Interpretation of Trading Calls

[ganapathi]

Hi,

I am new trader. I understood stop loss concept with respect to either buy/sell as first step and then using stop loss order to decrease the loss.

I was trying to use your concept for below example but got confused

BUY ABOVE 352.00 WITH SL @ 351.00 TARGET 353.50 / 354.50

As a beginner, my question is why will I buy above 352 which is high ? Keep the SL @ 320 or less so I can buy at low cost?

Could you explain this concept of SL with the above example?

Similarly this one:

SHORT@OR BELOW 289 SL 292 TRG 288, 286,282

Thanks in Advance.

 

[Alchemist]

BUY ABOVE 352.00 WITH SL @ 351.00 TARGET 353.50 / 354.50

The call is given in such a manner because the analyst thinks that 352 is an important resistance level.

Only if this resistance level (352) is crossed, the stock should be bought. Once the stock is bought above 352, the stop-loss should be 351.

Similarly in ""sell below" call, the "sell below" level is an important support. The analyst suggests that only if this support is broken, the stock should be shorted. Once the stock is shorted below 289, the stop-loss should be 292.

 

[ganapathi]

Thanks Alchemist. I learned a lot from you.

Is there any consolidation of your posts on this forum. So I can learn fast.

Only if this resistance level (352) is crossed, the stock should be bought. Once the stock is bought above 352, the stop-loss should be 351.

So are there two transactions in this? Buy and sell? is this intraday?

Kindly give example of how to place a stop loss sell order in the above example (stop loss 351).

Is it ok to ask other forms I have doubts in this same thread?

Warm regards.

 

[Alchemist]

So are there two transactions in this? Buy and sell? is this intraday?

Kindly give example of how to place a stop loss sell order in the above example (stop loss 351).

Is it ok to ask other forms I have doubts in this same thread?

Warm regards.

Yes, there would be two transactions in this case - first buy transaction (when stock goes above 352) and second sell transaction (when the stop-loss is hit or the target is reached).

The stop-loss order will be something like this:

Trigger price: 350.90
Sell price: 350.50

If the stock falls below 351 and touches 350.90, a sell order at 350.50 will be placed in the order book.

You can ask any number of questions in this thread as long as they are related to the original topic of discussion.

If you have unrelated questions, please make a new thread in the appropriate section.

 

[ganapathi]

Yes, there would be two transactions in this case - first buy transaction (when stock goes above 352) and second sell transaction (when the stop-loss is hit or the target is reached).

The stop-loss order will be something like this:

Trigger price: 350.90
Sell price: 350.50

If the stock falls below 351 and touches 350.90, a sell order at 350.50 will be placed in the order book.

The above sell order you placed will definitely stop my loss further.

Can I place one more order on the same stock which might bring me profit? Assume stock price would go to 354.

Then below sell order will bring profit.

Trigger price: 354
Sell price: 353.50

Cannot we combine both the above orders in one order like this?
Sell order:
Trigger price: 354
Sell price: 350.50

Here is another form which came to my notice:

Buy MCLEODRUSS (Dec Futs) @ 369.4-367.4 SL 362.7 CL BASIS TGT 378-384-392 (Positional)
carrying one lot wit sl 952(cash).

what is Dec Futs, closing basis and cash in 952 (cash) mean?

 

[Alchemist]

Can I place one more order on the same stock which might bring me profit? Assume stock price would go to 354.

Then below sell order will bring profit.

Trigger price: 354
Sell price: 353.50

Cannot we combine both the above orders in one order like this?
Sell order:
Trigger price: 354
Sell price: 350.50

When you place a sell order with a trigger, the sell order is released into the regular order book as soon as LTP is less than or equal to the trigger price.

If you place such an order when the LTP is 352,

Trigger price: 354
Sell price: 353.50

the order will be released immediately (because LTP is less than trigger price) and later if the price touches 353.50, the stock will be sold.

The trigger price will have no meaning. The above order will be as good as placing a simple sell order at 353.50.

Same will happen with your other order:

Trigger price: 354
Sell price: 350.50

As the trigger price is more than the LTP, the order will be released immediately and get executed.

For stop-loss sell order, the trigger price should be less than the LTP. Otherwise, the order will be released immediately.

Buy MCLEODRUSS (Dec Futs) @ 369.4-367.4 SL 362.7 CL BASIS TGT 378-384-392 (Positional).

Carrying one lot with stop-loss 952 (cash).

What is Dec Futs, closing basis and cash in 952 (cash) mean?

"Closing basis" means the closing price. The position should be closed only if the closing price is below 362.7.

In the second call, the analyst has given a cash market stop-loss. As per this call, the trader may have a position in futures market, but he should look at the cash market price for applying the stop-loss. If the cash market price goes below 952, he should close his futures position.

 

[ganapathi]

Oh Alchemist, I got so confused .

Let's see how you will place order for this so I can learn straight away.

CMP 378.40 Buy @ 370-378 SL --352 Target 388-398-406+

Assume You have bought at 372.

What is your strategy for this? How will you place orders?

Sorry. I just got confused.

A quick question : I have bought a share. Can I place two sell orders on the same share?

Regards.

 

[Alchemist]

Let's see how you will place order for this so I can learn straight away.

CMP 378.40 Buy @ 370-378 SL --352 Target 388-398-406+

Assume You have bought at 372.

I will place a simple sell order at 388 (no trigger price).

A second stop-loss order at 351 with trigger 351.90.

If one of the orders is filled, I will cancel the other.

A quick question : I have bought a share. Can I place two sell orders on the same share?

It depends on your broker.

Exchanges have no restrictions on how many orders a client can place.

Some brokers don't allow day trading in certain stocks.

If you have bought such a stock, the second order will be considered a day trading order (short selling order) and hence will be rejected by the broker's system.

 

[ganapathi]

I will place a simple sell order at 388 (no trigger price).

A second stop-loss order at 351 with trigger 351.90.

If one of the orders is filled, I will cancel the other.

I think placing two orders like above assumes you have margin for both. Am I right? If yes, then it's not possible for time being.

I think we have to keep adjusting the stop loss. I hope this is what they call trailing stop-loss.

One quick question:

I have equity shares delivered to me on T+3 day. On T+3 day I sold it at high price. Suddenly the stock reached very low price. I will now convert the position to intraday and buy it again. Thus, I have done shorting in day trading. Is it ok to do so?

I heard doing this is wrong. But I don't know why? Could you explain me to this.

Many thanks for your laser pointed answers.

 

[Alchemist]

Thus, I have done shorting in day trading. Is it ok to do so?

I heard doing this is wrong. But I don't know why? Could you explain me to this.

You can do that for sure.

There is nothing wrong in buying back the shares that you sold earlier in the day.