Short-term trading Strategy/ Technical analysis/ macrotrading

 Short-term Trading strategy

Trading time duration will vary to every traders, generally, short-term trading will be rather tough than Long-term because it success ratio is low, here, we discuss about how to do make successful trading in a few days or few weeks, short-term must have knowledge of market sentiments, which will drive the market in short while but the market might  turn back to its general trend, in terms of the trading decision, not important where you are going to enter into the stock rather the crucial thing is when to enter into the trading. 

Look at the Broader market volatility, the Higher volatility will be favor to short seller as well as the lower volatility will be favor to Long- position. The volatility Index (VIX) if goes above 15 level, it could be unfavor to Buying the stocks, however, short sellers can succeed  during increasing of volatility. If VIX  index is being below 12 which is right time to take Long position, 

The benchmark Nifty when trading above the 20 Days Moving average, that means the market is bullish, there will not worry about slight correction of the market, traders may hold their position until they reach its target, but the condition is that they select a strong sector in which they have strong stocks. 

If the Nifty is trading below 200 DMA ( Daily moving average) that means the market has lost its grip where bearers would be dominants in the market, so, traders may take a short position, the broader market or individual stock when break below its support level, or when hit the resistance level,  

Some macro data comes to the markets sequentially that affects the prices, thus, we need to know how to create a trading opportunity, before and after come data to the market. further  to know macro data schedule click this Link: https://tradingeconomics.com/india/calendar. 

For example, if Inflation rate is below 6 percent, the inflation data will not draw the attention of the Market participants, at the same time, the increase of crude oil prices, and inflation when it moves beyond the 6 percent level, while the market will be keen on Inflation data.

Likewise, RBI monetary policy might be more important thing during higher inflation period, 

Conversely, in the time of  low inflation, the arrival of policy  will not affect the stock prices. 

IIP data, which might impact on Mining and manufacturing companies, even moderate improvements of IIP would push the stock prices during the Bull market as well as subsequent positive data would help to recover when the stock market is being down trend, 

GDP data, which data releases at three months once, this data should be highly focused on all range of the market participants, it is crucial for the market, this projection number is higher, that means the common stocks could move positive direction before come actual data, perhaps, this number beats market expectation, positive trend would continue. 

Suppose, GDP number does not meet the market expectation, absolutely it is bad news for the market, traders should wait at the moment until they get a clear direction of the market movement. 

Auto sales data would affect Auto stock prices, 1st day of every month, press released to the market, in which sector stocks usually be more fluctuation, before and after come to the market, 

Increasing the crude oil price is bad news for the market, because 80 percent of oil is imported from other nations, and contributes 25 percent of our import bill. Hiring the oil prices would push up the prices, some industries are using crude oil and its substances as a raw material. For example, Paint industry” s Raw material come from petroleum products, soaring of oil prices push down the paint stocks, whenever, oil price crossed above the 100 Dollar marks, recession has flowed that,

Falling oil prices are good news for the market, and spiking up the oil prices bad news for the market. 

I have given above the Links of Macro events calendar. Use that calendar to know when a macro event arrives in addition, an estimated number would display on there. The Macro events projection numbers would start to reflect on the stocks and Broader market. 

Inflation and RBI monetary policy will impact on Banking and Financial stocks, that is why, those are interest rate sensitive stocks, normally, the market participants will start to play out the stocks as an estimated number. So, positive and negative estimates , after coming out actual data, sometimes the market could react differently. . 

IIP data - Impacts on Eight core sectors, when the market is in downtrend, upcoming IIP data would stimulate the short covering, as well as negative and positive numbers would create sentiment accordingly. 

Technical analysis for short-term strategy

The short-term moving average crossover is a good indicator to buy and se;ll stocks. The 3 days Moving average crosses above the 10 day moving average, that stock is getting strength, moreover, it will be a good bet to Go long.  But, make sure which stock is trading the 20 Day moving average, 

The 50 day Moving average goes under below200 Day moving average. Which stock is going to touch a new low that will be a good bet to make short positions. 

When applying the Moving average where it should combine with RSI Tools, which crosses above 70 thus, the 3 Days moving average crosses above the 10 days moving average that is a great opportunity to go long. 

 check out crossover

On the opposite, the RSI goes Below 30 level, while if the 10 days moving average crosses above the 3 days moving average that is a great opportunity to go short. 

So many strategies have identified a trading opportunity, though, I put some reliable and viable strategies to execute your trading. Check out this strategies through CHARTINK . if you need more clarification, reply feel free.