Today I am going to contradict my previous statement. Till now I was following a pattern where the stock bounces back from a trend line and then I buy. But today, this one thing blew me off. I did a breakout trade and it was real money minter. I always prefer to catch a train when it has stopped. But this time I just caught a flying rocket!
Some of you must be wondering, what is a breakout trade. When a stock moves past a resistance it is called a breakout. Now the secret sauce of winning a breakout trade as I just found out is the strength of the trend which can be measured with ADX.
The result is in front of you. This the trade for Hindustan Unilever 2018 May 1600 Call option.
Bought on 16/05/2018 @ 11.15/-
Sold on 18/05/2018 @ 23.70/-
Now how much money came in? That would be –> (23.70 – 11.15) x 600 = 7530/-. This was….