Summary of "How To Select Stocks For Intraday Trading | SAGAR SINHA"

Summary of "How To Select Stocks For Intraday Trading | Sagar Sinha"

This video presents the Vande Bharat Strategy for intraday trading, focusing primarily on disciplined stock selection, precise entry setups, and strict risk management to capture profitable intraday moves while minimizing losses.

Main Financial Strategies and Concepts:

Vande Bharat Setup (Intraday Trading Strategy)
- Named metaphorically after the Vande Bharat train: wait calmly for the initial volatile phase (first 15 minutes after market open) to settle before taking positions.
- Avoid trading during the first three 5-minute candles (9:15 to 9:30 AM) due to high volatility and crowd-driven price swings.
- Enter trades only after a clear setup forms post-volatility absorption.
Three-Step Methodology for Intraday Trading
- Selection: Choose stocks with a valid, logical reason for trading (not just chasing price moves).
- Setup: Confirm that the price action matches your predefined setup criteria.
- Action: Take the trade with strict risk management, including predefined stop loss and position sizing.
Price Action Setup Details
- Use Previous Day High (PDH) and Previous Day Low (PDL) as key levels.
- For long trades: wait for a 5-minute candle close above PDH.
- For short trades: wait for a 5-minute candle close below PDL.
- After this candle, look for a smaller "inside" candle (a candle fully contained within the previous candle’s range) with lower volume.
- Enter above the high of the inside candle (for longs) or below the low (for shorts).
- Place stop loss at the low (for longs) or high (for shorts) of the inside candle.
- The low volume in the inside candle indicates reduced aggressiveness on the retracement, signaling a potential continuation move.
Risk Management
- Define RPD (Risk Per Day): Maximum acceptable loss per day (e.g., 1% of capital).
- Define RPT (Risk Per Trade): Maximum loss per trade, dividing RPD by the number of trades planned per day.
- Always place stop loss orders immediately after trade entry to limit losses.
- Avoid emotional trading by accepting the possibility of losses upfront.
- Aim for a favorable risk-reward ratio (e.g., 1:2 or better), with small stop losses enabling larger potential profits.
Stock Selection Process
- Trade only stocks listed in the Futures & Options (F&O) segment (approx. 225 stocks) to ensure liquidity and avoid slippage.
- Use pre-market data (advance-decline ratio) to gauge overall market sentiment (bullish or bearish).
- Analyze Open Interest (OI) changes in options data to identify stocks where institutions are accumulating or distributing positions.
  - Large percentage changes in OI indicate institutional interest and potential momentum.
  - Prefer stocks with recent OI changes but without large price momentum yet (quiet accumulation).
- Filter top 5 stocks based on OI changes and check which have broken their Previous Day High or low.
- Confirm with sector performance and multiple confirmations (e.g., sector uptrend + stock OI increase).
- Avoid entering stocks that have already made big moves to reduce risk of profit booking.
Use of Technical Tools
- Use 5-minute charts for entry timing.
- Use Exponential Moving Average (EMA 10) as a trailing exit indicator.
  - Exit the trade when price closes below EMA 10 after entry.
- Use trading platforms like TradingView and custom tools for position sizing based on risk.
Mindset and Discipline
- Focus on perfection and process, not chasing quick money.
- Avoid making profits by mistake or luck, as it builds false confidence.
- Follow the strategy and risk management rules strictly.
- Continuous practice and discipline are key to becoming a successful trader.
- Beware of fake trading channels; join only genuine Telegram groups linked by the presenters.
Additional Notes
- Options trading is recommended only for experienced traders and not daily, as momentum in options is sporadic.
- Beginners should start with cash equity trading rather than futures or options.
- The presenters offer webinars (₹99) for deeper learning without aggressive course selling.
- An event is scheduled on 27th July in Delhi for further training.

Step-by-Step Guide to the Vande Bharat Setup:

Before Market Opens:
- Check pre-market advance-decline data to determine market bias (bullish or bearish).
- Analyze OI data for F&O stocks to identify top 5 stocks with significant OI changes.
After Market Opens:
- Avoid trading during first 15 minutes (first three 5-minute candles).