We see in the chart of ASHOKLEY –
We observe that it was in the sideways trend for some time ( i.e between the black lines). This sideways trend was broken with a higher high and the uptrend continued and is shown by the red lines.
But the uptrend was broken at the black line when the swing low was broken which is at the black line. After that continues two lower tops were formed. But as we can see the blue lines the lower top was again broken and the sideways trend continued for some time.
Then this sideways trend was again broken when the swing low was broken at the black line and it was in downtrend again as a lower top was formed.
So here was our first Trade –
As we can see the black line was a crucial area of support. if the black line is broken it will continue its downtrend otherwise if it makes a swing low at this line or above this line we can consider this line as the support line.
Now as we know it is in the downtrend but we cannot enter this trade as our stop-loss is to be at the swing high which is quite far and our risk: reward ratio would not be good so we would wait for the reversal that is we wait for the formation of a green candle.
As we can see the green candle was formed so we took an aggressive entry at the current level and stop-loss at the small black line which is the low of previous day candle low.
The next day a very long green candle was formed. So we update our trailing stop-loss to the bottom of the previous day candle.
After the big green candle, another green candle was formed which broke the previous high ending the downtrend.
This time we update the trailing stop-loss to the previous swing high i.e. the black line.
As we can see our stop-loss was hit at the black line.
We had entered at 82 and exited at 86.2 thus making 4 points which is equal to Rs29050.
For further references – Ashok Leyland Swing Trade 1