BTST Trading Strategy

 

BTST (Buy Today Sell Tomorrow) TRADING STRATEGY

In this article, I am going to discuss the BTST Trading Strategy (Buy Today Sell Tomorrow) in detail. Please read our previous article where we discussed the Relative Strength Index Trading Strategy. This article will cover the complete detail about the BTST (Buy Today Sell Tomorrow) TRADING STRATEGY as follows:

1. Price Action based strategy
2. A clear rules-based system with defined Entry, Target & Stop Loss
3. Clear rules for stock picks, tell clearly which stock to Trade

WHAT is BTST (Buy Today Sell Tomorrow) Trading Strategy?

BTST (Buy Today Sell Tomorrow) is a method that allows customers to sell shares before they are credited into a Demat account or take the delivery of shares. The reverse of BTST is called STBT i.e. Sell Today Buy Tomorrow

BTST Trading Strategy Advantages

1. It allows you to benefit from the short-term volatility or increase/decrease in the price of the stocks.
2. If you find intra-day trading unprofitable, then BTST gives 2 more days to your trades to improve its performance.

BTST Trading Strategy Disadvantages

1. Unlike intraday trading, most stockbrokers do not offer margin to BTST facilities.
2. Overnight risk

Strategy for BTST trading

Change of Guard (COG)

LOGIC. Change the direction of MINOR move

For more information read Candlestick Pattern Analysis

COG ENTRY Either

• Pullback Reversal from the support level
• Trend reversal from the demand zone

Criteria for long

1. Previous day red candle should be small
2. Price at the clear support level
3. Next green candle(current t day) price close above the red candle(previous day)
4. CURRENT DAY CANDLE MAY GAP UP OR GAP DOWN DOESN’T MATTER
5. VOLUME GREATER THAN PREVIOUS DAY

  

Breakout Strategy

Here I discussed the breakout trading strategy. read as logic and condition all are the same. Just move to a daily time frame

• Price should close below clean support and above the resistance level
• More condition. Go through the above article

 

Stock selection condition for both BTST Trading Strategy

We will study the following parameters to select stock

• Attempted Direction (Up, Down, Sideways) or intraday structure
• Volume Generated (High, Low, Unchanged)
• Closing swing and volume
• Data(future and option)

By studying the above factors we can get a tight grip on what the smart money was trying to achieve and was that attempt successful. And Possible of the trend for the next day

Internal structure

Attempted Direction (Up, Down, Sideways)

Only select those stock .which intraday structure is either trending up or down

Opening range and follow-through

 

Select those stock which opening range got breakout and follow-through

CLOSING SWING and VOLUME

• If the market closes with an extremely unusual discount (closing at day low) OR excess premium (closing at day high), it is giving the trader a very loud and clear signal that continuation is likely the next day.
• The last SWING or closing swing often tells the truth about how strong a trend truly is. “Smart money “shows their presence in the last SWING or closing swing, continuing to mark positions in their favor. As long as a market is having strong closes (closing at day high), look for an up-trend to continue.
• High volume on the close swing implies continuation the next morning in the direction of the closing swing.

Data

Future open interest

2) Increase in open interest with an increase in price during the last swing of the trading day.it shows the strength of the trend

Option data

1. Long buildup or short buildup
2. Avoid short covering or long liquidation move

Note-check option chain video for option chain analysis or you can read here

Next support and resistance level

1. Where is immediate support and resistance or supply and demand zone by technical analysis
2. Options support and resistance level

Stock selection condition for BTST strategy

1. CLEAN HEALTHY CANDLE
2. Today price trading above the previous day high(for long )
3. Trending internal structure
4. The last swing must be trending and close at day high (for long)
5. Last swing volume and open interest increasing,
6. Technical analysis and Options data suggest no nearby any support or resistance level

Odd enhancer

INDEX

Identify what the general market or index is doing?

1. Trending
2. At support or resistance zone

First Identify the support and resistance zones in the index (nifty). If markets closed near the support zone, I would know to look for opportunities to buy the next day as the price was likely to rally from that support zone

Sector selection

look at charts sectors to find some that are also trading near support zone as those sectors would likely rally from that support zone with the index (nifty ) market the following day. Out of the few sectors, I would always find one or two that were set up very well with the broad market (index).

1. If the index is bullish, select a strong sector for BTST

News stock

AVOID frequently NEWS BASED SECTOR (LIKE PHARMA)

Check history

• CHECK the history of the stock and find whether the stock has the capability of moving consecutive strong days. if yes then select

Ol-OH

• If stock open with open high or open low
• Add confidence if open with open low or open high

Exit

• Most of the time these scripts are opened the next day with a gap up .profit should be booked within 5-10 minutes in the next session.
• If the price moving strongly from the open in the direction of your entry, you can trail your stop loss
• If the market closes with a strong premium (closing at day high) but opens weak (gap down)the next morning, the odds favor that the first move will be to the upside to test the previous day high(fill the gap). If the market closes weak, and the futures close with a discount (close at day low), yet the market gaps up the following morning, the first move should be a retest down to attempt to fill the gap.
• If the price gap down (you took BTST).YOU can exit immediately or wait for opening range and place sop loss or wait for the first five-minute candle and place stop loss. It totally depends open your risk

Entry

• After 3:15 pm

Please watch the following video if you want to learn and understand the BTST Trading Strategy (Buy Today Sell Tomorrow) concept in a better way.

VIDEO : BTST Trading Strategy (Buy Today Sell Tomorrow