Some basics of our trading calls on the news letter

Why 2 entries in a trade?


Your queries were realistic and needs explanation. The concept we use in our analysis and tracking stocks for trades are based on the weekly chart. Also to find stocks that are into a clear and established trend we use a proprietary indicator which will soon be published on our exclusive charts on the site. We give 2 entries for each stock for a reason. the stocks that are in trend have almost reached their oversold or over bought position and are well close to their channel high or lows. Since it is established trend, we need the stock to pull back to value before we get a confirmation to trade them. 

A stock which is in an established trend is likely to continue for one more round of the same trend before any reversal occurs. So we wait for the stock to reach value zone that is their orange or black EMA's. We use orange EMA as first entry and Black EMA as stop loss. Many stocks when they are in a strong trend tend to reach only the orange EMA and then resume their trendy journey, while some move into the value zone to give us correct entries. and even some get weaker and hit stop losses. As we are using the highly trending stocks for trade, the probability of losing is lower, that is we select high probability winning stocks. But still ensure us with a stop loss in case the stock behaves in an adverse manner.

In a strong market when a stock just manages to reach the orange EMA and go in the direction of the main trend we loose the opportunity to capitalize on the highest potential waiting for it to reach within the value zone. So to ensure that we take the opportunity to make a small gain in the strong move too, we have formulated double entry system. so that we take first entry at the orange EMA, and is the stock moves into the value zone we get the next fill. In case the stock does not come in but resumes its trend, we still have a small position which gives us some profit from the strong move. Though these trades may not be highly rewarding ht probabilities of winning are very high.

And when stocks move into the value zone give the second entry and then resume their journey, our reward to risk is high and these types of trades make good the losses that come from losing trades. Traded with discipline following the system, over a long run the system is profitable at about 30% of the capital invested, this is our experience with the system in the market.

This is one type of entry methodology. there is and more technique of using macd histogram divergence on the weekly to trade positions. Reliance had such a call today, as it was not covered in our news letter section we did not publish it. Today in our Big Money Channel calls we had ARVIND which hit trigger and has closed positive, this stock is a good one compared to all its peers, a detailed description of the reason to trade this stock is written on our newsletter section. Again not all stocks that come under the categories listed on our site are winners. we identify the best stocks, then it is advisable to check their chart patterns to confirm the strength before taking trading position.

R/R?

 Is the Reward to Risk a trade offers. For example. In Kale consultants. The entry price is 96.65 and 94.25, assumed that both the entries are filled and this trade has a stop of 91.90. Our combined risk on this trade per share on an average is, suppose one stock each is traded for both the prices. the average cost is 94.45 per share. so our risk per share is 94.45-91.90 is 2.55. the target for the stock is 124.20. the net gain will be 29.65 per share. so for a risk of 2.55  we are having a potential gain of 29.65 that 7.60times the risk exposed in the share. Normally taking positions that have above 3 time R/R is good . this is done to ensure that even if we have 4 losing trades in our calls the winning trades will make good of all the losses and still keep our account positive in the long run. 

Two beautiful questions about the usage of a particular system was answered here. Thank you for giving an opportunity to give this clear explanation. This is a very nice piece of information for many traders. hence, with your permission, I am placing this answer on the blog for others to benefit from the knowledge.