This is a strategy for Swing Traders who just want to capture the swing and don't want to hold the stock for months. This strategy requires 3 indicators:-
Bollinger band (20,2) and Bollinger band (20,1)
Volume
MACD
Trade Setup for Long:-
1] The candle which closes above UB 2, we will call it BREAKOUT CANDLE.
The BREAKOUT CANDLE should have following properties;
a) The volume of this candle should be greater than previous TWO CANDLE's volume.
b) MACD histogram and MACD line should be greater than zero.
2] There should be minimum TWO CANDLES just before the BREAKOUT CANDLE which closed
between UB 2 and BASIS. Those TWO CANDLES should consists of atleast one RED CANDLE.
And that RED CANDLE should not touch the BASIS.
TIMEFRAME:- DAILY CHART.
When all of the above requirements is fullfilled we can BUY above the high of BREAKOUT CANDLE.
STOPLOSS is 1 point below the low of BREAKOUT CANDLE.
TARGET is 2 times the STOPLOSS.
DISCLAMER:- this is for educational purposes only.
DON'T apply this startegy directly with real money. First do paper trade and see the results and analyse the profitability of this strategy.
Bollinger band (20,2) and Bollinger band (20,1)
Volume
MACD
Trade Setup for Long:-
1] The candle which closes above UB 2, we will call it BREAKOUT CANDLE.
The BREAKOUT CANDLE should have following properties;
a) The volume of this candle should be greater than previous TWO CANDLE's volume.
b) MACD histogram and MACD line should be greater than zero.
2] There should be minimum TWO CANDLES just before the BREAKOUT CANDLE which closed
between UB 2 and BASIS. Those TWO CANDLES should consists of atleast one RED CANDLE.
And that RED CANDLE should not touch the BASIS.
TIMEFRAME:- DAILY CHART.
When all of the above requirements is fullfilled we can BUY above the high of BREAKOUT CANDLE.
STOPLOSS is 1 point below the low of BREAKOUT CANDLE.
TARGET is 2 times the STOPLOSS.
DISCLAMER:- this is for educational purposes only.
DON'T apply this startegy directly with real money. First do paper trade and see the results and analyse the profitability of this strategy.
If you want a fixed value you can use the below calulations.
*Candle's upper wick should be less than 15% of the entire range of the candle.
(high-close) < 0.15 of (high-low)
in the above breakout candle
high=368.9, low=342.1, close=366.2
if we apply the formula
368.9-366.2 < 0.15x(368.9-342.1)
2.7 < 4.02