5 Trading Strategies for Indian Stock Market with a Winning Rate is 85%
If you are looking to invest Or Trade in the Indian stock market, it's essential to have a solid trading strategy that maximizes your profits while minimizing your risks.
There is an infinity number of Strategies, so it is hard to choose which one actually works in the market.
In this post, we'll explore five winning trading strategies for the Indian stock market, with a winning rate of 85%.
These strategies have been tested and proven over time based on fundamental and technical analysis.
By backtesting and applying in your trading, you can increase your chances of success in the Indian stock market and make informed investment decisions. So, whether you're a Pro trader or a beginner, read more about these winning strategies and how to implement them for your investment portfolio.
For instance, while I'm writing this article, you know if you are in the market for the last 2–3 years, you must be heard about forex trading, Crypto trading, and many more terms like Track DXY before the trade, etc.
If you are a newbie then worry not first learn and trade about Indian Stock Market then explore other things.
So I just want to say that Forex Trading is Easier than Trade Indian Markets, Disclaimer This is just my own perspective and my experience Because there is no Gap up/down and liquidity problem,
So, for me to trade in forex it is easy as compared to Indian markets, this is the most profitable trading strategies.
One More Important Disclaimer is In this Article I'm not going to explain the strategy on a deep level because it is not comfortable for the audience means you and I,
So In this Article, You will only see the Introduction and Ideas Of strategy that actually works in the stock market. In the upcoming Blogs For sure ill talk about these in detail about these strategies.
So Let's Dive in
Strategy 1: Moving Average Crossover
So this strategy is very popular than any strategy, Almost everyone at least they use a moving average to filter the stocks.
That's why moving averages are one of the most widely used technical indicators in the stock market.
This strategy involves using two moving averages, one short-term and one long-term, to identify trends in the market. When the short-term moving average crosses above the long-term moving average, it indicates a bullish trend, and when it crosses below, it indicates a bearish trend.
The two most commonly used moving averages in this strategy are the 50-day moving average and the 200-day moving average.
We Use EMA (Exponential Moving Average), This is best and smoother than MA.
When a small-time period MA crosses the Long term MA, It gives a Bullish Signal and Vice Versa.
You can trade on this Strategy after the Backtest and forward testing.
FAQs : Which Timeframe is Good for Moving Average Crossing Strategy?
It totally depends on you or the type of trader or Investor you are because Moving Average is Something that Uses Everyone whether you are Long term Investor or Intraday Trader.
You can use Moving Average(MA) Crossover on any time frame, it works on all timeframes, but the thing is HIGHER THE TIMEFRAME HIGHER THE ACCURACY because the High Timeframe has More data as compared to the low time frame. You can use it for 5,15 min, to weekly or Monthly charts, it works everywhere.
Fig. Moving Average Crossover.
The benefit of this strategy is that it can be applied to a variety of different markets, including stocks, commodities, and currencies.
Also, I would like to clarify that there is no strategy in the world with foolproof, and traders should always do their own research and analysis before making any investment decisions.
In addition, traders should also be aware that the Moving Average Crossover strategy may not work well in several market conditions when there is a choppy market or with less volatility, which does not give a clear direction of the trend, where the market can go. As with any trading strategy, it is important to remain flexible and adapt to changing market conditions in order to achieve success.
There are various types of moving average crossover strategies, For sure I’ll discuss in detail these strategies like Golden Crossover, Death crossover, etc. In my next Article.
So this strategy is back-tested and with a win rate is 85%, but this is not something that you start trading, you must do your own back-test and then do forward testing then invest or trade.
Also Read:
Strategy 2: Relative Strength Index (RSI)
The RSI, It is a type of momentum Indicator, Its work is to show the Strength of Price. It is developed in 1978. This strategy involves using the RSI to identify oversold and overbought conditions in the market. When the RSI is below 40, it indicates an oversold condition, and when it is above 60, it indicates an overbought condition.
Here We have changed the default setting style (60,40).
We can look for Breakdown or Breakout in RSI, and it does not matter where it breaks, If there is a break of structure or range then we can BUY or SELL according to market condition.
FAQs: Which Timeframe is Best to use RSI and What is Overbought and Oversold in RSI. or Best RSI Strategy?
We can use it for Intraday with a timeframe 5min & 15min. Especially 5min. So, In a short period of time, we can buy or sell when there is a break of the range in RSI anywhere, and in Small time frames like 5 & 15 min. We have to look for momentum.
An Asset is usually considered Overbought when the RSI is 70% and Oversold when RSI is below 30%. OVERBOUGHT and OVERSOLD is a game of long-term investors. This Funda only works on a Higher timeframe, not a lower time frame.
Fig. RSI Strategy on SBIN 1DOverall, In all over the world, RSI is everyone's favored indicator and its win rate is 85%. The Relative Strength Index (RSI) is a popular and effective tool for traders looking to identify potential buy and sell signals in the market. By using the RSI to track trends and avoid false signals, traders can make more informed investment decisions and improve their chances of success.
Strategy 3: Bullish & Bearish Engulfing Patterns
This is Something that you can try when you are a beginner in the market, and the good thing is that this works very well with a very high-Risk Reward and win rate. High win rate scalping strategy. You can easily find these Candlestick patterns on the bottom or Top and you can take Reversal Trade against the trade, but this can be risky trade, So Always Confirm twice or thrice and see the win probabilities then trade.
Candlestick Pattern is Something that is the basis of Technical Analysis and Price action so if your basis is clearer than you can easily find and identify these opportunities in the daily market
Engulfing patterns are candlestick patterns that indicate a reversal in the market. A bullish engulfing pattern occurs when a small red candle is followed by a large green candle, while a bearish engulfing pattern occurs when a small green candle is followed by a large red candle. These patterns are used to identify potential entry and exit points in the market.
If you get trade, then you can check the probabilities by applying multiple indicators and by following Price Action. Because Price Action Is Everything.
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Fig. ITC 1D Breakout + Bullish Engulfing Candles
You can enter a long position if the next day a bullish candle is formed and can place SL at the low of 2nd Candle.
Strategy 4: Breakout Trading
Breakout trading is a strategy that involves buying or selling a stock when it breaks out of a key level of support or resistance. This strategy is based on the premise that when a stock breaks out of a key level, it will continue to move in that direction. This strategy requires patience and discipline, as traders must wait for the breakout to occur before entering the market. And also look for Risk, Reward, If the Risk Reward Ratio is good not then avoided the trade.
Breakout trading is something you are looking for momentum in your favor.
Breakout trading does not mean only you wait for the Horizontal level B/O, you can also trade whenever there is a break of a trend line.
Always Mark the key levels on your chart and seat with patience and wait for the price action to happen, and also do calculations and calculate risk reward.
Always look for CONSOLIDATION, We will never do Breakout trading until consolidation is there.
If Consolidation is not there, then you can wait for RETEST.
Fig. CIPLA 1D, Breakout trading.
Fig. ITC Long term Breakout
So, If You follow only Breakout trading, you can easily get a win rate of 85%.
Strategy 5: Reversal Trading
When the Price is Unable to break the Key resistance level and again starts the downward journey, It is Easiest and good to trade, This is one of my favored, I always look for the reversal trades because it is more rewarding as compared to Breakout Trading, but it is also risky because we are playing against the trends.
In Reversal Trading, You can trade with many Strategies by observing the Candlestick Pattern.
In the Reversal Trading Benefit, there is a very small STOPLOSS and the TARGET is a minimum 3x, 4x even 10x, so this is the reason why Reversal Trading is very popular.
My suggestion is you can make a profit easily if you follow only one Strategy. Pick One Strategy and Master it, Apply, and Get Rich.
Fig. Reversal Trades In CIPLA 1D
There are single, double, and multiple reversal candlestick patterns, you can follow them and beat the market.
Candlestick Pattern likes:-
HAMMER
INVERTED HAMMER
MARUBOZU
PIERCING PATTERN
ENGULFING PATTERN
MORNING STAR
EVENING STAR
TWEEZER BOTTOM/TOP
SHOOTING STAR
FAQs:
Q1. How do I know which trading strategy is right for me?
A1. The right trading strategy for you depends on your investment goals, risk tolerance, and investment time horizon. And the very important thing is depended on your Personality, Before getting rich in real, become rich Mentally, So do an Intro inspection and determine which trading strategy is right for you, If you are confused then at least try once every strategy and check in which strategy you are comfortable or shouts you. Consult a financial advisor to determine which strategy is right for you.
Q2. Can I use multiple trading strategies at the same time?
A2. Yes, you can use multiple trading strategies at the same time. In fact, many successful investors use a combination of strategies to achieve their investment goals.
You can combine multiple strategies, and you can increase the probability of winning.
Q3. Can swing trading be done in the Indian stock market?
A3. Yes, swing trading can be done in the Indian stock market. However, it requires a good understanding of technical analysis and the ability to make quick decisions. Trust me, It is the best thing to start in the Indian stock market, Because Risk is not high as compared to Intraday. Intraday is a much more advanced thing, you need to be an expert, But in order to make money You can easily make money by doing swing trading, it is safe, and you can definitely do it in Indian Stock Market.
Conclusion:
These five trading strategies are simple yet effective methods for trading the Indian stock market. By using these strategies, traders can increase their chances of success and profit from market volatility. It is important to note that no strategy can guarantee success, and traders should always conduct thorough research and analysis before making any trading decisions.
Trading is all about your Personality, if you are disciplined then trust me, you are getting rich soon. Trust the process, and follow the rule.
