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  • Writer's pictureraytraceventures

Max India on July 06, 2023 | Profit of Rs. 22,000

Updated: Jul 21, 2023

After our first losing trade in Max India on July 04, it gave us another opportunity on July 06. You can read about the losing trader here: A new trade was initiated based on the below rationale: 1. The price started to break the 16 days consolidation with higher volume of 350k higher than previous 10-15 days.

2. The consolidation has been very orderly, in a tight range, with no major sell off.

1000 quantities were bought at an average price of 129.8.

Risk Management

A risk of 2.5% was defined for the capital deployed which makes the stop loss at 126. Conclusion The next day price moved in our favor, giving us <9% return in one day as the price closed with strength near its high. The trade was further held for the next day with the expectation to get sharp momentum on the bullish side. On the next day the price further burst with the momentum, rising +10%. The trade was closed at an average price of 151.95 as it started facing some resistance at 154-155 level as seen in the 5 min. timeframe. It was a good trade, we quickly achieved our target. As per risk to reward we were expecting 1:4 but in quick momentum we achieved 1:6.7 which gave us 17% ROI on the capital deployed, generating a profit of Rs. 22,000.

Learnings Here I traded the consolidation breakout which is a continuation pattern, often called as flag pattern. The noticeable thing here is the price consolidation which was in a tight range, with no major sell off days in between and the volume was very less on the days when it closed in red. These 3 factors define the quality of consolidation set up.

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