Day trading Methods - Bollinger Bands, Flags, Volume Profile

Though there are many day trading methods,  Respect every method, Respect every profitable trader and their trading style. Fundamental traders will say technicals are bullshit and vice versa. They are both profitable method and people are using them for decades.

Absorb everything, paper trade and then combine them to a maximum extent. Here is an analysis of Live Trade of Titan May Futures

Here is a repetition of Titan future trade in ICICI which happened that same day; by repetition, I mean similar structure. We were discussing this live so I will just put it down from the archive –

It’s consolidating which means the probability of profit is low here. But let’s enter here with 301.45 as stop loss.

Bank of India’s time frame is 30M. It’s more volatile than ICICI. The more the volatility the more the standard deviation; the higher the timeframe.

These are different kinds of trade setups –

1. If you use volume profile, you need to forget technicals.
2. If you trade with Bollinger’s you need to forget flag setup. It will be part of riding the band concept.
3. And then if you do the flag, you need to forget Bollinger.

If you do all ~ that means there is a high chance you end up as the jack of all trades, master of none. Let me example ICICI with flags as well?

A flag is time frame independent. You need to forget Bollinger’s here.

You can see how the super trend line is made too under the flag spread. If you see volume profile you can look most of the volumes at this time frame is made up in this spread.

So when it breaks the spread it will be a spike as few will close their position. That’s how a flag is explained with volume profile.

Now, wait for the crack. But what is the reason I am betting on that it can crack? You can explain in many ways. You can explain using volume profile, Bollinger’s as well as flag setup. Whatever you want. Everything is right.

That’s why they are called indicators. A direction is always identifiable if you club this with other indicators and time frames and theories. The more stuff converges to your idea the more the probability of profit.

It cracked.

Let’s combine Stoch Indicator this time. Our timeframe is 1 minute on this flag setup. Stoch (14) lines overlapped each other. So I exited.

Or, We hold because

We changed the time frame to a bigger one as our stop hit on the lower timeframe.

Let’s say 5 mins here. You can again explain with many theories.

Theory 1: Swing Low (Price Action)

That red line if crossed will create massive panic. Theory 1 is a result of what.

Theory 2: Volume Profile

You know it will breakdown if it crosses that section. I have taken another huge session. Don’t ask me why. Theory 2 is a result of why.

Theory 3: Flag Setup

Consider the flag setup of 5 mins. If you have read my “assumptions” of flag break out from Unofficed and their relation with Fibonacci you know why I bet on the downside. Refer – Intraday Strategy: Bull Flag Trading Strategy

Theory 4: Bollingers

Let’s not forget our initial discussion of Bollingers. It just touched the median Bollinger. It had crossed the median Bollinger with full confidence.

That’s why 3BB setup does. Hence I conclude my live trade. It is at 299 when I exited.

Or, We hold because

Why not utilize the trailing stop loss? The best approach is putting a trailing Stop loss.

So anyways we are not in loss. The reason for keeping this trade on –

1. Stoch has not touched with each other yet.
2. The supertrend line is near.

No Risk, No gain. So whenever you are putting a trailing stop loss; though it seems like you’re losing from the profit the thing is it is the loss. You may want to hence consider as a different trade. People tend to take more risk with slight green which is not OK.

Now let’s shift the stop loss. Now another candle is formed. Our stop loss has shifted to the top of the second last candle or the last confirmed candle.

Top = High

It’s 299.3. You need to keep moving your stop loss. However, we shall close on 15:29 regardless of wherever it is. Day traders day trade. They don’t BTST, STBT.

They also don’t MIS. They use pure NRML. Brokers will block your trade post 15:20 (for Zerodha, per se). That’s why they do NRML.

Here is the stop loss reasoning from chart –

But it is time to check the other theories too –

Now look, it is making a bear flag in the setup. You need to remove Bollinger’s to see and imagine flags properly.

Now we need to shift the trailing stop loss again.

Our trailing Stop loss is again changed as a new candle is formed. However, the Stoch is going to touch each other. So if you follow the Bollinger setup, we need to close on the moment stock does touch each other.

15:29 is approaching. It’s closed on 298.35.

This trade setup can not be coded. This setup needs your mind which is a machine learner. Because our mind oversees over tons of setups simultaneously. Nothing can beat that.

So in short –

This is done using BO orders on 30K quant with this kind of reasoning. You may already know I was trying hard to make money with 30K quant.

And here goes the order book –