Trading based on open high

 There are many ways of trading. Trade should be done based on candlestick chart patterns. Various charts patterns are studied before taking trade. You should try to learn those patterns practically. 

One of the most famous pattern is known as open high or OH pattern. In this pattern open price equals the high price of the candle formed. You can use this pattern for both positional or intraday trading. 

For positional trading we will use day time-frame as shown in the above picture. If on a day open price is the high price then we should short sell in the stock or index. 

Points to remember

1. The price must open gap up on the next day the candle formed before.

2. The OH candle must not be much long.

3. The open high candle must not be formed on the lower side of the bollinger band. 

I have shown one  example for you. I have shown reliance candlestick chart on day time-frame. In this picture you can see open high candle on the day time-frame. After the formation of open high candle reliance has fallen more than 5 percent. 

Hedging positional trading

There are many strategy in trading on google and youtube. But in live market it needs skill to apply them accurately. In live market emotion is our big enemy. It is very tough task to control our emotion in live market it requires a lot of practice. Only one thing save you from your emotion that is known as hedging.

Hedging can be done in several ways. There are various forms available on the subject hedging. Many trader says there is low profit in hedging but i know the profit is consistent. If you trade options naked, sometimes you win sometimes you lose but at the end of the month most probably you will be in net loss.

In example i will explain you simple hedging

suppose nifty cureent price is at 15734

then if you buy 15700 ce( call option) 

then sell 15800 ce (call option)

it will become a hedge and your loss will be fixed. that is the difference between the prices of 15700 ce and 15800 ce.

Actually in hedge our emotion is under control as you dont have fear of big loss. In naked position emotion is our enemy in both the profit and loss. If your position is in loss you will hold till zero and if you are in profit you will book soon. In naked option buying time is also big enemy of trader so to cover time loss in our strategy we sell far otm so that we can gain our time loss from there. 

In short it is best practice to always hedge your position so that you cant have big loss.

How to start in share market

As a retailer experience i know it is very tough to success in the stock market. I am specially talking about indian stock market. It is really hard to earn money in this market.

Actually every retail trader think its very easy to earn in this market. But after spending time in real trade people know it is the toughest business in the world.

I work in telecom company and after working for six years i thought that i make small earning from share market. I started with buying 2-3 quantity of share. then i realized that brokerage is also there that reduces your profit and increase your loss.

So you need to make good profit to cover brokerage and annual maintenance charges.

Till i was investing in the shares i was in net profit. As you rarely make loss in the investment and you have plenty of time to sell your share at profit you can hold your shares if you are in loss. 

After earning money from investment your greed will become more. You will think its very easy to earn in the share market. After watching 10-12 videos on YouTube you will learn something about options chain and know that in options you can earn 2-5 k per day. In investment you are earning 2k in a month now in options you can earn 2k per day  so it would be thrill for you and you think you can easily learn options by watching some videos from youtube. The best part is that in first trade you will luckily earn 1000-1500 profit and here starts your trading journey.