It is now well known that:
1. The market opens at 9.15 AM and takes about 45 minutes to stabilize and show its true colors (say at about 10 AM).
2. Serious players get in after 2 PM and set the trend for the coming days.
This strategy will help you figure out:
1. Which way the market will trend in the first half
2. How the market will possibly behave between 2 PM and the close (3.30 PM).
To play this strategy all you have to do is:
1. Watch the charts continuously
2. Know how to draw a straight line on the carts
5 Minute Candle Price Action Strategy at 10 AM
Mark the highs and lows between 9.15 AM and 10 AM by drawing straight lines.
Let’s take an example:
Lupin’s started the day at around 896 and ht about 908 by 10 AM.
This range was marked on the chart above.
The higher price becomes the resistance and the lower price is the support.
At around 10.15 AM or so, the price broke convincingly above the higher range at 910.
This was a buy signal. The price went on to hit 940.
Let’s take another example – of Indraprastha Gas:
In Indraprastha Gas, using the same technique as above, we get 292 as the resistance and 289 as the support.
The price broke below 289 at 10.05 AM and fell to 185.80, from where it started rising.
Had you shorted at 10.05 AM, you could have made 1+% gains.
Rules of this Strategy
1. Buy when the price breaks above the resistance
2. Sell when the price breaks below the support
3. Expect gains up to 2%
4. Set stop losses at about 0.75%
5. Pay attention to the length and number of candles crossing above or below the ranges – the longer, the better.
5 Minute Candle Price Action Strategy at 2 PM
2 PM is when it is said that the serious players get in.
And now, this is the part where you learn to rely on your own.
Draw ranges as per the previous strategy between 1.30 PM and 2 PM on any FNO stock and observe the price action after 2 PM.
Remember that the serious players get in after 2 PM and therefore you can get many BTST (or even longer) signals by marking ranges at 2 PM.
This exercise will help you draw basic chart patterns and eventually become a better chart reader.