Always believe in your potential and remember you have to turn it into action. Today with this article Investelite Research guides you the strategies to utilize during market open.
While entering the stock market, there is the general philosophy of mainly newbie traders that money is in the morning. Well, the answer is yes or no that genuinely depends on your strategies and implementation. You can see the flood of traders trading or active in the morning but will it be worthwhile in your case that’s totally dependent on your philosophy of trading.
Investelite Research suggests you must wait your turn after the bell rings at 9.30 a.m. Stay informed and get confirmed after the news came and take a move thoroughly with right action and respond to this information that generates the move.
We believe Step back not to quit but for a good move in case of the bear market. Whatsoever may be the market condition you only know your investment analysis better.
Know whether the market is bull or bear before starting hour. Always study about 4-5 companies that are in NIfty 50 such as RIL, TCS, ICICI, HDFC Housing Loan, HDFC they nearly 30% on the stock market. These companies usually perform well and even in the bear market they recover themselves up too much extent due to their strong financial performance, credit profile and steady until execution.
Volatility will always be present whether you are in your opening hour or closing hour as it is the part of the phase. Here are the two strategies that everyone should look out so as to remove vague before entering into the trading session.
1. Fading the opening Gap: Going through Research from candlesticks graph, if there is gap let us say 1.5% & 2.5%, there is a solid chance for the price to completely retrace the gap. The reason is there was not a lot of force in the move, therefore traders will likely fade the gap. When the market will open spot the lackluster gaps, which believe it or not are quite prevalent in the market.
Here Investelite Research suggests here stop-loss strictly while trading this strategy. Use a stop-loss equal to half the amount gap. So, if the amount of the gap is at 2.3 %, one should be placed a stop loss at 1.15%. This stop will give you approx 1:2 risk to return ratio.
The target for each opening gap trade is close to the previous take.
2. Price Action Strategies: It is the best manner to ride a gap. Closely know and monitor the price action as it develops to anticipate which way the market will undoubtedly happen.
It is a suggestion from our side to sit tightly for the first 30 min and doing nothing just wait and watch condition, action will playouts without taking any trades. Based on the signals get from opening gap you may also wait up to 1 hour.
So, overall combining this two strategies will be helpful and advantageous for the opening gap plays.
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