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Technical Analysis Secrets: How Himanshu Sharma Makes Money By Using Charts | Kwk #178
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Aspiring retail investors and traders looking to transition from fundamental analysis to technical chart-based strategies for consistent portfolio growth.
TL;DR
Himanshu Sharma shares his journey from losing 70% of his portfolio to achieving a 43% CAGR through technical analysis. He explains his transition from a government job to full-time trading, detailing his strategies for swing and positional trading, risk management, and the importance of professional certifications like CMT.
Key Takeaways
- Initial trading failures often stem from poor position sizing and over-concentration, which can lead to significant portfolio drawdowns even when individual stock selection appears fundamentally sound.
- Successful technical analysis requires the discipline to remain in cash during weak market conditions rather than forcing trades, preserving capital for high-probability setups.
- A hybrid approach combining swing and positional trading allows investors to capture short-term gains while simultaneously riding long-term trends for maximum profit potential.
- Positional trading involves holding stocks for extended periods, often six to eight quarters, by monitoring weekly charts and maintaining positions as long as the trend remains intact.
- Technical analysis is not just about price action but also about managing psychology; selling a portion of a position during strength helps mitigate the emotional pain of missing out on further gains.
- Professional credibility in technical analysis is built through rigorous certification and membership in recognized global bodies like the CMT Association and the Society of Technical Analysts.
- Market participants should distinguish between different trading timeframes—ranging from scalping to long-term investing—and align their strategies with their specific goals and risk tolerance.
In This Video
- 00:00Portfolio Performance and Early Mistakes
Himanshu discusses his 43% CAGR journey, detailing how early mistakes wiped out 70% of his portfolio before he learned proper risk management.
- 00:21Best and Worst Investment Lessons
The speaker shares his experience with a failed micro-cap investment and how he later scaled his portfolio through disciplined stock selection.
- 00:57Understanding Basic Chart Mechanics
Himanshu explains how to interpret candlestick charts, including the significance of open and close prices for weekly market movements.
- 02:26Introduction to Technical Analysis
The episode focuses on how beginners can utilize technical analysis to generate wealth, setting the stage for a deep dive into trading.
- 06:54Swing vs. Positional Trading Strategies
The speaker defines the spectrum of trading, explaining how he combines swing and positional strategies to capture trends while managing risk.
- 09:03Credentials and Professional Background
Himanshu outlines his professional qualifications, including his CMT and MSTA certifications, establishing his credibility as a technical analyst.
Questions & Answers
What is Himanshu Sharma's overall CAGR return?
Himanshu Sharma reports an overall CAGR of approximately 43% up to 2025, achieved through technical analysis and learning from his early trading mistakes.
What was Himanshu Sharma's worst investment experience?
His worst investment was in a micro-cap company called GI Engineering Solutions. Due to issues like a GST fraud within the company, he lost nearly 70% of his portfolio value at that time.
How does Himanshu Sharma manage his trades?
He uses a combination of swing and positional trading. He typically sells 30% of his position to capture short-term gains and holds the remaining 70% as long as the trend remains intact, often using weekly charts with a 40-period moving average.
What is the difference between swing and positional trading?
Swing trading captures 20-40% moves over 10-30 days by following price formations. Positional trading involves riding a stock's trend for a longer duration, typically six to eight quarters, using weekly charts to stay invested as long as the trend holds.
What are Himanshu Sharma's professional qualifications?
He is a certified technical analyst who has completed CMT Level 3, holds a CFT from the International Federation of Technical Analysts, and is an MSTA from the Society of Technical Analysis, UK.
Key Terms
- Swing Trading — A trading strategy that attempts to capture short-to-medium-term gains in a stock over a period of a few days to several weeks.
- Positional Trading — A long-term strategy where traders hold positions for months or years, focusing on major trends rather than short-term price fluctuations.
- CAGR — Compound Annual Growth Rate, which measures the mean annual growth rate of an investment over a specified period of time longer than one year.
- Scalping — A high-frequency trading strategy that involves buying and selling stocks within minutes or seconds to profit from small price changes.
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