How To Trade Algo
Algorithm finds out stocks which closed near any major support or resistance levels and then comes out with price levels like order price, stop loss and target on next day after pre-market session at 9:12 AM. We buy the stock if it crosses any major resistance level and we sell the stock if it breaks the support level. The algo puts bracket order (BO/OCO) on your Kite/Upstox account with just one click of a button. You can modify the order before placing it. The algo puts both Buy and Sell orders in your account. You are required to exactly place the order / click on the button at 9:15:01 AM to have maximum benefits. You need to cancel orders at 3:15PM if any order is not filled or executed order not closed to avoid extra charge from brokers.
Right at 9:12AM, all the levels for the day will be updated on Algo Trades page as shown in below image. You need to click on the button exactly at 9:15:01 AM.
We Sell the stock which closes near resistance and we buy stocks which closes near support. Its always good to know the strategy on which you are going to make your trades.
Following image is from 6th June'18 trades.
Now there are two ways to trade these scripts, we will explain both of them here;
Method 1 : Using Trader's Hunt's Indicator on TradingView
If you are pro-subscriber at TradingView (pro-subscribers get real time price change on TradingView else its 15mins delay) and also have access to TH Buy & Sell Level Indicator, then you can directly click on Chart link. (If you dont have access to indicator then Click Here)
Please note, For this strategy we will buy scripts at Red Line and Sell at Green Line. Buy and Sell is as per Algo Prediction above.
After opening the chart on Trading View, apply TradersHunt Indicator on your chart, you will get different buy and sell levels alongwith targets on either 5min/15min and 1 hour Timeframe. If you are safe trader then we would suggest you to wait for first 5minutes before taking your trades. In 5mins, you can analyse your charts as follows;
VOLTAS 5 min Chart of 6th June 2018
As per our Algo Trade Levels, Voltas was buy at 505.74, now keep in mind to add 30-40 paise into Order Level before placing order. If script prediction is buy then add, and substract if prediction is Sell and similarly do same thing with SL level too. Now our Order Price for Voltas could have been 506.1 and SL 499.9 (please avoid to put round numbers). So those who are risky traders can place their orders right after market open and those who are safe traders can wait for 5-10 mins and place the orders.
In the above chart as it can be seen, Price got rejection from 505.8 line in first minute candle as marked in box. So safe traders could have placed their order with same levels after waiting for 5 minutes.
You can keep trailing you Stop Loss once script moves into your direction. First step to do is to make our SL Cost to Cost and when it moves above TGT2, we can trail SL to TGT1 and so on. So, Keep your money management in check.
Similarly, CIPLA was predicted on short side and it too showed similar reaction at our Order Level Price as per above Table.
If somehow, you missed the entry or missed morning session or looking into Algo Levels 2-3 hours after market open, then try to take entry when it retest any above mentioned level on Algo Table. for example look into following chart of VOLTAS;
Sometimes, Price goes till SL level and then reverses from there. In such scenario you can maximize your profits.
In Hexaware scenario, first 5 minutes candle closed below Order Level Price, so safe trades could have waited for placing buy orders.
So as soon as you see Price near SL level, you can place your order near Stop Loss Price with specified STOP LOSS on Algo Table. (by adding/substracting 30-40 paise). So In this case we could have placed our Buy Order for Hexaware at 402.3 or 403.3 with SL as 499.8 (as specified on Algo Table above minus 30/40 paise).
Please Note that NO TRADES SHOULD BE WITHOUT STOP LOSS.
Method 2 : Drawing Manual Line on your Trading Platform
If you are not pro-subscriber of TradingView and want to trade with real time data, then you can manually draw lines on your trading platform charts (Kite/Upstox etc) as shown below and can take your trades as explained above.
In the following image, We had drawn lines on Kite Chart as per Algo Trade Levels.
If you notice, all levels are being respected at some point in time, Like in above chart of Voltas, TGT3 Level 520.2 got respected and from there prices came down till TGT1.
ITS ALL ABOUT YOUR TRUST ON THESE LEVELS AND THE SCRIPT SELECTED BY THE ALGO.
THERE WILL BE SCRIPTS WHOSE SLs WILL GET HIT BUT AT THE END OF DAY OR WEEK, IT WILL KEEP YOU IN GREEN.
We also trade as per these levels everyday whenever we get time. on 7th June, one of the script that day was CAPF with Sell Prediction. Entry Level for Short was 572 and SL was 578.5 as shown in chart below;
In this chart we we saw it coming towards SL level as per Algo, and we had confidence on these levels so we took our short position in NFO (Futures), and shorted the script at 578 and high during that time in NFO was 578.9. From there it came down, as we saw it taking support at Green Line or Order Price 571 in Cash Market, We exited our Position with 7 Points. Images for your reference.
CAPF June FUT Chart - 15min 7th June Chart
Our Position, you can check time and chart for 7th June. We exited at 571. At the end of the Day, it went on to hit our SL but gave enough time for exit C2C or with small profits. So, if traded well alongwith Chart, these levels will mostly leave you in Green.