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Entry price

Discussion in 'Technical Analysis' started by ajaysinghchand, Sep 28, 2012.

  1. ajaysinghchand

    ajaysinghchand New Member

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    hello all,

    i am not clear as to when to enter a trade on a breakout, as the book says wait for the breakout to happen, is it on a closing price basis.

    like eg today jubliant food and acc have given a breakout and both forming a u pattern, should one have bought today or waited for the closing.

    i did the same for voltas and bought at 132 on 26th and it came down 6% the next day after breakout.

    pl need your views
     
    ajaysinghchand, Sep 28, 2012
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  2. shabbir

    shabbir Administrator Staff Member

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    The break out above the previous high in higher top and higher bottom patter or W pattern but U is something where you don't see any breakouts.

    Now coming back to your stock of Jubilant Foodworks,

    Its best purchase breakout was above 1250 and now 1350

    ACC above 1400

    Now when I say above price X, you have to find the SL and see if you are comfortable loosing the amount above X to hit SL.

    Now let me also analyze Voltas for you and that will help you understand things.

    Voltas is good above 120 and above 132 but then if you are buying above 132, your stop loss would be 105 levels and so now you have to decide if you are ready to hold that stock for hitting stop loss or not.
     
    shabbir, Sep 28, 2012
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  3. ajaysinghchand

    ajaysinghchand New Member

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    dear shabbir,

    if i understand correctly for jubliant food
    buy at 1250 sl 1100
    buy at 1350 sl 1250
    meaning more than Rs 150 sl approx 10% thereby ruling out buying a future because the losses would be huge and maybe it may expire. Is this why you suggest to buy equity and reduce risk.

    would it still be ok to move UP the sl to 5% and play the future but at huge risk of sl being triggered and a reduced target on 10%

    for ACC buy 1400 SL 1300

    For voltas i made the mistake of buying two futures at 132 and quit today with huge losses( a lesson). Could have cut my posn yesterday when voltas moved down 5%.

    advice please
     
    ajaysinghchand, Sep 28, 2012
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  4. shabbir

    shabbir Administrator Staff Member

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    No, you did not understand precisely what I meant. in 1250 it was clear break out and so stop loss of 1100 is fine but at 1350 there was no consolidation and so stop loss would again be 1100 and so that becomes very risky trade.

    Sharp fall does not mean cut the loss the same point but just don't wait for profit from that trade and make small loss and get out of it. Explained in the chapter Morning panic and then spike and then afternoon fade in the ebook.
     
    shabbir, Sep 28, 2012
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