HOW TO SELECT STOCKS FOR INTRADAY TRADING
Welcome back to another video of The Alpha Trader. So, first of all for my English viewers, There will be subtitles available on this video, And if they are not available by the time you are watching this video, Be assured that they will be available after 24 hours. Let's get started with the video. So, coming back on Hindi again. So, let's start. As this was very much requested video that make video on stock selection, So alright, let's do it.
Although, I have done a video on stock selection long ago But now I have added more principles to my stock selection methods, So let's talk about it. Watch the video comfortably as it will be a long video, Because I will be telling that in details, not just randomly strategies. So watch carefully. Let's start.
So, if you have seen my first video So most of the things will be similar in it. That you will need a permanent watchlist, Now, back in the early days when I uploaded my first video, Then my permanent watchlist was that I use to trade in stocks lower than 300. Now my permanent watchlist is included of all the FNO stocks.
So here if you see, there is FNO written in my watchlist. I have listed down all the FNO stocks of Nifty, And hence created my permanent watchlist. So now whenever I want to trade, what I do is That, I go through all the stocks from permanent watchlist of FNO segment manually without using any scanner. I go though them manually & then I select my stocks.
So first criteria is that you should be having a permanent watchlist. In this case/in my case, I track all the FNO stocks. Okay. So now in it, Now we need to see 3 criterias for stock selection. Alright? Most important criteria will be clean chart, That your chart should be clean. Now, what do I mean by clean chart? From clean chart, what I mean is that Now if you see, If the price rises again from here then is the chart clean here? No, not clean because here resistance can appear at multiple points. So, if you want to trade successfully, smoothly & stress free in intraday then remember a thing, That you have to use clean charts, why? Because, consider if I buy here Then maybe the stock hits resistance multiple times Due to which price will take pull backs again & again hence many a times its possible that our move fails.
But if, consider it breaks out here & from this resistance Then is there a clean chart above it or not? Absolutely there is clean chart. So is there any resistance to stop me? Possibly, I mean visibly there aren't any. Agreed? So when it breaks out from here then there is high chance that my trade smoothly will provide me a great move.
Due to which, I will get a good profit & good risk reward as well. So this is what I meant by clean chart. Now, for example if you see this support region, So, if this support region breaks down then till here I can't see any support. So this means that if this stock moves down from here then it's a clean chart for me. And here I will consider this as my area to trade if I want to short this stock. But will I trade in this area? No I won't because I don't have clean chart.
Now this strategy of mine for stock selection carry advantages and disadvantages as well. So, first I will talk about advantages. Advantage is that if you will use this stock selection method then your trades will go smoothly with much high accuracy. Because most of the time the stock selected by you will give move for sure. If you have been watching our market analysis videos for a long time, Then whatever the stocks I have given, almost all of them hit profit targets.
But, now you must have seen that recently that I had turned down to provide stocks for market analysis, What's it's reason? It's the disadvantage if this strategy which is That when market is in correction or consolidation phase, Then my this stock selection strategy isn't that much efficient and not provide that much opportunities. So what's it's advantage is, That whenever you get opportunity & any stock fits in your stock selection strategy, Then there are very high chance that the trade will go in your favor very smoothly. But disadvantage is that whenever market will be in correction phase, you will be getting very less opportunities. And sometimes it can happen that you won't get opportunities at all. So this is a reason that I wasn't telling any stocks in my market analysis, Because none of the stocks were fitting to my strategy & criteria right now.
So these were the advantages & disadvantages and now we will come back to or FNO list. Now, I will select stock in front of you as I told you the first criteria which is That clean chart should be there. Second criteria is that price action should be clean. Price action should clearly indicate us that where the price can go from here, As you might know how it reads if you know about it. And now I will apply it practically then you will understand what I am talking about.
Second is price action should verify the view and confirm it as well. Third criteria is volume expansion should be visible, volume activity should be in our favor. These three criteria are there for my stock selection. After that, I have some thought process that I think about intraday so I will explain you that as well.
Don't worry, I will be giving complete knowledge. So, now let's start the stock selection process. This video will be posted on Saturday, so maybe you can use this stock selection for Monday as well. Now, one more very important thing as people ask what to do if gap up or gap down opens? Now consider any stock or this stock of Aarti Industries will rise and go up from here, That if it gives break out then I will buy but if it opens here then what I will do? I can do two things, one is that I ignore it completely & second thing that I will wait for it to come down.
And then if here are bullishness is visible then it will go up. But, does it suits my style? No it don't as my style is of breakout trading in intraday. So I won't trade pull backs and stick strictly to my style & my method. And now we will finally start stock selection. Now Aarti Industries, what you just need to do is you have to start from daily chart/time frame.
And in daily time frame itself you will get to know whether the chart is clean or not. So from this your selection process will get very easy & smooth. So, now I am looking at daily charts of Aarti industries & is it a clean chart? No, hence I will reject it.
Adani Enterprises, is it a clean chart? Not at all, so rejected. Rejected. Is this a clean chart? No, rejected.
Is this a clean chart? No, rejected. Rejected. Rejected, not a clean chart.
Now look in Ashok Leyland, there is clean chart but we need to wait a bit. Now, above 150 it's (Ashok Leyland) looking interesting to me. Okay. Now here if you can see a clean chart on daily chart then what can you do is, You can go to small time frame and see what happening in it. Now, if I go to hourly time frame then I can see very good price action.
Here I can see that bullish move came up there with volume expansion, After that market went in correction phase for a bit & then volume dipped. This means that big players are interested in taking the prices higher. If you haven't seen my volume analysis video then watch it first then complete this one, Because volume analysis is very important in my selection methods.
And here it's visible to me that here is a resistance & the level of 150 can act as phycological resistance as well, To made this resistance zone. Now through a little zoom out I will verify that are there any historical resistance, Now I can see in weekly time frame that here as well market have take a resistance around 150 few times. So now if price climbed above 150, then from here price has fallen down twice which is 152. So 152 is visible to me as a resistance so I will make 152 as my first target, And I will make 155 as my second target for Monday. Okay? Now looking at old historical charts, I have set my targets as well.
So my target in Ashok Leyland is 152 as my first target & it stock climbs above it then 155 is my target. Now, this stock maybe won't rise on Monday & Tuesday either, Instead maybe rises on Wednesday or Thursday, But now this stock will be in my watchlist, because it suits my criteria, And gives break out then we will get very good trading opportunity. So like this we select stocks, and this is one of our stocks. Asian Paints - not a clean chart, rejected.
Rejected. Rejected. Rejected. Now this is my style so it is not necessary for you that you have to trade from my style only, It's upon you, as many people ask me how I select my stocks so I am just sharing my trading style. I am just sharing my stock selection process, it's on you that you want to choose & trade according to this or not. Because this criteria has worked very good for me and it's not necessary that it will work good for you as well.
As every trader is different. Now look here, a clean chart is visible to me in Chola Finance. So I will look into hourly time frame what's happening here & what I can understand here is That here is a resistance zone so by stretching it and having a look at it then it's visible that till 635 there is a little resistance. Now here if we talk about volume, a huge red candle appeared with volume expansion, But here if you notice that even earnings were made in it hence I will not focus much on it because the volume appeared here was due to earnings. So, I will ignore that.
Now, according to price action as price action look bullish to me because there is a long wick, And when price came down majority of recovery was done as well. So there is very high chance that if Chola Finance rises above 635 then can witness a good up move. Now, if any stock is at all time high then how to decide it's target? So it's simple as I have already told you this method many a times That if any stock is at all time high then how you have to decide it's target, Look at the stock's daily average moment that how much the stock moves daily and according to which you can keep a target. If you want, you can also use pivot points and according to them or on the you can take targets as well. But personally I don't use them much. I use this only.
Now if you will look here, then this day it moved 27 points, This day 18 points, This day 14 point, So basically look for the move of last week and get it's average. And looking to the moves of only these 3 days, I think if Chola finance gives move then it will give move of 20 Rs in a day. So what I will do on 635 as I know that on an average this stock gives a move of 20 Rs, So I will fix my first target above 635 as 645 of 10 rs, So in case, if we got move less than the average still I will book my first target.
And my second target will be of 655 as if the we got average move then this target will be hit. So you might have understood that how to keep targets. Okay. Now, Coal India - not a good stock as per my criteria because here we don't have clean chart. After that, CON-COR not a clean chart. Not a clean chart. Now look, Bank of Baroda is a clean chart so now what we will do, Will go to weekly time frame & observe, now look Is there a clean chart in weekly time frame? No, why? Because here is a resistance & if I do it long here and buy here, Then there is a high chance that due to this resistance the price will reverse back from here.
So you also need to look that in weekly time frame or on old harts is it a clean chart or not. So here it seems clean chart in daily but when we go & look to weekly Then we get to know that there is a old resistance which can give a resistance and can give a pull back below it, So, I will reject Bank of Baroda. Canara Bank looks clean chart in daily, but is it clean chart in weekly? If it moves above 235 then can give a small move but even after 235 it can reach maximum upto 240-245. Personally, I will reject this as I am not liking it's chart. Not a clean chart.
Not a clean chart. Now look, this is also not a clean chart. Divis Laboratorie is a good clean chart if we see on daily time frame, And if we see on weekly then it's on a all time high which is a good thing. Then, here clean chart is visible to us so will see on hourly then we get to understand that if it rises above 5,400 then Divis Laboratorie can give a good move, Here this is much is visible that this resistance zone and if it rises above 5,400 then we can get to see a good target. And how to decide target you might have understood that till now. Federal Bank, not a clean chart.
Not a clean chart. Not a clean chart. (x4) Hmm, Okay. Grasim is a clean chart, actually Grasim's analysis was shared on my discord some days ago but it didn't play out. Grasim, if you want daily analysis & daily stock selection then you can join my discord & keep in mind I don't have any telegram channel. Earlier I was having one, but then I deleted it and all the channels on my name are there on telegram, all are fake.
So please be careful, and people asking to connect on WhatsApp in comments don't focus on them as well. I will never ask you guys to WhatsApp me, And I will never do trading for you by taking money. I am a profitable trader and I don't need capital of others for trading as I can do trading on my own. Okay.
So please don't fall for all these traps & regarding my discord, There is once in a lifetime fee of 999 for my discord's community & if you take entry by paying that then you don't need to do any payment again & you have lifetime access. I kept this fee only to separate serious traders from time pass ones, Because those who are serious they won't think before spending 1000 Rs if they are getting lifetime access. I will give all the details of discord in description, if you are interested then you can join it. Okay, coming back to the point. Now look, Hero Moto Corp - not a clean chart. So it might happen that some people don't like my criteria of stock selection, But it's completely fine as it's my style.
So as a trader you should respect everyone's trading style. This is only my intraday style in case of stock selection. In swing trading, I do pull back trading instead of break out trading.
Now look this is a interesting point, be careful. Now here is clean chart, agreed? But still I will reject this stock, why so? Because in this already a big move has taken place and if now I buy here then there is a high chance that this break out fails. Now, is there pull back pending or not? Obviously it is. It have clean chart and good volume as well but still I will reject it only due to the reason that a move has taken place already. So keep in mind, that if clean chart is visible, volume & everything else is good but already move has taken place in it then you have to reject it.
Because look here, move has taken place agreed? If now I buy it here then I will be getting only a small move because already a pull back is pending in it. And there is a very high chance that on Monday it will take a pull back towards down side so we will reject it as well. It's good that came out now, it's very important point so keep in mind.
Now, Manappuram Finance looks clean on daily, clean on weekly as well. Very nice. We will go back to daily, now in daily a problem arises that here resistance a bit away. Now you can do two things - either you can do preparation for breaking of 220 or 218, Or you can buy it on break out of 211, can book you profit till 211-215.
Now look, if we see price action then here is a very beautiful inverse head & shoulder pattern. Break out level of 211 & when you zoom out then it's visible that there is resistance at 214-215, So you can do a thing that here you can sell it but it will be a very small target according to me, So personally what I will do is, I will wait for it's complete break out which is at 218 but this is just an example that you can do this as well. Okay, so there's nothing special in this. I's not a clean chart. This too isn't a clean chart. Not a clean chart.
Mphasis, clean chart but very far from break out so we will reject it as well. Still not any clean chart so far. So this thing only I like very much about my method that on daily time frame itself I can scan quickly manually that which stock is suiting me for the next day or not. Now look, PVR is a very good setup as if it rises above 1800 then it will give a very good target, Just calculate it's daily average movement then according to it you can decide target. Now, if I keep on setting target for every stock then video will get very lengthy so guys decide targets on your own.
I have told you about PVR. Now look, this is clean chart as well. Agreed? But in this move has taken place so we will reject this. Sun TV is clean chart as well but move has taken place so we will reject it. We need such a stock which will provide us fresh break out because in that only true move is captured.
If you will participate in such a stock which has already experienced it's break out then there's high chance that it will take pull back and your break out fails. As it's a simple thing, if you know basic price action then you might have understood that what I want to say. There are some stocks like who are in FNO but aren't in my watchlist, It's simple reason is either those stocks are very costly or their setup is something special and usually charts are very boring. So there are stocks like those as well who are in FNO but not in my watchlist, so in case you wondering then that's the behind it which I told you.
TVS Motor is clean chart, but will we buy it? No we don't it's not a clean chart. Simple. No more... So, I think that's it and I think till now you might have understood that what is my method & how I select stocks for intraday. So till now we selected two stocks, one is Ashok Leyland - above 150 we have to buy it & if break out occurs then 152 first target & 155 second target.
PVR is out second stock - above 1800 we have to buy it and target you guys decide on your own. And if you have any other query about my stock selection method, Yes, let's talk about intraday thought process. Now if this stock open here then what I will do? I will ignore this, so what will be the best situation That it opens somewhere around here & gives me break out. Now I personally do execution on a time frame of 5 minutes, So in time frame of 5 minutes, if I get a strong closing with good volume then I will enter the trade. And about stop loss, you can't decide stop loss before the trade itself, As in intraday you never know where gap will close and where will it open so I decide stop loss in live market itself. So what is the logic of setting up stop loss & all those things, if you haven't seen my risk management video then watch it for sure.
Your concept of stop loss will be cleared in it. So guys, this was my stock selection process, although principles are more over same to my old videos but still I have done polishing in the method. And due to which my accuracy has improved in stocks. If you have seen my P&L video then you might have seen that I have given very good performance in equity, Simply because of stock selection as it is a very important thing & people don't give it that much importance, But 50% of your success in intraday is determined by stock selection, So be serious about stock selection & don't take it lightly. And more you compromise on your analysis, the more your success rate will be less. So for example,
We were talking about Canara Bank if you remember. Canara Bank was having clean chart but you might have seen still I rejected it, why? Because my mindset was not convinced that I should do that trade and thee things come with experience. But, always remember that you need to be very choosy as if you compromise with you analysis then you are compromising on your profit & trading quality. Okay? So more you will be choosy that much it's good for your trading success, this is a important point as well. So guys, I hope you got something new to learn.
Thank you so much for watching the video till the end, if you liked it then definitely like the video. And if you are new to the channel then do subscribe as we are very close to 50,000 as it is about to be completed. So, I will see you in the next video. Thank you so much for watching.
2021-11-08 18:23
