Identify Stock Operator Movements with Delivery % Swing Strategy | marketfeed

Summary

This video introduces a straightforward swing trading strategy based on delivery percentage, designed for traders seeking a less time-intensive approach than intraday trading. It focuses on identifying stocks with high delivery volume, indicating interest from big market players. The strategy emphasizes simple entry criteria, proper risk management with stop-losses, and profit-taking at key resistance levels. Real-world examples of stocks like Shopper Stop and 361 Wealth demonstrate the strategy's potential. With a focus on mindset, position sizing, and consistency, this strategy offers a clear and logical path to success in swing trading.

Takeaways

• 😀 Swing trading involves holding stocks for multiple days, aiming to profit from short-term price movements without the stress of day trading or long-term investing.
• 😀 The strategy focuses on trading based on delivery percentage, which indicates the amount of stocks transferred to investors' demat accounts, signaling accumulation by big players.
• 😀 Volume plays a crucial role in this strategy: high delivery percentage combined with high volume suggests intelligent buying, whereas low delivery percentage may indicate a speculative trade.
• 😀 To identify potential trades, use a screener to filter stocks with unusually high delivery percentages compared to historical norms, signaling significant buying activity.
• 😀 The entry condition is triggered when the stock's high from the day of the alert is breached within five trading days, signaling bullish momentum.
• 😀 Stop-loss should be placed just below the low of the entry candle, ensuring that a losing trade is cut off early to minimize losses.
• 😀 The target should be set at key resistance points, such as the 52-week high, to maximize profit while considering potential price rejections at resistance levels.
• 😀 Once the stock moves in your favor, you should trail your stop-loss upwards to lock in profits while allowing room for the stock to continue rising.
• 😀 Risk management is key—never risk more than 2% of your capital on a single trade to ensure you can manage multiple positions without putting your account at risk.
• 😀 Confidence in your strategy and disciplined execution of entry, exit, and risk management rules are essential to success in swing trading over time.

Q & A

What is swing trading, and how does it differ from intraday trading and long-term investing?

Swing trading involves buying stocks and holding them for multiple days, typically more than a week, to capture price movements. Unlike intraday trading, which requires buying and selling within the same day, swing trading allows traders to hold positions over a longer period. It also differs from long-term investing, as swing traders are focused on short-to-medium term price moves rather than holding for years.

Why is swing trading considered easier than intraday trading?

Swing trading is considered easier because it requires less daily involvement and doesn’t demand constant monitoring of price movements throughout the day. Traders can set price alerts or good-till-triggered (GTT) orders, making it less stressful than intraday trading, which involves more active management and fast decision-making.

What is the role of volume and delivery percentage in this strategy?

Volume refers to the number of shares traded, while delivery volume indicates shares transferred to a buyer's demat account, showing intent to hold the stock beyond the trading day. The delivery percentage helps identify whether investors are accumulating shares, which could signal potential bullish movement. A high delivery percentage suggests a strong interest in holding the stock for the long term.

How do you differentiate between a smart buyer and a losing intraday trader based on delivery percentage?

A smart buyer may take delivery of shares in anticipation of future price increases, while a losing intraday trader may take delivery to avoid realizing a loss at the end of the trading day. A higher delivery percentage indicates the potential for significant price movement if the buyer is strategically accumulating shares.

What tool or platform is recommended for screening stocks in this swing trading strategy?

The Stocket platform is recommended for screening stocks. It offers filters to identify stocks with high delivery volume and percentage. Additionally, the screener can be customized to include major stocks, Nifty 200, Nifty 500, Nifty FNO, or all NSE stocks.

What is the entry condition for the strategy, and why is it important?

The entry condition is based on the stock’s price crossing the high of a specific day’s candle. If the price crosses that level within the next five trading days without a gap up, the trade is considered. This confirms that big players are likely involved, and the stock is expected to rise. The timing of this entry is crucial to avoid entering weak trades.

What should a trader do if the stock’s high price is not crossed within five days after receiving the alert?

If the stock’s high price is not crossed within five days, it indicates that the stock may not have enough strength to move upward. In such cases, the trader should avoid entering the stock and look for other opportunities with stronger potential.

How should a trader set their stop loss in this strategy?

The stop loss should be set below the low of the specific candle where the entry was made. This ensures that if the stock moves against the trader’s position, losses are minimized. The recommended stop loss is around 3.5%, offering the stock some breathing room, but traders should exit if the stop loss is hit.

What is the recommended risk-to-reward ratio in this strategy?

A minimum risk-to-reward ratio of 1:1.5 is recommended, with a higher target of 1:2 being ideal. This ensures that the potential reward justifies the risk taken on the trade. A trader should aim for a risk-to-reward ratio that maximizes profit while keeping potential losses manageable.

What is the role of trailing the stop loss, and how can it help protect profits?

Trailing the stop loss allows a trader to lock in profits as the stock moves in their favor. When the stock price hits the target, the trader can book part of the position and adjust the stop loss to a higher level. This ensures that even if the price reverses, the trader exits with a profit or at breakeven.