What & When to buy

As I written before……..only two type of stocks should be traded, one those, trading near top and other trading near low. But the real question comes……Long or Short ….?

Well……., there is no perfect rules…..depend on price movement…..if the stock is moving up…...long…else short….avoid a narrow ranged or flat bias stock. But ……in 80% cases the stock can not perform out of overall trend…..i.e. if majority of stock is trading in red….the single stock can not move higher…….it will face the weakness ….and visa versa……so better to have a look on Index……if index is trading above (near) 1% ……. look for long….else short…..a range bound market……Index trading in a range of 20-30 points…….I normally look to short with 2 level stop (mentally and actual stop).

The second question…….where to buy/sell…..? Well…..in my opinion …….pick a stock trading at bottom and place a stop below day’s low……, or buy a stock near high….and place a stop below the previous candle…….It will be better to consider at-least 2 factors when buying near top ……..

1. It has broken it’s days high.
2. Previous high has been broken with higher volumes.

Besides these two some other factors those should/can be considered ……( I am lazy……., don’t update my data-bank also this is my professional problem as I don’t have so much time………)

1. On Previous day……the stock was closed near to day’s high.
2. It has broken it’s previous days high…..and not trading below it.

Few peoples use an other formula…….as they buy near 5-10-15 minutes ma and place a stop below it….., few peoples use pivot based or hourly support systems…….well matter of own experience……..can’t say.