The Evolution of a Champion Trader
Goverdhan Gajjala started his trading journey through swing trading, a common starting point for many. From mid-2020 to 2021, he explored the market, achieving varied success. The pivotal moment came when he discovered day trading’s benefits. This wasn’t just a shift in trade frequency; it fundamentally changed how he interacted with the market, offering the immediate control he sought.
Focused on Risk Management
Transitioning to day trading, Gajjala was cautious, starting with small trades and low risk. His focus was on steady growth rather than quick gains. This method wasn’t solely about protecting his funds—it was a way to deeply understand market dynamics. Over a year, he increased his trade size carefully, always mindful of risk.
A Winning Day Trading Playbook
Gajjala uses 5-minute and 15-minute charts and custom scanners to find small-cap stocks with high volatility, focusing on those with good liquidity and volume for the best trade execution. He analyzes price and indicators, such as the 9 EMA and 21 EMA, to assess market strength and demand.
At the open, an increase in volume suggests strong demand, while a decrease amid selling pressure can indicate a chance for prices to rise. He focuses his attention on the intraday charts but looks to align with key levels and signs of short squeezes on the daily chart.
The Importance of A+ Setups
Goverdhan Gajjala found success in day trading by focusing on the best setups. He used detailed backtesting and chart analysis to build a strategy playbook of 5 – 6 setups. By examining past trades and looking for patterns that led to wins, he learned how to spot great trading opportunities.
Simplifying with Price And Volume
Gajjala’s strategies revolve around two key elements: price and volume. He noticed that changes in volume often signal the start of new trends or shifts in demand. Focusing on stocks with a lot of activity, he found more reliable trading opportunities. He learned to see certain price and volume patterns as hints of future price moves.
Avoiding Trading Traps with Personal Rules
One of Gajjala’s biggest takeaways is the value of self-discipline. To dodge common trading errors like overtrading or making trades out of frustration, he set strict personal rules. For example, he’d take a break after a certain level of loss to prevent rash decisions.
The Advantage of Long Positions
Gajjala emphasizes the benefits of favoring long positions over short selling. He points out that long positions are simpler and tidier, with the possibility of higher returns. Short selling limits profits to a maximum of 100% if a stock’s value falls to zero. However, long positions can lead to profits exceeding 120-150% if the stock’s price significantly increases.
Gajjala recommends selecting stocks that have a low float, considerable trading volume, and robust demand. These traits help in driving strong upward trends in stock prices.
Gajjala highlights how crucial continuous learning is in trading. He takes advantage of every chance to learn—through videos, podcasts, and mentorship—to enhance his understanding of the market. Gajjala believes that this constant pursuit of knowledge is essential for staying ahead as a trader.