Positional Trading Strategy using 52 Week High & Low

Positional Trading – Basics:

Positional trading is that trading style, where you are ready to carry positions as long as the trade demands for one or more days, weeks or months. The time frame is your choice for positional trading.

• A short term positional trader may carry positions for just a few days.
• A long term positional trader may carry positions for days, weeks or months.

Then, what’s the difference between positional and intraday trading?

The trading method that you use could be the same. What changes is the working capital and the risk capacity. These are generally much higher.

Thus for a basic positional trade you probably will need 50% or more working capital as margin to carry futures contracts overnight – check with your broker on specifics. That’s the first major difference.

As the positional trading ranges are much larger than the daily ranges, the stop loss risks can (though not necessarily always) higher than intraday risks. While you may use 15-20 point stop loss limits for Futures in intraday trades, you will use a stop loss of 15-50 points in short term positional trading and 40-150 or more points stop loss levels in long term positional trades.

As you can see, that the risk increases from that of intraday trades, but not necessarily above your affordability, as the risk remains unchanged during any trade, and you don’t multiply it because of additional trades as in intraday trades, as positional trades run for longer periods typically. So while you may have 15 trades in intraday trading in a week, you may have just 2-5 short term positional trades in the same period. Based on the stop loss levels, you can see, that the overall risk tolerance is probably the same and may even be lower in positional trades as compared to intraday trades. Positional trades may require lower risk tolerance as compared to intraday trades.

However, there is one major risk that gets introduced. That’s of gap up and gap down openings every day. That may seem significant and may upset the equation significantly. Well, the answer is no. Because gaps tend to follow the underlying trend about 70% of the time.

We have a simple but powerful Positional Trading Strategy for you using 52 Week High & Low data.

52 Week High Strategy For Positional Trading:

1. Find the scripts which hit 52 Week High today
2. Filter the ones which closed 1% below the 52 Week High (Fallen after making new 52 Week High)
3. These stocks are good positional shorts
4. Entry – Next day opening price (or) Enter when the stock reach back to 52 Week High
5. SL – 1% from previous day’s High
6. Target – 3-5% from entry, book as per comfort, 
7. Close the position if Target or SL is not reached even after 8 trading days

52 Week Low Strategy For Positional Trading:

1. Find the scripts which hit 52 Week Low today
2. Filter the ones which closed 1% above the 52 Week Low (Bounced after making new 52 Week Low)
3. These stocks are good positional longs
4. Entry – Next day opening price (or) Enter when the stock reach back to 52 Week Low
5. SL – 1% from previous day’s Low
6. Target – 3-5% from entry, book as per comfort, 
7. Close the position if Target or SL is not reached even after 8 trading days

Steps – Needs to be done everyday evening:

1) Go to NSE India site: Link: https://www.nseindia.com/live_market/dynaContent/live_watch/equities_stock_watch.htm
2) Select “FNO Stocks” from the dropdown & Download the data
3) Download the filtering tool from the link and copy the downloaded data to the tool.
Link: https://drive.google.com/open?id=1S0Ms5g1I-yKmp3t4I66p_ceyogLuQi-S

Updated link – contains separate sheets for 52 Week High & Low:
https://drive.google.com/open?id=1iMEMmBPDN0Rfvr8pHu_aw6LWgViS-Ujq

4) That’s all, You are set for tomorrow with the list of stocks for both Shorts/Longs positionally.!

Happy with the set-up? Need help in building an End-to-End Trading set-up? Then, Contact us https://t.me/MarketSecretsTeam through telegram or Email us at admin@marketsecrets.in