Catapult Day Trading Technique...

Have you ever played with a catapult ("gulel") when you were a kid!

When you load a small stone in it and stretch the band, the stone shoots like a bullet! It is because it was being stretched against its wish and got away at the first opportunity!

This same concept works very fine in stock market as well!

Here Nifty is the catapult and the stock is a stone!

When Nifty is falling , almost every stock falls with it. Even those which rise, rise less.

So, when nifty stops falling and starts rising

The ones which were falling less than the nifty was falling, and the ones which were rising (though slowly) when nifty was falling will rise much more than the nifty will rise!

You can use this fact by keeping an eye on the stocks which are defying the dictat of the nifty.

So, Buy an A category stock which is refusing to fall with nifty (or atleast as much as the nifty is falling).

e.g If nifty has fallen 1%, then look specifically for stocks which have fallen much less than that, say 0.2% or rather has risen around 0 to 1%!

Avoid stock that has moved more than 1% while nifty is going down.

The logic behind this is pretty simple : Had the nifty not fallen as much as it has, these stocks would have risen much more! Nifty , while falling, is holding these stocks from moving up.

Now, only thing left to be decided is when to buy! That I leave upto you to decide.

It is a matter of practice and judgement.

If you find it difficult to locate the point of entry, you can use hedging as below:-

Sell one lot nifty and buy one lot of that stock!

The entire method discussed above is for falling nifty. Reverse is also true for rising nifty.

Paper trade this technique for minimum 10 days to master and fine-tune this technique before applying!