Price action reigns supreme for the smart traders. In fact, Price is the absolute indicator. When Price is showing an uptrend, never go against the trend and fight the market by taking a short trade. Likewise, when price shows a downtrend, never take a long trade.
While fundamental analysis focuses on the cause, the system helps us in analyzing the effects of the cause. Therefore , a trend more often than not, indicates strong buying or selling based on fundamentals. We track the trend and capture the big moves. Trading with the trend is wiser than trading against the trend.
Our stock selection process is without fear or favour. It is unwise to opt for a stock which is not trending as trend is the absolute indicator without which we will not proceed any further.
Volume is the next most important consideration after price action.
The law of supply and demand determines the price of almost everything in your daily life. This basic principle of supply and demand also applies to the stock market, where it is more important than all the analyst opinions.
The best way to measure a stock’s supply and demand is by watching its daily trading volume.
We use our built-in features like ‘Volume Index’ & ‘Accumulative Volumes’ to identify genuine trend breakouts & precisely define entry and exit levels.
While its is important to know what is desirous, it is equally important to know what should be avoided in order to arrive at a proper analytical judgment.
Volatility is one such factor which is an absolute ‘no-no’ when it comes to selection of stocks.
Stocks oscillate while on their way up and down, creating new trends and ranges. Each stock has its unique range and pattern.
‘Volatility Factor’, once again a unique feature of our system tracks the movement of any stock for a given period of time and generates a rating which decides whether the stock is safe to invest or not.
Capital & Risk Management
An investor should set firm rules in limiting losses.
One must sell without hesitation - no waiting a few days to see what happen or hoping the stock rallies back; no need to wait for the day’s market close.
The reason for this is very simple. Mathematically it has been proven that it is lot easier to recover a loss of this amount (8%) when compared to greater losses.
This coupled with the fact that you have a minimum of 4-5 positions further reduces the probability of the perceived loss on the entire capital, thereby stacking the odds in our favour.
This is essential to the mental makeup of a NexT System Trader. This is where we move from the majority of people who lose heavily in the market to the selected few who walk away with huge profits and minor losses.
Cutting Losses Is Like Buying an Insurance Policy.
This policy of limiting losses is similar to paying insurance premiums. We’re reducing our risk to precisely the level we comfortable with.
Limited Losses Enable Infinite Gains
Following these rules for trading will allow profits to run its complete course and losses to be limited.
Seal your financial downside and the upside will take care of itself.
As a rule we do not set targets. We simply put our stop loss, seal the downside and allow the market to take care of the upside. The best and only way to ensure huge profits is not to set targets, instead just protect our profits with trailing stop losses either provided by the system or using Capital & Risk Management principles.
Identify Stocks in Trend using Price, Volume & Volatility.
Calculate risk on chart and capital risk per scrip.
Track entry and exit levels.
Objective analysis ensures zero personal involvement.
Stocks identified by our system invariably have good fundamentals.
Focus on Risk : Reward ratio, Probability of winning & capital management ensures safety in trading.
Unique exit signal ensures user never gets trapped in market crashes.