Trading Top Gainer/Looser Stocks to catch early morning momentum

Why we think trading Top Gainer/Loser is wise idea?

ü  Our observation for top gainer/loser… Big players take position which they want to move up as soon as market opens… they mostly buy pre-open which result gaps.

ü  Overnight News may attract lot of order flow during open.

ü  Range bound for last N days... breakthrough in form of Gap or fast move in first 10-15 minutes generally & continue gradual trending move henceforth.. If momentum keeps going.

ü  Sometimes we get counter trend gap up for stocks in downtrend in higher time frame... with counter trend gap’s we can expect short covering intraday… (Or) if such gap is to TRAP intraday players, my observation is that even though they opened counter trend gap, they tend to move in direction of higher time frame quickly. In that case our trade won’t get triggered.

From month of MAY, he started trading in stocks with 10% of capital. It going very well.

Let me summarize the process.

Steps:

1.       Add nifty50 stocks as watch list

2.       At 9:16, Sort by High to low and make a note of top 5 stocks,, similarly note top 5 looser

3.       Quickly open all 10 charts

4.       Go through one by one... if Nifty seems in Uptrend,, look at top 5 gainer charts first

5.       Filter stocks which satisfying any of condition

·         Stock broke out of range formed over last 3 or >3 days

·         Stock which is in down trend and today opened gap up, if gapped above PDH much better

·         Stock which is in downtrend and got quick rejection from PDL or any higher time frame support during open time

·         Stock which is in good uptrend and currently trading above PDH

·         News driven gap move -- coupling with any of above condition

6.       Decide position sizing based on risk involved in trade

7.       Pick short candidates in similar fashion as described in step 5

Refer below post for visual idea

http://onlyniftyy.blogspot.in/2017/11/high-probability-long-signal-example.html

Basically we are using same PA concepts what learnt from SMART TRADER.

Selection of right stocks to monitor at right time and with right mindset is the KEY here.

That selection we achieved by Sorting NIFTY stocks at opening time & mindset to decide which one has potential to move in trending direction,, which one may not move is something we applying based on learning’s from Nifty Nirvana & own experience of judging PA.

Below is the statement i would like to share (just to inspire DP Traders that we can trade stocks as well successfully with DP method).

 I generally don't like MTM showoff, as that is the way majority of fake people do fishing. i am making an exception today.

We will continue trading stocks with increased quantity for every 2 weeks of GREEN MTM.

Till today traded with 10% of capital only. From monday going to trade with 20% of capital as we got 2 weeks of green mtm. I hope this momentum gets going as we SCALE UP :)

Successful stock trading in early morning keeps you motivating for rest of day and also you will be fit physiologically to skip not so good setups in Nifty/Bank Nifty. One Shot Two Birds!