Easy Swing Trading Strategy using Supertrend + RS Strategy | marketfeed

Be it trading or investing, the reason why a lot of retailers still are in losses is because they cannot hold on to their winning trades. It's just like the story of your grandfather who sold his land off for mere 1,000 rupees 30, 40, 50 years ago. I've heard the story multiple times. And now that story in its new evolved digital form is what we are seeing in the Indian stock market where retailers enter stock but they don't follow the saying which is cut your losses short and let your profits run and that's exactly what we are going to learn today. The solution for all of this is a simple indicator that all of you can use which is called as relative strength not RSI or relative strength index. It is just relative strength. It is measure of the strength of a stock compared to its index and that is a tool that we are going to use today to learn this concept. You know when I was researching when I was coming up with this video the major reason for uh actually putting out this video was two weeks ago there was a really good performing video on this channel which talked about high momentum swing trading stocks. In that we even selected a stock called as DF. We analyzed the chart and understood that it is at a good point for a breakout. And what has happened? It has given a beautiful breakout. The stock is up more than 20%age as of the time I'm recording this video and I'm hoping it will keep going up higher. But that is just my hope. Now, how do I put this thought or this belief or this hunch into actionable data? How do I visualize it in my chart so that I can take intelligent decisions? And that is what we're going to discuss today. In fact, it is going to be a much larger concept where we even discuss a new swing trading strategy that maybe you can use if it fits your trading style. You can even implement that. So, in this video, first let's discuss how you can pick a stock, a way, a method to pick a stock using this simple tool that is relative strength combined with super trend. Then we'll go into a strategy with which you can use to plan your trades. Again, this is a swing trading setup that we are going to talk about. And third, we'll be talking about a framework to plan your exits from the stock as well. So, you plan the entry, then you also plan the exits. And that is what this entire video is about. So, if you're a swing trader, make sure you watch till the very end because I'm sure this will be a very valuable video for you. So, if that's the case, what are you waiting for? This is AJ. Welcome to Market Feed. So, first, let's open Trading View, which is a platform that we're going to use to analyze charts. Again, if you're a beginner, make sure you watch my previous video on 14 top rated platforms that you need to use as a beginner. Again, the first and the most important one there is definitely definitely trading view. Okay. So, once you come into trading view, open the stock or chart that you want to observe and I want you to add two indicators into your chart here. The first one is going to be relative strength. So, when you type relative strength, the first thing that will come up here is relative strength index. But don't go ahead and click it. Go find relative strength of a stock by the bhat trader here. Okay. Once you have added it to the chart, you can close this. Okay. You can see that the relative strength has been added here. Now I want you to go ahead and add super trend also. Okay. So come to the indicator section again. Add super trend. And voila, we're ready. So now that you've added both the indicators onto your chart here, you can see relative strength here on the bottom and super trends as line on the chart. I want you to go ahead and modify the settings especially for relative strength. So come here, come down to relative strength and doubleclick on the chart here. You'll be seeing period. I want you to adjust that first. Okay. Go ahead and enter 55 as a period of reference for your relative strength chart here. Click on okay. And one more thing that I want you to do if the stock is a midcap stock or a large cap stock based on that I want you to select the comparative symbol. So basically very simply put I'll tell you what relative strength is. It compares the stock price movement divided by the index it is being tracked upon. Okay. So here in this case by default the comparative symbol is NIFTY. So it shows that DF is much stronger. If it is zero it is exactly as strong as NIFTY. Okay. I'll show you Nifty chart here. Yeah, you can see that for Nifty the line will be always zero because how is the number being calculated? Whatever is the stock price movement divided by the index price is how RS is calculated. So anything on green, okay, let's go back to DF. Anything on green says that DF is stronger compared to NIFTY. And if it is on red, it says that Nifty is stronger compared to DF. Okay, I hope you're getting where we are going to here. Keep super trend in the default setting itself which is 103. Again we are going to be analyzing swing trading stocks. So I want you to keep the chart level as one day itself. Okay. So this is a one day chart of DF limited which is a large cap stock with a market cap of more than two lakh cr rupees and you can see the super trend is plotted in the chart along with the relative strength compared to nifty. Okay. Hope you got the entire charting setup very clear. So we learned about relative strength which basically indicates the strength of a stock. Now let's quickly look at super trend and how it works. Again super trend is also a very long interesting concept. If you want a detailed video on either relative strength or super trend make sure to comment down below so that I can make a dedicated video on all of those. Okay. So basically the strategy here is very simple. You have two indicators. One is relative strength, one is super trend. So super trend works with the simple logic that if the stock is in a position where green is shown in the chart okay where this line is showing green it is saying that it's a good bullish indication for the stock and this level will act as a support for the stock and let's say you go to DF right here. So here super trend says that it is red means that the share price the trend of the share price is negative. Okay, it is bearish and you can see the share was coming down down down down. When it tried coming back up, this level acted as a resistance and finally it tried for a breakout, failed, came back, then again tried for a breakout, then sustained and kept moving up. Okay, so super trend if it is in green it indicates the stock is in a bullish zone right now and green will act as a support zone and if it is in red it says the stock is bearish and this red line will act as a resistance for the company. Okay, hope you got that really well. If yes you understood the setup the trading setup now let's move ahead into the trading strategy part of it. The strategy is very simple. You're going to take double confirmation from both super trend as well as relative strength to understand when you can possibly enter a stock. Again, none of these are stock recommendations. Make sure you do your analysis. These are just patterns that I understood. These are strategies that I try to learn myself and I'm sharing in front of you. Okay? So, if these indicators and these strategies work in your trading setup only, then use it. Okay? Make sure you do that really well. Make sure you understand the concept really well before you start getting into it. So what did we say? Double confirmation is what we are going to look at. So double confirmation says that whenever RS is in the green and super trend is also in the green then you can decide to enter a stock. Double confirmation. Let's say DF was here and it gave a breakout in super trend. Okay. Super trend trend turned green on the daily candle but you won't enter. Where will you enter? When super trend as well as relative strength turns green somewhere around this candle is where relative strength and super trend both turned green we got a confirmation then you can think about entering a stock okay same thing if you were going negative if you're trading futures here let's say super trend gave you a signal that the stock is going to be bearish but do not enter the stock uh a bearish trade just yet wait for a confirmation from relative strength which is coming around this candle le and then you can think or plan for a bearish trade. Okay, you understood the simple mind map, two confirmation, two indicators, very very straightforward. One is super trend, the other is a simple mathematical formula which divides the price of the stock compared to the index and hence you have relative strength here as well. Compare both of them. See if both are in green, you're getting a bullish indication. See if both are in the red, you're getting a bearish indication. Don't forget all the rules we have already said which is how to find your proper SL. Okay, it's again trading is not easy. It requires a lot of effort, a lot of thought put into it because just identifying a stock that can go up is never the answer. Identifying what level should your stop-loss be so that there is a very less chance for your stop-loss to get hit and a higher chance for your target to get hit. That so that's when you start getting winning trades and start cutting your losses short. That's what we want. Okay. So, we understood an entry concept. Maybe we can try out few more stocks to get a gist of it. Okay. This is Manapuram. So, Manapuram again a very simple uh stock which drives itself by these rules. Okay. There are few stocks and few companies which will ensure or work really well with certain strategies that you have. You can double down create a watch list of only those stocks. Track them and decide when to take your position in it. Why do you want to track hundreds or thousands of stocks? You just need to track five or 10 or 15 or 20 stocks maximum in your watch list which you have high conviction on and you understand how they behave. Okay, one such stock here is Manapuram. Okay, I'll give you a quick example here. Let's consider Manapuram chart right here. It turned bullish on super trend somewhere in December of 2024. Okay, it broke the red resistance line and it started forming green super trends which means it is bullish. But did our relative strength give us confirmation? No. Right? Relative strength only gave us confirmation around 20 to 23rd December. And then you can plan an entry. You can even think about an entry. Okay? You can even draw a box here. Okay? Wait for a breakout if you want to. So again, these indicator combinations will give you a lot of mind space to think about how you can enter a stock. Okay? When did it turn bullish on both the trades? It turned somewhere around here, right? and it kept on going up, kept on going up, then it came back down and it even broke the super trend here. So now I'll get to the beauty of this strategy. It told that you have to plan your entry somewhere around here. And if you were intelligent, you would have kept a stop-loss under at least a super trend at the time of entry, which is somewhere around here. You would have kept a stop-loss, 9%age stop-loss in this trade. Now the stock went up, went up, went up, but then it crashed back down at the time of its earnings and it came below the super trend level. The super trend turned into red. But will you exit? If your stock has not hit its stop-loss, you don't need to exit because the double confirmation is not there. The double confirmation which is given by relative strength going into zero was not given here. Relative strength continued to be in the red. So you can hold the stock until it hits your stop- loss. You don't need to panic. That's the beauty of this strategy. So again, it continued to go up, continue to go up. You can see that somewhere around this zone, relative strength touch near zero, but super trend is still positive, right? So you can keep holding on to the stock. And that is a strategy. That is how the mind works inside the strategy. Hope you got it very very clear. So let's come back to the DF example which is what we started with our problem statement on we caught the breakout somewhere around here in our last video got nearly or more than 20%age returns but when do we exit we'll come back to that when do we exit so our initial stop loss is still here 604 but do you think it is logical for us to wait for that long 20 30% for the stock to come back down never right so we need to have an intelligent new stop-loss And what is super trend saying? Super trend is giving an indication somewhere around 777 or 780 as of today. And it can be a good support zone for the stock. And if super trend is broken along with a breakdown in relative strength, you can consider this to be a good exit opportunity in the stock. Okay. So what did we learn here? How to set your targets or how to keep holding on to your winners with a lot of conviction with data backed. More than that, logical decisions. Okay, data you can back test. You can come to all of these charts. You can find out which stocks make the most sense for the strategy. Again, it might work on a DF, it might work on a manipurum, but it might not work on a Reliance. So, you'll have to understand, you have to put in the groundwork, you have to put in the hard work to understand the stocks which filter or which fit these rules. Once you do that, you have the mind map ready, you understand the concepts really well, why we are doing what we do, then entire concept is easy. And that is exactly what you have to do in the stock market, my friend. So, hope that this winning case study was an inspiration to all of you to learn a new concept. First, it was a momentum trading scanner that we talked about or talked about. Then now it's a screener of the strategy where we use double confirmation to either enter a stock or my favorite plan your exits in the stock. And that's it for this video. I hope you got a lot of value and you were able to learn a new concept which is relative strength as well as super trend. Again if you want detailed videos on any of those, make sure you comment down below so that I can go ahead and plan it as my next video. As always make sure you hit the like button if you like the concept. Subscribe if you want more videos like this. This is Ajay signing off. See you all. Bye-bye.