Professional Trading Framework: Positional/Swing Trading Using Monthly Charts
Dear fellow traders,
With over 18 years in accounting and finance, plus 7+ years of rigorous experience in trading and investing, I’ve concluded that success in both professional and trading life hinges on discipline and rules. Many lose their fortunes before grasping this truth. Ego prevents acceptance of market lessons, leading to hard realizations—either traders adapt or they are eliminated.
I share this framework to help you learn efficiently, safeguarding your capital from gambling or speculation. Built on monthly charts, it offers a “helicopter view” into how institutional “whales” think and execute.
Framework Overview (Indian Market Focus)
Every Saturday, review:
Global indices: Dow Jones, Nasdaq, S&P 500, Nikkei 225, Dollar Index, FTSE, CAC 40, DAX.
Benchmark: Nifty 50.
Sectors: Nifty IT, Realty, Oil & Gas, Bank, Pharma, FMCG, Metal, Energy, etc.
Stocks within bullish/bearish sectors.
Alternative: Scan Nifty LargeCap, Midcap, Smallcap indices—or combine for deeper insights.
Step-by-Step Analysis
Add Indicators: Apply Simple Moving Averages (SMA) and volume.
Monthly: Length 12.
Weekly: Length 52.
Daily: Length 252.
Global Confirmation (1st): On monthly charts, check if price is above 12 SMA (bullish) or below (bearish).
Nifty Confirmation (2nd): Same for Nifty 50 monthly—above = bullish; below = bearish.
Sector/Stock Selection: Focus on trending sectors. For stocks far from 12 SMA, wait for pullback. Identify:
Order Block: Range of the candle before a big impulsive move (up/down) from prior swing high (bearish setup) or low (bullish).
Fair Value Gap (FVG): Imbalance where first candle’s low/high doesn’t overlap third candle’s high/low—mark to be filled.
Daily Confirmation: When monthly shows price nearing order block/FVG:
Volume must decrease in the range.
Green volume decreasing: Pullback ending; sellers regain control (bearish).
Red volume decreasing: Buyers take control (bullish).
Entry: Enter within the range.
Bearish: Stop loss at monthly swing high.
Bullish: Stop loss at monthly swing low.
Target: Hold until current monthly candle breaks the prior candle’s low (bearish) or high (bullish).
Performance Edge
Follow this to align with big players. Expect ~75% win rate with 1:3–7+ risk-reward, minimizing losses.
The attached Asian Paints chart exemplifies: marked order blocks, FVGs, pullbacks, and targets.
Will you abandon intraday, options, and futures for serious, planned execution? The choice is yours. Trade wisely.