Few months ago, I shared a trade recommendation with my member- Jindal Steel. Within a remarkable 14 days, we achieved an outstanding 12.5% profit. This blog will dissect the intricacies of this trade, delving into the selection process, position management, and the strategies instrumental in securing these substantial gains with the hopes it can help you become a better trader by few degrees.
The Jindal Steel Trade Setup
The Jindal Steel trade recommendation was shared with our exclusive plan members. The idea was given on June 7, 2023, as we were bullish on the metals and mining sector. The allocation was suggested to be 10-20% with a medium level of risk involved, and the planned holding period was one month. The initial target was around 20%, but we exited a bit earlier when our trailing stop-loss at 586 was triggered.
Chart Analysis
Now, let's transition to the charts to understand why we entered, how we managed the position, and why we exited. The charts revealed several critical insights that contributed to our success.
Entry Point
We initially observed the stock's price, which had fallen to the 200 EMA on the daily timeframe, where it also displayed a positive divergence on the RSI. Volume started picking up, a positive sign. As the volume histogram turned green, we felt confident in our buy call, which was executed on June 7th.
Stop-Loss Revision
When the stock broke above a previous resistance zone, we revised our stop-loss to just below the next best support level. We repeated this process as the stock continued to break higher and encountered new resistance levels.
Early Exit
We decided to exit the position a bit early as the stock had made a strong move in a short time. Our experience in swing trading taught us that such rapid movements tend to experience pullbacks. We booked our profits at 588, achieving a 12.5% gain.
Chart Patterns and Indicators
Our analysis also considered chart patterns, candlesticks, market momentum, and various indicators. Throughout the trade, we observed the stock's behavior on different timeframes, ensuring we made informed decisions.
Key Takeaways
Swing trading is all about achieving the maximum internal rate of return. To succeed, it's crucial to constantly revisit past trades and make objective analyses without getting emotionally attached to unrealized profits.
Additionally, you should understand the strategy, timeframe, and target return profile of your chosen program or analyst if you're following recommendations. Money in the market is made not just by buying stocks but by managing positions effectively.
Final Thoughts
In the world of swing trading, each trade presents valuable lessons. The Jindal Steel trade was a clear demonstration of a well-executed strategy that led to a 12.5% profit in just 14 days. By learning from these experiences, you can enhance your trading skills and make more informed decisions in the market.
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Thank you for reading.
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