Intraday Trading Strategies Explained

Apr 13, 2025

Lecture Notes: Stock Selection and Trading Strategies

Introduction

  • Speaker: Nandaki Swami
  • Topic: Stock selection for intraday trading using mathematical calculations.
  • Channel: Smart Index Edge

Stock Selection Process

Key Metric: 66.6% Threshold

  • Significance: Serves as a pivotal point in analysis akin to a 90-degree angle within a circle.
  • Calculation:
    • Calculate the square root of the closing price.
    • Multiply by 66.6%.
    • Use the result to derive support and resistance levels by adjusting the closing price.

Advantages

  • Momentum Stocks: Stocks selected can yield 2-3% gains, potentially up to 8%.
  • Options Trading: Selected stocks become liquid in options, providing opportunities for exponential profits.

Mathematical Foundation

  • Principle: 66.6% threshold symbolizes a turning point, indicating breakout stocks.
  • Screening Process: Stocks must be above the 5-day closing average.

Strategy for Options Trading

Option Selection and Timing

  • Select Out-of-the-Money Options:
    • Affordable and positioned for profit as they reach target ratios of 1:2.
    • Emphasizes timing market conditions for optimal entry.

Importance of Timing

  • Market Correction:
    • Wait for a correction around 10:10 AM in the market cycle.
    • Enter at a discounted price when the underlying asset is low.

Trading Process

  1. Select Options: Based on the stock selected.
  2. Market Correction: Wait for the price decline aligning with the first candle low.
  3. Enter Trade: Minimal stop-loss, confident entry.
  4. Monitor Momentum: Expect increased trading activity and liquidity.

Profit Potential

  • Example: PI Industries and Bajaj Finance showed substantial profits.
  • Entry Strategy: Focus on stocks appearing on screener early in the morning.

Risk Management

  • Stop-Loss: Implement to protect investments and manage risk.
  • Market Timing: Effort-intensive tracking of underlying prices is necessary.

Conclusion

  • Strategy Benefits:
    • Mathematical backing provides confidence in market entry.
    • Structured approach to option selection and timing.

Tools and Resources

  • Indicators Provided:
    • 66.66 and 26.66 indicators.
    • Pi indicator.
    • Modified Keltner Channel.

Observations

  • Market Timing: Based on GAN Square of 9 sequence, key periods for market turns.
  • Candle Patterns: Emphasizes not being disturbed by candle formations, ride the momentum.

Next Steps

  • Further Learning: Look out for upcoming videos with practical examples on charts.
  • Feedback: Comments and questions encouraged.

Additional Resources

  • Previous Videos: Link to the multibagger stock selection video based on square root calculation.

Note: This session provides a foundational understanding of stock selection and options trading strategies focusing on mathematical principles for confident trading decisions.