There are many people around the world, who are looking for strategies to trade in the stock market and gain good profits. The success of the Stock Market Trader depends on the strategy he utilizes to trade in. Thus, the key to success in the Indian Stock Market is the suitability of the strategy one use. If the trader is new to the Stock Market Trading, and he does not have an effective strategy to trade in, he can trade on the basis of Stock Futures Tips, Intraday Trading Tips and Stock Option Tips from expert trading advisers.
In this article, we are going to discuss a strategy which uses the technical indicators like alligator indicator as well as moving average like simple moving average. This strategy is a combination of alligator indicator and 50 SMA.
The alligator indicator is a combination of 3 moving averages with the periods, 3, 8 and 13. There are generally two important phases of alligator indicators, the sleeping phase as well as eating phase. When the market is moving sideways, or it is not trending the alligator becomes horizontal and it can be said that the alligator is sleeping.
Similarly, when the market is trending, either in the up-trend or down trend, the alligator is considered to be eating. The side-ways market as well as trending market can be distinguished based on the alligator phases. If the alligator is in eating phase, the market can be considered as trending. Similarly, if the alligator is in sleeping phase, the market is considered to be side-ways or non-trending.
In the strategy we are considering, we are using a combination of 50 SMA and alligator indicator. The concept of using 50 SMA lies in that when the price is above 50 SMA, only buy calls should be taken. Similarly if the price is below the 50 SMA, only the sell calls should be taken.
Apart from the strategy discussed above, there are many other strategies, which can be used to trade with an edge in the stock market. The Technical analysis is full of indicators and combination of 2 to 3 indicators can prove as an ideal strategy for trading. The number of false signals can be reduced by using more than one indicator simultaneously.
Thus, it is evident that sufficient knowledge about the Indian stock market as well as the allied strategies should be taken before starting trading with real money. The strategies should be back tested as well as should be paper traded before investing the real money.
One should follow the principles of risk management as well as wealth management even if; one is trading on the basis of Stock Futures Tips, Intraday Trading Tips and Stock Option Tips from expert trading advisers.