How to catch short term Tops & Bottoms by Vishal Mehta

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How to catch short term Tops & Bottoms by Vishal Mehta

June 10, 2022
How to catch short term Tops & Bottoms by Vishal Mehta

“ I wish if I had bought this stock at the bottom and then sell it at the peak I would have made this much amount of money”.

We all are guilty of dreaming about catching the stock at their extreme and selling at peak, while looking at the charts.

But this is just a traders fallacy, to trade like this forever.

Today I will show you how more often than not I catch the trend at the best probable zone with a systematic way

Let’s Begin

How a Conventional Momentum Indicator can be used unconventionally?

Conventional Use:-

RSI>70 is oversold and price will fall.

RSI<30 is overbought and price will rise


https://www.myespresso.com/images/img-1-202206101705184491405.jpgUnconventional Way of Using RSI:-

Andrew Cardwell Introduced the concept of “Range Shift” in RSI.

What is this Range shift?

RSI stays above 40 level, after crossing 60 level to upside = Uptrend

RSI stays below 60 level, after crossing 40 level to downside = Downtrend

Let’s understand this by an example:

https://www.myespresso.com/images/img-2-202206101706536494818.jpg

My favourite Indicator to catch short term- Mid Tops & Bottoms

The 2 Period RSI :-

Developed by Larry Connors, the 2 period RSI is a Mean - reversion trading strategy to buy or sell securities after a corrective period.

The Basic rule can be defined as-

In an Uptrend, look to buy when RSI (2) < 20

In an Downtrend, look to sell when RSI (2) > 80

This is a aggressive short-term strategy to participate in an ongoing trend.

https://www.myespresso.com/images/img-3-202206101715380744654.jpg

Stoploss System 

ATR as stoploss – Entry Price * 2 ATR

                                  Entry price = 500

                                  ATR =  80

                                  Stoploss = 500-160 (2*80)

                                  Stoploss  = 340

Supertrend ( 10,3) - Supertrend is a trend following indicator which can also be used to define initial and trailing stoploss for the entries.

This trading system a trader can integrate into his current trend following system or can use this as a separate trading system.

The objective is only to get a high probability entries from where trend will continue and have objective rules that are easy to follow with good money management.

Happy trading

Disclaimer: Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Please refer the Risk Disclosure Document issued by SEBI and go through the Rights and Obligations and Do’s and Dont’s issued by Stock Exchanges and Depositories before trading on the Stock Exchanges. Brokerage will not exceed the Exchange prescribed limit.


Vishal Mehta ( CMT)
by Vishal Mehta ( CMT)

Founder of Market Scanner

I am motivational professional with over 14 years of experience in sales, customer relationship, strategic management in financial service industry. In my current role, I have trained more than 2000 customers on Technical analysis of the market.