Wednesday, October 16, 2013

Explanation of short term trading formula.

In my book In my book “ The winning theory in stock market” I give a short term trading formula . 
If you do not buy my book earlier then I give you a short summery of this formula 
1. This formula is not given here for day trading it is useful for 7-30 days delivery base trading and future and option positions. 
2. If last close- last open = negative figure and last close-today open is also a negative figure than you may make short positions because the stock is bearish. 
3. If last close- last open = positive figure and last close-today open is also a positive figure than you may make long positions because the stock is bullish. 
One of my book buyer not understand this formula and mail me that I give some explanation about this formula. 
Ok we take price of First source solution at 07.08.13 where last close-last open is 12.18-12.15=0.03 (positive) and 07.08.13 close -08.08.13 open is 12.31-12.28=0.03 (positive) that means stock is strong bullish in coming 7-30 days and you find that after 7 day at 19.08.13 price of firstsource is 12.77 and after 27 day price is 14.13 . 
My reader again ask that how we assume 7-30 days move in basis of single day close open ? OK, I am never claim that this formula is 100 % sure trading formula. This formula use 2 continuous day open close and give us a significant success rate (more than 50 % cases.)

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