This is a price graph for Aarti Drugs Ltd. of last 8 months.
Lets assume we enter just after 'OO' point becuase it has just made a clear higher low.
We will put SL at 'OO'
It makes a high at 'A' (we are already sitting at decent profit)
Just when it started to fall after 'A' we would be tempted to book profit.
But since this breakout came after a higher low at 'OO', it is possible that after consolidation and after making another higher low the price may continue to rise.
Be ready to sacrifice half of profit (OO to A).
Hold on with SL equal to half of OO-A.
Fortunately the price turns at B. hold on.
It again turns at C.
Now put SL at the level of B.
Unfortunately, it slips below C and we trigger the SL and book profit I.
The price turns at D but we wait as it has made a lower low.
After a while it turns at F which is slightly higher than D and we buy with strict SL of F.
The second major higher low is formed.
The continuation of the breakout is confirmed.
(Pl remember, it may not be possible to enter at exact points if there is gap up/down opening. Also, 100 EMA on intraday chart or EoD values can be taken as the point to enter or exit.)
The price shoots up and continues till G and then starts to correct.
Immediately set the SL at half of F-G.
Fortunately, it turns at H.
This may be a true or false turn. so wait with SL of half of F-G till the upmove is resumed for sure.
Turns again at I. Keep SL tight.
It starts to correct and crosses the bumb at J. Keep SL strict at half of F-G.
Fortunately it takes support at K (slightly above our SL, otherwise SL would have to be opted for)
Now my SL is at K-level.
Price inches up with a combination of small steps at L,M,N and O.
After O, the rocket is fired and the highly controlled and skillful patience is rewarded. Third major higher low is formed.
Just after the price starts moving up from O, the SL is revised to O-level.
It continues to climb.
It is a very sharp and long spike. Wait for the bump very alertly.
The bump comes at P.
Now a good consolidation and correction is expected because the price has run up very high in very short time.
It is likely to take a breather. There may be some profit booking bout.
Either book profit or Fix SL at 25% of O-P jump.
The SL is triggered and we book Profit II.
The sharp profit booking starts.
But again the price rebounds from Q.
Buy the stock when it just starts moving up from Q with SL at Q.
This is a small gamble. such risks may pay-off.
This time it does go your way and the price goes till R (stop loss at Q)
It turns from R and we revise the SL at half of Q-R climb.
Fortunately it takes support at S, but we keel the SL at half of Q-R.
It starts moving up from S and we revise the stop loss at S.
It turns at T and we revise the SL at half of S-T spike.
Fortunately it again turns at U before sL is hit,
and starts to shoot again. Now revise the SL at U.
It climbs till V, and threatens to fall.
we revise SL to 25% of U-V spike.
After a brief drama at W and X, the SL is hit and we book profit III.
The price starts falling but we are out with the booty.
The swing trading would have doubled your wealth in around 2 months. I am sure Day Trading couldn't have achieve this here.
The tortoise would have beaten the hare. Because there is a tortoise under the hare's skin and a hare under the tortoise' skin!
The mountain was climbed beautifully with the help of SL hooks continuosly revised upwards!
Pl practice it beyond Y till Z.
The Stop Loss of Trader Mountaineers
Did U see any mountaineer climb without a stop loss!
(see the rope, it is tied with a security hook embedded in the mountain wall crack/gap)
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