TLDR;
Alright, so this video is all about swing trading, explained by expert Ankur Patel. He talks about his journey, core concepts, and specific strategies like range contraction and expansion. Plus, he shares tips for working professionals, position sizing, risk management, and how to exit trades. Key takeaways include focusing on momentum, using tight stop losses, and understanding market psychology.
- Swing trading strategies for working professionals
- Importance of range contraction and expansion
- Risk management and position sizing techniques
Introduction & Guest Background [0:00]
Shashank introduces Ankur Patel, an expert in swing trading and author of "Swing Trading Simplified." The video aims to provide viewers with actionable strategies for swing trading, focusing on concepts applicable to working professionals. Shashank also gives a shout-out to Groww for sponsoring the channel. Ankur mentions his initial foray into the stock market, driven by observing price movements and a desire to make quick money. He shares how his wife pushed him to learn trading properly after seeing him waste time and money.
How Ankur Started Swing Trading [3:00]
Ankur narrates his early days in the stock market, starting in late 2016 when resources were scarce. He recounts his initial trades based on observing stock movements, like Suzlon, without understanding market fundamentals. He also shares a story about averaging Nifty options, which led to losses and his wife's advice to learn properly. Ankur explains his preference for technical analysis over fundamental analysis, finding it simpler and more direct.
Core Swing Trading Concepts [7:00]
Ankur explains the core concept of range contraction followed by expansion. He uses examples like BSE (up 400%) and Cochin Shipyard (up 800%) to illustrate how stocks build momentum within a range before breaking out. He emphasizes catching these momentum moves with small stop losses. Ankur highlights that most stocks remain sideways, and the goal is to identify and capitalize on the 20% that make significant moves.
Range Contraction & Expansion Strategy [12:00]
Ankur elaborates on the range contraction and expansion strategy, explaining that after an expansion, the stock will contract again. He aims to buy stocks as they emerge from this base, ideally on the first move. He uses a low stop loss (around 2.5%) to manage risk. Ankur also points out that many traders make the mistake of thinking a stock's journey is over after the first expansion, but it often consolidates and offers another buying opportunity.
Live Chart Examples [20:00]
Ankur shows a daily candle chart, explaining that his system is built on daily candles. He looks for stocks trading around the 10 and 20 EMA (Exponential Moving Average). He waits for a stock to come out of a base with increasing volume and then buys above a specific candle, often using GTT (Good Till Triggered) orders. He also shares that in a good market, he might have three to four open trades, while in a bad market, he reduces it to one or two.
EP - Episodic Pivot Explained [26:00]
Ankur introduces the concept of Episodic Pivot (EP), where a sudden event or news changes a stock's story. This strategy involves identifying neglected stocks that have been sideways for a long time and reacting to news. He emphasizes checking the stock's reaction to the news rather than the fundamentals. Ankur credits Pradeep Bani and Frank Kabir for the EP concept.
News Reaction & Market Psychology [35:00]
Ankur explains that the key to EP is the surprise element. He looks for stocks that are under-owned and have a strong reaction to news, especially earnings. He mentions that the Indian market provides opportunities every quarter due to earnings releases. Ankur also clarifies what is not an EP, such as stocks already trending before the news or those with no volume after a gap-up.
Case Studies & Real Trade Examples [42:00]
Ankur shares case studies, including examples like HBL Power after the Kavach Scheme announcement, NACL Industries after Murgappan Group's acquisition, and Tata Motors due to JLR's profitability. He also discusses Reliance Power, where he traded without knowing the fundamentals but capitalized on the stock's reaction to news. He also shares a failed trade example with FCL, emphasizing the importance of stop losses.
Position Sizing & Risk Management [50:00]
Ankur stresses the importance of position sizing, especially for beginners. He suggests starting with 10% of capital per trade and gradually increasing it as skills improve. He also advises against over-diversification. Ankur reiterates that his win rate is around 40-50%, and it's crucial to manage risk effectively.
Selling Strategies & Trade Exits [57:00]
Ankur discusses two selling strategies: selling into strength and selling into weakness. Selling into strength involves selling when the stock is showing momentum, while selling into weakness involves exiting when the stock closes below the 10 or 20 EMA. He advises trailing stop losses to protect profits. Ankur emphasizes the importance of knowing your maximum loss before entering a trade.
Final Tips for Working Professionals [1:05:00]
Ankur summarizes the key points, emphasizing the core of his system: range expansion and contraction. He recommends using the delayed EP strategy for working professionals, as it requires less screen time. He also advises viewers to backtest his strategies and understand them thoroughly. Ankur provides links to his YouTube channel and other resources for further learning.