Hello traders, I am new in the world of trading and on last trading day(13/10/2017), I tried to short sell Bhati Airtel stock on the basis of RSI showing overbought levels and my stoploss was hit three times and i had to face losses. So experienced traders could you please help me and guide me my questions are:
Don’t trade stock which are trading with news.
RSI alone is not sufficient. You should look at Volume Also. If there is strong volume then should not short. Instead you can go long.
How you can short any stock which is in strong Uptrend?
Always trade in the direction of market.
If market is in Uptrend go long.
If market is in downtrend go short.
@vikas_singh
One thing to understand with RSI is that though the indicator shows overbought level it can stay at that level without showing signs of reversal for a long time.Usually, it happens when there is a strong momentum in that stock. It’s better to use this indicator for stocks that are trading sideways. As @haribabu says don’t use RSI alone in your trading decisions.If you are caught unaware it can lead to significant losses.
Thanks,
Sudheer
This type of problem happens when our entry into the market is in the wrong direction.
Why your stoploss was hitting repeatedly?
In my point of view : when market is bullish and sector is bullish then we should go long.
Again people are suggesting to buy to that stock.
it is the time for booking profit who has been keeping this stock in their portfolio.
if you are shorting it for intraday then it will make loss.
if you are new to market then follow buy in dip strategy for two to three month it will save your capital.
i have explained it in details here,follow the link
Just because volumes are strong does not mean you can go long just because you should not short. Volumes in cash buying can be killed by strong selling in FNO. Sometimes not trading something can be the best option instead of impulsive trading
Fno has very important impact on the movement of stocks. It is responsible for the large spread in Stock.