Your technical plan: rules, risk and the fundamentals underneath
नेप्सेका लागि प्राविधिक ट्रेडिङ योजना: नियम, जोखिम र जर्नल
Indicators don't make money. Plans do - written down before the trade, sized for the risk, and judged over many trades. Here is how to turn everything in this course into one.
Indicators don't make money. Plans do.
You now know what the main indicators measure - and how little most of them predict on their own. The useful question isn't "which indicator works?" but "how do I make decisions that survive being wrong?" That's what a written plan is for.
The five questions
| Question | Tools from this course |
|---|---|
| 1. Context - is this worth trading at all? | Fundamentals first; the 200-day slope for the trend; market mood; liquidity (lessons 2, 7) |
| 2. Trigger - why now? | A breakout close (8), a squeeze resolving (5), a pull-back holding a level - with momentum (3) as context |
| 3. Stop - where am I wrong? | Below the level that defines the idea, and at least 2 ATR away (6) |
| 4. Size - how much? | Rupees at risk ÷ stop distance; smaller for fat-tailed setups like new highs (6, 8) |
| 5. Exit - where do I take profit? | ADR-realistic targets, untaken highs, or a trailing stop under higher lows (6, 8) |
A worked example
- Context: a well-rated bank (good ROE, low NPL, fair P/B), price above a rising 200-day average, liquid (Rs 2 crore a day). ✓
- Trigger: after a six-week Bollinger squeeze, it closes above its range high at Rs 520 on rising volume spread across many brokers.
- Stop: back below the range high and 2 ATR away - ATR is Rs 14, so the stop is Rs 490 (Rs 30 risk per share).
- Size: risking 1% of a Rs 5 lakh account = Rs 5,000 → 5,000 ÷ 30 ≈ 166 shares (about Rs 86,000).
- Exit: half near the next untaken high at Rs 580 (about 4 ADRs - expect weeks, not days); trail the rest under each higher low.
- NEPSE checks: T+2 - I can't sell for two sessions, and a gap below Rs 490 on day one can't be stopped; ~1% round-trip costs mean the target must be well above them; no book closure due in the next month.
Charts sit on top of the business
Everything in this course is about when. None of it tells you what is worth owning. A perfect breakout in a loss-making company with three brokers holding its float is still a loss-making company with three brokers holding its float. The professionals' order is always the same: business first, then price, then the crowd - the three-legged chair from our investing course.
- For investors: use technicals to avoid buying good companies in the middle of a collapse, and to add when the trend turns your way.
- For traders: use fundamentals to avoid the stocks most likely to be manipulated, and to choose which setups deserve full size.
Journal, then judge
Write down every trade: the plan, what happened, and one sentence on what you learned. After twenty or thirty trades, the numbers will tell you which of your setups actually work - for you, on NEPSE, after costs. That's the only backtest that really matters.
- Is the business worth owning, and is the stock liquid enough to exit?
- Is the longer trend with me? Is momentum strong or fading?
- What exactly triggered this - and would I take it again in twenty similar cases?
- Where am I wrong? Is the stop outside the noise (2+ ATR)?
- How many shares does my risk allow? Am I sizing down for fat tails?
- Is the target realistic in ADRs, and above the ~1% round-trip costs?
- T+2, book closures and the 10% circuit - checked?
- Is it written down?
See it live on MacroLens NP
Everything in this lesson, worked out on real NEPSE data for every listed company - inside the MacroLens NP desk.
Lesson summary
- A plan answers: what context (trend), what trigger, where I'm wrong (stop), how much (size), where I exit.
- Use ATR/ADR for stops and targets so they respect how the stock really moves; account for T+2 and about 1% costs.
- Put charts on top of fundamentals: technicals time good businesses - they don't turn weak ones into investments.
- Journal every trade and judge the rules after twenty or thirty, not one.
Create a free account to keep reading
Lesson 1 is open to everyone. From here on, the course is still completely free - we just ask for an account so we can save where you stopped, keep your quiz scores and let you pick up on any device.
No card, no payment. 9 more lessons, 89 minutes in all.
Education only, not investment advice: nothing here tells you to buy or sell any share. Investing carries risk - you can lose money. Examples use made-up companies unless a real one is named.