle.and if the high of the leg out candle is higher
than the high of the base candle then our distal line
will be marked at the high of leg out candle.
Let’s see some examples.
This is the hourly chart of Banknifty as you can see I
have marked a proximal line at low of the base candle
and distal line has been marked at the high of base
candle.

Now we will shift to 5min chart and there I will draw a

Supply zone inside the range of hourly Supply zone
on 5 min timeframe chart.as you can see below in the
5min chart of banknifty.
Here, you can see that on 5 min timeframe chart I
have marked a new Proximal line with a black line
inside the hourly Supply zone.but I have not marked a
distal line on 5min chart because the high of the base
candle of hourly time frame and the high of the base
candle of 5min timeframe is same so in this case our
distal line also be same which has been marked with
a red line on the chart.

Entry will be little below the black proximal line which

is the proximal line drawn on 5min chart. so always
take entry just below the proximal line of 5min time
frame.and keep the stop loss little above the distal
line.as you can see clearly on the above 5min chart.
If you want to get more confirmation While taking
a trade,then see the same zoomed chart of
banknifty below,here you can use stochastic RSI
IIndicator.it will provide extra confirmation
showing that the stock is in oversold zone so a
selling pressure can come in banknifty.

As you can see the stochastic RSI is also

showing
oversold at the same time when the price is inside
the Supply zone.so it is confirmed that we can
take a short trade in this scenario.
Let’s see one more example of DBD PATTERN.
Here,this is the hourly chart of HERO MOTOCORP
LTD of 29 March.

You can see that I have marked two red lines on

hourly time frame,first red line is the hourly proximal
line and second red line is the hourly distal line.

so our next job is to visit the 5min chart and mark a

Supply zone inside the hourly Supply zone on 5min
time frame. As you can see below in the chart of
HERO MOTOCORP LTD.
You can see in the chart I have marked two black line
on 5min chart first black line is Proximal line and
second is distal line.here I got the Trading opportunity
in hero motorcorp Ltd on 8th including 11th of april. so
our entry will be little below the black proximal line of
5min chart and stop loss can be kept at little above
the black distal line or for more safety one can keep
little above the red hourly distal line.as you can see
on the above chart I have mentioned two stop loss
levels.

To see it clearly see the zoomed chart of hero

motorcorp Ltd below
VOLUME ANALYSIS --------------------------
---------------------------
Volume analysis for proper entry in intraday

Dear Readers, Many of you would have heard and

watched videos on volume analysis and would have
realised that volume analysis is very important for a
price action trader.and according to my experience
price action trading is the best way to trade in any
market.so to become a successful price action trader
we need the proper knowledge to read the price
movement including volume analysis.

Volume analysis is a vast topic and it can not be

completed in nutshell. But in this ebook here I will
discuss about only one concept of volume analysis
which is enough to trade in market and this single
concept of volume reading is enough to increase the
accuracy of your trading.

So let’s begin,
(1) VOLUME ANALYSIS IN DEMAND ZONES TO
TAKE LONG INTRADAY TRADES.
WHAT DO WE NEED TO TAKE A TRADE WITH
THE CONFIRMATION OF VOLUME?
• The first thing which we need is 5min chart
• Plot volume bars on 5min chart
• Find demand zone/area in 5min chart
• Find a red sellers trapping candle on 5min

chart and when price will come again in the

demand zone then we will take a long trade on the
high breaking of 5min sellers trapping candle.as
you can see below in the chart.

• So in volume based trading, entry will always be

at the high break of sellers trapping candle.

Note:- what is sellers trapping candle?

Ans:- A 5min red candle whose volume should be

higher than the volume of previous 5min candle is
considered as a sellers trapping candle. see
below on chart.(note:-previous candle of sellers
trapping candle can be both in color i.e red or
green.)
• As we can see above on this 5min chart of nifty

future.i have plotted 5min candlsticks chart,

volume bars and I have marked demand zone with
two black lines as you already know the first
black line will be called Proximal line and second
black line will be called distal line.

• So when price came again near or in the demand

zone.Now you can see I have shown red sellers
trapping candle with a arrow line on chart. I have
marked sellers trapping candle whose volume is
higher than the volume of previous 5min
candle.so now we can take entry of a long trade in
two ways.

(A) First type of entry will be for

aggressive traders and can be taken When price
came near the demand zone or proximal line of
demand zone.same as we were taking entries in
the chapter of demand and Supply concept
above.stop loss will be always little below the
distal line.

(B) Second entry will be for risk adverse traders

and can be taken at the breaking of high of red
sellers trapping candle as you can see above on
the chart of nifty future.stop loss will be little
below the distal line.

NOW WE WILL MAKE OUR TRADES A THREE

STAR TRADES.SEE HOW?

TO MAKE A THREE STAR TRADE WE WILL

COMBINE all these three components together.as
I have shown below on the same chart of nifty.

(1) Demand zone

(2) Trapping candle
(3) Stochastic RSI
Note: when these all three components will show
bullish sign at the time of entry in a trade then
that trade will be cally a three star trade.and it’s
probability of being a successful trade will
increase tremendously.

Note:- if only two components match that trade

will also have a high accuracy but in two star
trade our required components will be

(1)
Demand zone
(2) Trapping candle high breaking.

Note:-in these three components stochastic RSI

has the lowest weightage so if stochastic RSI
does not so oversold on chart but demand zone
and trapping candle is giving signal of a long
trade,in this scenario we can take a long
trade.because stochastic RSI is an Indicator and
it’s accuracy is not more than 50 to 60 percent.
As you can see price came inside the demand zone,a
red trapping candle also formed and stochastic RSI
aslo showing oversold.so when price breaks the high
of trapping candle.we can take a long trade.because
it is a three star trade.and all three components are
showing entry of a long trade.

Target will be atleast 1:2 of risk reward.

LET’S SEE SOME MORE EXAMPLES

This is the 5min chart of Banknifty future.

In this 5min chart of Banknifty I have marked
demand zone,and shown trapping candle with a
blue arrow on the chart but here volume of
trapping candle is higher or almost equal to the
volume of previous candle so in this scenario we
can consider the red candle as a trapping
candle.so our entry will be at the break of high of
trapping candle as shown in chart.and here our
stopp loss can be at the low entry candle or
nearest swing low.or below the distal line.and our
target will be atleast 1:2 of risk reward.

This time it is a two star trade so To make it a

three star trade we will use stochastic RSI
Indicator as you can see below in the chart.

Here we can see stochastic RSI is showing

oversold.so it is not matching our condition of a three
star trade.so we can take this trade without any
hesitation because stochastic RSI has the lowest
weightage out of our three components.but this will be
a two star trade.

Let’s see one more example.

This is hourly chart of HDFC LTD.
In this 5min chart of HDFC LTD I have marked a
demand zone with two black lines, one is
proximal line and second is distal line.i have
marked sellers trapping candle with a blue
arrow,you can see the volume of sellers trapping
red candle is higher than the volume of previous
candle of sellers trapping candle.so we will take
entry at the break of high of sellers trapping
candle as you can see I have highlighted the entry
level with a black line on the chart.stop loss will
be little below the distal line or at the nearest
swing low.target will be always 1:2 of risk reward.
(2) VOLUME ANALYSIS IN SUPPLY
ZONES TO TAKE SHORT INTRADAY
TRADES. -----------------------------------------
------------
WHAT DO WE NEED TO TAKE A TRADE WITH
THE CONFIRMATION OF VOLUME?

• The first thing which we need is 5min chart.

• Plot volume bars on 5min chart.
• Find Supply zone/area on 5min chart
• Find a green buyers trapping candle on 5min
chart and when price will come again in the
supply zone then we will take a short trade on the
low breaking of 5min buyers trapping candle.as
you can see below in the chart.
• In this volume based trading, our Entry will
always be at the break of low of buyers trapping
candle.
Note:- what is buyers trapping candle?

Ans:- A 5min green candle whose volume should

be higher than the volume of previous 5min
candon chart.(note:-previous candle of buyers
trapping candle can be both in color i.e red or
green.)
See the examples below.
THIS IS HOURLY CHART OF HDFC LTD.

In the above chart of HDFC LTD I have marked a

Supply zone with two black lines in which one is
proximal line and second is distal line.this is DRAW
BASE DRAW PATTERN (DBD).I have also shown
green buyers trapping candle with a blue arrow on the
chart.as you can see clearly that the volume of buyers
trapping candle is higher than the volume of previous
candle.so one can take a short trade at the break of
low of buyers trapping candle.
SO WHEN PRICE CAME NEAR THE SUPPLY ZONE
WE COULD TAKE A SHORT TRADE IN TWO WAYS.

(1) A AGGRESSIVE trader could take a short trade

when price came near the proximal line keeping the
Stop loss little above the distal line.

(2) But a risk adverse trader could take a short trade

after the break of low of buyers trapping candle
keeping the Stop loss at the nearest swing high or
little above the distal line.as I have shown above on
the chart of HDFC LTD.

Note:- so this time we have two star trade in

HDFC LTD.so to make it a three star trade we will
add stochastic RSI indicator.as you can see
below.here stochastic RSI is also showing
oversold so now this trade became a three star
trade and it’s probability of winning was very
high.
Let’s take one more example.

This is hourly chart of Adani port special Ltd.

You can see in this chart of Adani port special Ltd
that I have marked a Supply zone on 5min chart with
two black lines.first black line is the Proximal line and
second black line is the distal lline. And I have also
shown buyers trapping candle with a blue
arrow,whose volume is higher than the volume of
previous candle.

So our entry will be at the break of low of buyers

trapping candle as you can see I have shown entry
point with a small black line.and our stop loss will be
little above the distal line as usual.
To check this trade,is it a three star trade,we will
use stochastic RSI as shown below in the chart.

Here,we can see stochastic RSI is also showing

oversold on the chart.so it is highly confirmed
that stock will come down.and stock has come
down.so it was a three star trade.
Let’s discuss one more example,

This is hourly chart of Dr Reddy’s Labs Ltd

You can see in the 5min chart of dr reddy
laboratories Ltd.that I have marked Supply zone
with two black lines in which one is proximal line
and second is distal line.I have also shown
buyers trapping candle with two blue arrow lines
as you can see.but here is a twist,the twist is that
here first buyers trapping candle low has not
been broken but the low of second buyers
trapping candle has been broken so we will take
entry at the low of second buyers trapping candle
as you can see on above chart where I have
marked entry level with a small black line.and our
stop loss will be at nearest swing high.or little
above the distal line.target will be atleast 1:2 of
risk rewards.

Note:- (a) To take a short trade:- Numbers of

buyers trapping candle do not matter until low of
a buyers trapping Candle is broken.entry will be
taken only after the break of low of the buyer
trapping candle.

(C) To take a long trade:-Numbers of sellers

trapping candle do not matter until high of a
sellers trapping candle is broken.entry will be
taken only after the break of high of the sellers
trapping candle.

Now if we have to check,is it a three star trade

then we will use stochastic RSI Indicator as
shown below on the chart.
Here we can see clearly that stochastic RSI is also
moving down so it is a confirmation that we can
take a short trade whose probability of being right
is very high so the intraday trade in Dr Reddys
Labs Ltd is a three star trade.
BEST OF LUCK GUYS HAPPY
TRADING JOURNEY
----------------++++++++----------+-------+----+++++++-----
-------
POSITION SIZING -----------------------------
---------
CALCULATION OF POSITION SIZING
Hello my dear readers,as we know that we have
discussed many setups on the basis of demand
and supply to trade in the market.but a trader can
not be a successful trader unless he learns the
concepts of position sizing.

Suppose a novice trader has a capital of 2

lakh.and he is getting leverage of 10 times from
his broker to take a intraday trade.so now he can
buy shares of 20 lakh
((i.e 2lakh ×10times=20 lakh).
And Let if he wants to buy the shares of a
company XYZ Whose current share price is
200INR,so in this case he can buy 10,000 shares
of the company XYZ with his only capital of 2lakh.
Let’s see the calculation,

2 lakh(Real capital)
10 times leverage from broker
200 INR( current share price of company XYZ)

THEREFORE,
2 (lakh) × 10 times / 200 INR= 10,000 shares.
So here,with a capital of only 2 lakh he can buy
10,000 shares of XYZ.But here arises a big
question.and the question is :- should a trader
buy 10,000 shares of XYZ with a capital of only 2
lakh?

According to me this will be not a good decision

to take a huge quantities of shares in a capital of
2 lakh only.
Always remember that a wrong position sizeing
can be disaster for your capital as well as for your
trading career.no strategy can make you
profitable if you calculate your position size
wrongly.

Let’s calculate how it can be a disaster for your

capital.

Suppose you buy 10,000 shares of XYZ at 200 INR

for your intraday trade with a capital of 2
lakh.keeping the stop loss of 3 points and target
will be of 6 points according to the risk reward of
1:2.

SO when you achieve your target of 6 point,your

profit will be 6 × 10,000=60,000/-(i.e profit of
60,000).
But when you do not get your target points and
your stop loss is hit of 3 points,your loss will be 3
× 10,000=30,000/-(i.e loss of 30,000) .
So now everything is clear:-when you get your
target,you make a huge profit of 60,000.which
looks very attractive.

But when you lose,you also make a huge loss of

30,000/- which is a huge loss of 15 % of your
2lakh capital.And it is said that In intraday trading
a trader should not take risk of more than 2% of
his capital.Which is 4000rs of your 2 lakh capital.

So to avoid these mistakes.here comes the

important role of positions sizing.
Let’s see,
Let’s take the same example of XYZ.
Share price of XYZ = 200 INR
Your capital amount= 2,00,000 RS

SO you have to take risk of 2% only of your

capital which will be 4,000 Rs.
So to calculate the position size or what
quantities of shares one can buy in a capital of 2
lakh to take a intraday trade.we will use the
formula given below.
FORMULA:-Total amount of your risk divided by
size of your stop loss.
TOTAL AMOUNT OF YOUR RISK / SIZE OF YOUR
STOP LOSS =?
So here your total risk is 4,000 which is 2% of
your 2 lakh capital.

And suppose you are keeping stop loss of 5

points down.which will be at 195 INR.so size of
youy stop loss is 5.

Therefore,. 4000 / 5 = 800 quantities of shares can

be bought.
So,here we can buy 800 shares of XYZ only. Now
recalculate it supposing that your stop loss has
gone or hit. So 800 × 5 = 4,000/
So here we lost 4000 RS ,which is exactly the 2%
of your 2 lakh capital.
Let’s see one more example,
Suppose I have a capital of 5 lakh.and I want to
take a short trade in Titan company Ltd.

• So, current share price of titan = 1000 INR.

• My capital amount = 5,00,000/
• 2% of my capital will be = 10,000RS(so in this

trade I can not lose more than 10k).

• Suppose size of my stop loss is = 8 points up
Which is AT 1008 INR.
So now we can use our formula to calculate.see
below

TOTAL AMOUNT OF MY RISK / SIZE OF MY STOP

LOSS = ?
10,000 / 8 = 1250 shares can only be shorted in
Titan Ltd by me.
So let’s check it by recalculating.

Suppose my trade has gone wrong so it has hit

my stop loss. In this case my loss exceed more
than 10,000 RS. So see

1250 × 8 = 10,000RS. =TOTAL LOSS

SO here you can see I have exactly lost only

10,000 Rs which is 2% of my 5lakh capital. So I
assume that you would have learnt calculation of
position sizing.

Now, I trust you that you will never take any trade
without the calculation of the proper position size.

----------------+++++++-------------+++++++-----------
TRADE MANAGEMENT ---------------------
----------------------------
In the previous chapter we have completed the
discussion on position sizing.now in this chapter
we will discuss about the trade
management.many people thin that both money
management and trade management are same.but
in reality trade management is a different
concept.and it is very important mostly for the
novice traders.

A novice trader think that his job is only to take

entry in a trade.there after it’s market job that
wheather it gives his target or hits his stop
loss.but this is not the complete truth.

An experienced trader knows it very well that real

trading begins after the entry in a trade.and an
experienced trader manages his live running
trades during the intraday Tradings hours.so
managing of live running trades is considered as
trade management.and trade management
reduces the risks involved in a trade very much.

So in this chapter of trade management we will

read two ways through which we can manage our
running trades
effectively.and it will reduce our risk also.so it’s
your job which one you choose to use while
Trading.
Let’s begin,

(1) FIRST SYSTEM OF TRADE MANAGEMENT :-in

the first system of trade management I will
discuss my technique which I use many times.

Suppose I am buying 500 shares of TATA

MOTORS LTD at a share price of 800 and my stop
loss is of 5 points.so I will keep my stop loss at
the level of 795.What all can happen just see
below in two cases.

Case:-1 in case one I will book the 60% of my

profit at the level of 805.and I will trail my stop
loss to the break even(i.e exact at buying level).

So 60% of 500 shares is 300 shares, therefore I

have booked profit of 300 Shares × 5=1500 RS.

• So assume if price goes to at the level of 815 .

now our remaining 40% shares will give me more
15 points.so remaining 40% shares of total
quantities are 200 shares.therefore I will book
extra
200 × 15 = 3000 Rs.
So my total booked profit will be:- 3000 + 1500 =
4500RS.

• Assume that share price returns back from 805

and hit my stop loss which was trailed to break
even by me.so we know that I have already
booked 1500 profits.

So in this case my profit will be = 1500Rs which is

a good profit according to me.

• Assume I do not trail my stop loss to my break

even.so here also share price returns back from
the level of 805 and hits the stop loss at 795.

So here I have already booked 60% of my toal

quantities which is 1500rs profit at the level of
805.

But my stop loss has gone in this case so I will

calculate my loss hhere which will be remaining
40% shares multiplied by stop loss size which is
of 5 points.

200 (40% of total shares) × 5 = 1,000rs will be my

loss due to stop loss.
So here I will substract my loss from my booked
profit as
Booked profit(60%) - booked loss(40%)=? 1500rs.
– 1000rs= 500rs (reamins profit)

So you can see in this case also that I am still in

profit of 500rs.and if I pay my brokerage and
taxes.it would be around 300rs.so atleast I have
not made any loss.

NOTE:-So if a novice trader does not have

patience to wait to get atleast target of 1:2,then he
can book his 60% of his profit at 1:1 and Then he
can trail his stop loss to break even and if share
price moves up then in this way he can ride the
trend comfortably without any fear or reversal. Or
if price returns back to his entry level then
automatically he will exit with a profit of 60%
which he has already booked.

And if he does not trail his stop loss to break

even.in this case also he will neither lose a single
penny nor profit.
Note:- we can use this system while shorting also
( I.e vice versa)

Note:-here you were thinking that 1500rs is not a

big profit.so see when you will increase your
quantities this 60% of profit will be very big.and in
this system it’s very hard to lose.so understand it
clearly.
(2) Second system of trade
management for indices traders: this
system is designed for indices
traders.as we know these days most
of the Traders like to trade in nifty and
banknifty mostly.because they get
good volumes in these indices.
So let’s see what tells this trade
management system. Note:- current
one lot of nifty is 50. Current One lot of
bank nifty is 25.
Suppose I buy one lot of nifty at the
price level of 10050 and keeps the stop
loss of 25 point which will be at 10025.
And my target is of 50 points which
will be at 10100.so when price will
touch the level of 10075,I will add one
more lot at 10075 by trailing my stop
loss at the break even.so you can see
here that my risk size is still only 25
points but I have increased my profits
size and that is the profits of 75
points.let’s see how
Here I have bought my first lot of nifty
at 10050 keeping a stop loss of 25
points at 10025.so if price reverse and
hit my stop loss I will lose 25 points
but think if price touches the level of
10075 then I would have added one
more lot at 10075 by trailing my stop
loss at break even from 10025 Which
will be at 10050.and if again reverse
the price from 10075 and hit my stop
loss which is at 10050. So still I am
losing only 25 points because there is
a gap of 25 points only between 10075
and 10050.so i am losing 25 points
because of my 2nd lot which had been
added by me at 10075.but in first lot I
am losing nothing. Again think if I
achieve my target of 50 points which
is at 10100.in this case I will get 50
points from lot one because there is a
gap of 50 points between 10050 and
10100 and getting extra 25 points from
second lot.because here is also a gap
of 25 points between 10075 and
10100.so my total points which I will
get will be 50 + 25 =75 points.
So you can see clearly that when I am
losing,I lose only 25 points but when I
am winning,I win atleast 75 points.and
in this way I have made this trade a
trade of 1:3.
So let’s calculate the amount of profits
and loss.
Loss- 25 points × 50( size of one
lot)=1,250rs. Profits – 75 points × 50
=3,750rs.
So now it’s clear that when I am
winning, I win 3,750rs but when I am
losing,i lose only 1,250rs.and this
strategy of managing is very good to
be a profitable trader.
Note:- we can use the same system
while shorting also or vice versa.
Note:-Break even means the level
where I have bought my first lot of
Nifty.
MONEY MANAGEMENT ---------------------
------------------------
Money management play a very important role in
trading. it’s work is to protect our capital.i have
seen many novice traders that they just come into
market without any proper knowledge of trading
and they lose their total capital within 90 days.but
the main reason behind this is that they do not
have knowledge of money management.so in this
chapter we will discuss about money
management so that we may protect our capital.
Rules of money management.
• The most important rule of money management
is that never take a risk of more than 2% of your
capital.in every trade our risk should not exceed
more than 2%.and If a trader follows this one
simple rule, this rule is alone enough to protect
his capital.

Let’s take an example: -suppose I have a capital

of 4 lakh so according to the rule of money
management.i will take the risk of only 2%,so the
two percent of 4 lakh is 8,000/.now it’s clear that
when I fail in a trade i will lose only 8,000/- Which
is only 2% of my total capital.and still I have my
remaining 98% of capital.
Suppose I take 10 trades in a month and my
accuracy is only 50%.but I take my targets
according to the risk rewards of 1:2 so it’s clear
that when I lose I will lose 2% and when I win,I will
win atleast double of my risk.

So let’s calculate.

I will also use the rules of position sizing

here.therefore Total capital =4,00,000/
My risk will be= 2% or 8,000/
My accuracy is only 50% so I will lose in 5 trades
out of 10 trades.
So,if my risk is of 8000/- so my total loss in 5
trades out of 10 trades will be 8000 × 5 = 40,000rs.
And when I win,my profits in 5 trades out of 10
trades will be 16,000 × 5 = 80,000 RS.so it is very
much clear that I am still in profit of 40,000 rs.
80,000 – 40,000 = 40,000/- profit.
So this is the benefit of money management if we
use it strictly.
USE OF 20 SMA AND 200 SMA TO
TAKE A INTRADAY REVERSAL TRADE
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This is my one of the most important concept of
reversal trading.as you would have heard that the
most powerful moving average are 20 SMA and
200 SMA (simple moving average).so if price is
moving above the 200 sma it is considered as a
uptrend and if price is moving below the 200 sma
it is considered as a downtrend.so here I will use
both 20 sma and 200 sma to take a high
probability reversal trade.

What do we need to take a reversal trade IN

UPTREND? A Supply zone
20 SMA
200 SMA
Price

( 1 ) THE RULES TO TAKE REVERSAL TRADE IN

UPTREND.

• Price should be above 20 SMA with a gap or

price should be away from the 20 SMA.
• 20 SMA should be above 200 SMA with a huge
gap or

20 SMA should be far away from 200 SMA.

• Find and draw a Supply
• entry will be at the supply zone to take a short
trade.

Note:- always remember that only short reversal

trades will be taken in uptrend.

Let’s see an example below in chart .

This is 5min chart of nifty future,here we have

price ,20 SMA and 200 SMA.
SO WE CAN CLEARLY SEE THAT I HAVE
ALREADY MARKED A SUPPLY ZONE WITH TWO
BLACK LINES.price is above the 200 sma and 20
sma so nifty is in uptrend.HERE IS ALSO A GAP
BETWEEN 20 SMA AND PRICE I HAVE MARKED
THE GAP WITH A Arrow.AND THERS IS ALSO A
BIG GAP BETWEEN 20 SMA AND 200 SMA
WHICH HAS BEEN ALSO SHOWN WITH A
ARROW. I HAVE ALSO MARKED A BUYERS
TRAPPING CANDLE WITH A BLUE ARROW ON
CHART AS YOU CAN SEE,SO OUR SETUP IS
READY TO TAKE A REVERSAL TRADE TO
SHORT.SO WHEN PRICE CAME NEAR OR IN THE
SUPPLY ZONE WE CAN TAKE A SHORT TRADE
or we can also take a short trade after or at the
break of low of buyers trapping candle KEEPING
the stop loss little above the distal line of Supply
zone.and we will always try to take a target of
atleast 1:2.

To get more confirmation to take a short reversal

trade.we can use stochastic RSI Indicator as I
have used below in the chart of same nifty future.
As you can see here,stochastic RSI is also
showing
oversold.so now it’s confirm that there is a high
probability that price is going to come down
towards the 200 sma.so I can take a short trade.

Let’s see one more example below

This is 5min chart of TATA COMPANY LTD as we
know,
according to our rules.i have marked a Supply
zone with two black lines,price is above the 20
SMA and 20 SMA is also above the 200 SMA.I
have also marked buyers trapping candle with a
black arrow as you can see in the chart.
Now, our setup is ready,so we can take a short
trade when price reached near the proximal line of
supply zone or we can also take a entry at the
break of low of buyers trapping candle keeping
the Stop loss little above the distal line of Supply
zone.and in this trade we have achieved target of
1:2 easily.
To get more confirmation to take a short reversal
trade,we can use stochastic RSI as given below in
the chart.

As you can see below in the same 5min chart of

titan Ltd that stochastic RSI is also moving down
from overbought zone.so it’s very much clear that
price will go down so we can take a short trade.

( 2 ) WHAT DO WE NEED TO TAKE A REVERSAL

TRADE IN DOWNTREND

• A DEMAND ZONE
• 20 SMA
• 200 SMA
• PRICE

THE RULES TO TAKE A REVERSAL TRADE IN

DOWNTREND.

• Draw a demand zone on 5 min chart.

• Price should be below the 20 sma
• 20 sma should be far away with a gap from 200
sma
• Use stochastic RSI for more confirmation.
• Entry will be near demand zone or at the break
of high of

sellers trapping candle.

Let’s see one example

This is 5 min chart of Asian paints Ltd,here I have

marked demand zone on 5min chart, price is
below 20 sma,20sma is also far away from 200
sma,I have also shown sellers trapping candle
with a arrow line.so now I could take entry when
price came back to demand zone or I can also
take entry at the high break of sellers trapping
candle keeping the Stop loss little

below the distal line of demand zone as you can

see in the below chart.
To get more confirmation,we can use stochastic
RSI Indicator.as I have shown below on same
5min chart of Asian paints Ltd.
Here stochastic RSI is also moving up from
oversold zone,so it’s clear that it’s a high
probability trade towards the up side.
BEST OF LUCK GUYS -----------------------
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maketradersprofitable@gmail.com