I still remember the first time I sat down with Parth — one of those rare traders whose calm face hides years of chart-watching and cold-blooded execution.
He wasn’t just a trader; he was a swing trading specialist who did this as a business.
Yes, not just a passive income trick or side hustle. For him, swing trading was full-time, focused, and fiercely strategic.
We were just getting into the discussion when I said,
“So, you do swing trading as a business, interesting, because most of the traders think it to be a source of passive income and consider options or equity intraday as a full-time career.”
He smiled and shrugged like it was no big deal.
“It’s the biggest myth. I have only one rule — if you know what you are doing, you can make money regularly.”
His confidence caught my attention. I leaned in.
“True. So let’s discuss your success secret then. What’s your strategy — I mean how do you determine entry and exits after choosing stocks?” I asked, genuinely curious.
“Simple. I check daily moving averages,” he replied calmly.
I raised my eyebrows.
“Really? No complex price action or anything?”
“No,” he chuckled, “and I’ve given it a name as well. It’s called the 20% strategy.”
That smile on his face said it all — this was something that worked.
Cracking the Code: The DMA Setup
“So, let’s get ahead, to understand this in detail,” I nudged.
“Sure. First of all, I use a combination of 4-DMAs i.e., daily moving averages — 200, 100, 50 & 20. After plotting them on the chart, I check their order. If it’s arranged with 200 on the top and then in descending order with 20 at the bottom, then the stock is undervalued.”
It was beginning to click.
“Fair — and if the order is reversed, your fundamentally strong stock is overvalued,” I added.
“Correct,” he nodded.
“Do you use any other indicator as well?” I asked, knowing well that traders often have a confluence system.
“Yes, to confirm the trend and to take positions, I combine them with RSI. That gives me surety and confidence.”
Simple. Disciplined. Effective. But I still hadn’t fully grasped this mysterious “20% strategy.”
The Real Deal: The 20% Strategy Explained
“Fair, so now I want to know your secret 20% strategy,” I said, pulling myself forward to get a closer look at his screen.
He smiled and continued:
“Well, it’s simple. First, I check the candle formation. If 3-4 green candles are formed on the daily chart continuously, this means that the operator has made their entry. Now these green candle formations must take the price around 20% above the value before.”
I tilted my head.
“Okay, so you take entry after that?”
“Of course not,” he grinned. “But this gives me an idea that the operator has taken multiple positions. This helps me calculate their average value. So of course, he won’t exit right away and will at least target 20–30% profit on the average price.”
Still trying to connect the dots, I nodded slowly.
“Right.”
“That’s where I plan my entry. I wait for a little pullback or end of the consolidation phase — this could either be due to retail traders booking profit or promoters exiting a few positions to average down the stock price. This becomes the perfect entry point for me.”
That’s when it hit me — this wasn’t just about numbers or indicators. This was pattern recognition fused with behavioral understanding of market players. It wasn’t just technical; it was human psychology in motion.
The Result? Numbers That Speak Loud
“Wow, this shows your level of experience and observation,” I said, impressed.
He leaned back and said something that still echoes in my mind:
“Yes, and you won’t believe that there are many stocks, which have given me more than 38% profit in 1 or 1.5 months just by following this simple strategy and entry rule.”
“And how do you decide the exit price?” I interjected, leaning in with curiosity.
“Simple,” he said, without blinking. “I wait for the price to reach the high of the candle where I believe the operator first entered. That’s usually the zone where profit-booking begins. Once we cross that, the smart money might start exiting.”
I nodded slowly. “Fair point.”
“Are there any specifics you look at while executing this strategy?” I asked, genuinely trying to break it down for myself.
“Yes, two non-negotiable rules,” he replied, counting on his fingers.
“First, all these operator activities should be visible within the last one year. I don’t bother digging into older charts.”
“And second,” he continued, “volume. Even if the price is 20-30% higher, before I exit, I look at volume behavior. If there’s a sudden spike in volume but the price doesn’t fall sharply—or worse, if it drops with low volume—it often means the operator is still holding some position. That tells me not to panic exit yet.”
I scribbled down those lines in my notebook.
There was a certain raw confidence in the way he explained things. No overcomplicated indicators, no flashy software—just candle behavior, moving averages, and volume.
Final Thoughts
Parth’s 20% strategy isn’t about catching tops or bottoms. It’s about understanding momentum, operator activity, and using a blend of moving averages and RSI to enter smartly, when everyone else is either unsure or distracted.
What struck me the most wasn’t the setup itself — it was the patience, discipline, and deep understanding of how stocks behave during accumulation and profit booking.
No fancy indicators. No magical software. Just smart observation and experience.
In an era where people jump into options trading or intraday chaos chasing quick bucks, Parth’s approach is a reminder — swing trading, if treated like a business, can be just as powerful.
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