Ride the Trend: Swing Highs, Lows and an EMA 20 Stop Loss

Hello everyone, welcome to today's session in Quantsapp. In today's video we will be learning about how you can take a trade, or how you can hold, in a trending market. But before starting the video, if you are new here, you can go in the description; there is a link below. With the help of that you can download and install the Quantsapp web application. After successful registration you will get some free tools that will help you out in your trading. In the application we have a separate video library. So in the video library we have made multiple videos. These videos are available in multiple languages like English, Hindi, Marathi, Gujarati and Tamil, and cover various concepts like Pro Plus tools as well as various strategies, so you can watch these videos in your meantime, okay. Now, at any point of time, if you guys are having any kind of doubts or queries, you can contact us. You have to go here in the support; you will get our contact number as well as email ID, so you can contact us and we will be there to sort your queries out. Let's start today's video. Now, in today's video, what will we be learning about? We will be learning about how you can trade in a trending market, right? So first of all, when the market is trending, it can be trending in a downward direction, okay, it can be trending in a downward direction like this, okay. So whenever your market is trending in a downward direction, it means the market will be making, the market will be making new lows, okay. So

first of all, this is my swing low; again, this is my new, new swing low, okay; again, this is my new swing low, okay. And at any point of time it should not be breaking the swing high, okay. So this is my first swing, swing high, so you can see the next swing high is not breaking my previous one, okay. Then again, my next swing high is not breaking my previous swing high, okay, and again this will continue to move on. And whenever this type of condition is there, it means the market is in a downtrend, and this is a continuous good trend, so you can enter in this trend with a confirmation, okay. Now again, if I'm making a trade in the bullish direction, or if I want to find out if there is a good uptrend or not, so what I have to do, I have to analyse the trend somehow like this, okay. So this will be my trend. Now in the uptrend there will be a swing low, again there will be a new swing low, and again there will be a new swing low, okay, okay, and again a new swing high, okay, a new swing high, okay, and a new swing high. You can see every time there is a new swing high, okay, and every time my market is

not breaking my previous swing low, right? So this is my good uptrend that can sustain in the market, right? So this is how a good uptrend and a good downtrend look, right? Now, if I have not taken the entry, which will be the perfect time for me to take the entry, okay? So if I am taking a trade in the bullish market, in this uptrend, okay, so if my market will break this one, for example my market started from here, okay, then it came here, okay, now it is moving in the upper direction, okay, so what do I have to wait for? I have to wait for whether my market will break this swing high; at that time I will take an entry in this particular trade, okay. So I will make a trade here, right? Similarly, now you can see this is my support now, right, because my market took a resistance at this level, right? Now there is a possibility, a good possibility, when my market will again come to this level, okay, so there will be many orders that are pending there, okay, so there will be new orders that will initiate from this point. So again, when my market will again come to this level, then I will initiate my trade here, okay, so I will initiate my trade here, okay. Or if you have missed out, you can again take a trade whenever your market will break this new swing high, okay. Then again you have to

make this your new support. So again, when your market will come here, you will take your entry at this point of time. And if you have missed out, okay, you can again make this your resistance, so if your market breaks out, you can take your entry here as well, right? So there are two methods: first one, you can take your trade whenever there will be a breakout, like at this point; or whenever the market will move in the downward direction, you can take a trade after the retest as well, right? But always make sure to wait for the confirmation, right? And the confirmation, I'm talking about the candlestick pattern confirmation, right? Okay, similarly for the downward direction as well. So if my market is moving in the downward direction, okay, and now it has made a support here, you can see my, my market went downward, then it retested itself, okay. Now after this retest, if again my market has come here and it is breaking this support here, you will take a trade here, right? So this will be my first entry point, you can see, okay. Now after this entry point, because my market took a support here, this level is the one that can again act as my resistance. So if my market will go in the upper direction, this is the second point where I can initiate my entry in this trend, okay. So this is the second point, okay. Again my market will come back, again after moving in the

downward direction it will go back, it will retrace itself to this level where there was a swing low at this point, and again it will come back from here, okay. So there were multiple entry points; you could have taken entry here as well, right, after the retest of the market, again with the help of the candlestick pattern. Now the question remains, now the question remains: how will we get to know if the trend has broken down, or the trend can reverse itself, or when to take the exit from the trade, right? So that is the main question that we have to look for. Now for that we will use an indicator here, and that indicator is your exponential moving average, right, exponential moving average. So it will give you a moving average of past candles, right? And when we are talking about exponential, it gives more weightage to the recent price, right? So we are analysing here the 20 moving average, right? So in the 20 moving average we will be analysing the last, last 20 candles, and we will be giving more weightage to the recent prices, okay. So EMA 20. Now let's go directly to the Quantsapp application, and I will open the charts here, okay. Let's analyse Nifty, and currently the time frame that I'm using, that is the 5 minute time frame, and in the 5 minute time frame I will apply from the indicators my exponential moving average.

So I will just apply the exponential moving average; you can see the moving average exponential, so this is the one. Now for the settings, I'll tell you some settings here. So you have to go here in the settings. In the settings, for the length you have to change the length to 20, and as well for the smoothing length you also have to change it to 20, right? So these are the two settings that you have to change, and then apply, okay, right. So you can see my exponential moving average has been plotted in the chart, right? Now the main thing is that whenever you are looking into the chart, and whenever you are analysing any uptrend or downtrend, there are two or three things that you have to look for. The first one is that your market always moves along with the exponential moving average 20, right? So it will be moving along with it, right, like this, like this, okay. It will not go very far from EMA 20, in the upward direction or in the downward direction, both, okay. So your market will not go like this, okay. If this is your EMA 20, it will always revolve close to this, right? So that is what we have to look for, okay. Now, first thing is that if I'm using the exponential moving average 20, right, so you can say today we got a good uptrend here, okay. Now there

will be many traders who must be thinking at which point we have to take the trade here, okay. So let me show you. The first thing is that if I'm analysing this trend, if I am analysing this trend, so you can see my market started here, it made a high here, so this is my first swing high, okay. Then again it went downward, so this was my swing low. Again it made a new swing high, so this was my new swing high. Again my market went downward, okay. Now my market went downward, it did not break my swing low, right? So it means this is a good trend, okay. Again it went upward, okay, and then this was my new swing high, okay, swing high. Then again it went downward a little bit, swing low, then again it is moving in the upward direction, okay. So this is currently my trend, okay. Now for the entry, when can I take the entry? So you can see this was my first swing high, this was my first swing high, okay. So if my market is breaking this swing high, I could have taken an entry at this candle, at this green candle, okay. After that there was a downtrend, but now many of the traders must be thinking, if there was a downtrend, okay, and it also broke this EMA 20, it also broke this EMA 20, because it closed below this EMA 20, so should we have to wait, or should

we have to take the exit from this trade, because my candle closed below this EMA 20, right? So I'll tell you the trick. Now suppose I have taken entry here, at this candle, right? So what is the price of this candle, or you can say my entry price? So suppose I took the trade at the entry price, that is 594, 23,594. So suppose I took the entry at 23,594, right? After taking entry, my market moved a little bit in the upward movement, but then it moved in the downward direction, right? Now what will be my stop loss? So any candle which will be closing below my EMA 20, right, any candle which will be closing below my 20, for example this one, so what I have to do, I have to mark the low of that candle, right? So suppose this is the low of this candle, right? So this will be my stop loss. Now at any point of time, if the next candle, or if the next candle, or if the next candle, any candle, if it will break this stop loss, then I will exit my trade at that moment, right? So you can see, you can see here as well, no candle has broken my stop loss, right? So it means this was the trend; I have to wait for the market. And then you can see, if I would have taken entry here, okay, so the market just, it was a

liquidity sweep, you can say, okay, so it was for the stop-loss hunting, and then again my market went in the upward direction, right? Let's see some examples from the past as well, okay. So let's see some examples from the past as well where I saw a good uptrend in the market, market. So you can see here as well, you can see here as well, the market was in a downtrend, okay. So the market was in a downtrend; it gave you a good downtrend, okay. Now in this downtrend also you can see none of my candles has closed above this EMA 20, okay. So this was a good trend. Now here at this point, here at this point you can see one of my candles closed above EMA 20, right? So this is one of the candles. So what I will do: any candle that will close above my EMA 20, I will mark the high of that candle, and that will be my stop loss. So you can see my stop loss got hunted at this point of time, okay. So if I would have been trading from this point to this point, or this point, or this point, my stop loss was here. So it means, it means I got a very good range. For example, I took a trade here at this point of time, right? So you can see still I got a good profit in this particular trade, right? So this is how, if you are trading in any

particular stock or any particular index, and you don't know when you have to exit or when the trend will end itself, so this is the strategy that you can work upon. This is a strategy with the help of which you can trade, right? So you don't have to exit in panic, okay. Just wait, just wait for the candle to close below, okay. If you are taking upward, if you are taking a bullish trade and the market is moving in an uptrend, then you have to wait for the candle to close below, okay, a red candle to close below your EMA 20. If it does so, then you have to mark the low of that candle, and just make sure that is your stop loss, right? Similarly, if you are trading in a downward direction, okay, you are having a bearish trade, and at the same time there is a candle which actually closed above your EMA 20, a green candle, then you have to make the high of that candle your stop loss. And at any point of time, if any candle breaks that point, that will be your stop loss; you will exit from the trade. So I hope you got to know how you can take a trade when the market is trending, okay. Video, you can like the video, you can share it with your friends, you can share your views in the comment section as well. Make sure to subscribe to the channel. Thank you so much guys, this is your trainer, Ankit Singh Rawat. Have a good day.