Karthik's Intraday Trading using EMA & CCI

[karthik_sri]

Dear Friends,
This is my first thread opened by me in TJ after 6 years of joining to TJ. I have posted some of my Strategies in the thread opened by my fellow TJ Friends.

I have learned a lot from this forum and thought to dedicate this strategy to the TJ members as a small contribution from my side.

I have made a strategy for Intraday Trading using EMA & CCI. I will post my strategy in the comming threads.

Cheers
Karthik

 

[cooltrader66]

Hello karthik.I have been a silent admirer of your strategies.Looking forward to a crackerjack of a strategy from u.

 

[saivenkat]

No Doubt.. you are going to rock with this strategy also..

 

[moneywise]

I am eagerly awaiting to learn from your thread as I am a keen follower of all your posts. Good initiative Sir!

 

[karthik_sri]

Let's go to the strategy!!

Setup

1). Timeframe : 5min chart
2). EMA : 110 period
3). CCI : 14 days

Why EMA 110? To be frank no idea but when tested proved with results to guage the TREND!

RULE

BUY / GO LONG CONDITION

a). The 5 min candle should be above 110 EMA.
b). CCI should be > 100. We consider CCI reading only for ENTRY not for EXIT. This CCI will act as a FILTER to avoid false Traps
c). A 0.10% filter on the High price

SELL / GO SHORT CONDITION

a). The 5 min candle should be below 110 EMA.
b). CCI should be < -100. We consider CCI reading only for ENTRY and not for EXIT. This CCI will act as a FILTER to avoid false Traps
c). A 0.10% filter on the Low price

EXIT : Rs.10/- min

SL : Rs.10/- (as I want to keep RR as 1:1)

Recommended Scrips : MARUTI, AXISBANK, LT, TCS, ICICIBANK & SBI

I have tested the strategy with the above scrips and hence posted as recommendation. Why I have selected the above scrip is bacause of the highly traded volume.

I will explain in detail with the Charts

Karthik

 

[karthik_sri]

I have taken MARUTI (Futures) Intraday chart of 01.03.13.

1). The 5 min candle close above 110 EMA on 9:20 am (High 1387 & Low 1379.20)
2). The CCI reading of the touching candle is 210.20 which is > 100

The above two condition give Buy signal.

We place buy order at 1388.40 which is 0.10% over and above the high price of 1387. Why 0.10% is to filter and avoid false trade/trap.

The target is 1398.40 as am looking for Rs.10/- gain from this trade and the SL is 1377 which is Rs.10/- less from the High. Why so to keep the RR ratio 1:1

The buy order trigerred and target achieved with Rs.10/- The lot size of Maruti is 250 which will give Rs.2500/-:thumb:

http://i.imgur.com/3nrpsdM.png

We have another trade oppertunity after this Exit. Will explain you that in the comming thread.

Karthik

 

[karthik_sri]

The second trade oppertunity with MARUTI (futures) on 01.03.13

The CCI reading > 100 happened at 1:20pm 5 min candle. The 5 min candle is above 110 EMA. The High is 1411.35 & Low 1406.30

We place buy order at 1412.80 (with 0.10% filter) and SL will be 1401.35. The target is 1422.80 (1412.80 + 10). The target achieved with profit of Rs.2500/-:thumb:

http://i.imgur.com/NmdRu0y.png

In total we had Rs.5000/- profit with 1 lot with 2 trade oppertunity on 01.03.13.

1st Trade: http://i.imgur.com/3nrpsdM.png
2nd Trade: http://i.imgur.com/NmdRu0y.png

If you look at the chart you may see the CCI reading has sometimes raised above 100 (i.e >100) between 11:15 am to 01:10pm but there was no trade. Why so? I will explain in the comming thread!

Karthik

 

[karthik_sri]

In the same MARUTI (Futures) as I said in the previous post the CCI was > 100 but we didnt trade or we didnt get the trade oppertunity because of the 0.10% filter. I have attached the charted and the CCI > 100 is circled with yellow.

When the condition of EMA & CCI is met the 0.10% filter is must and this condition to be applied to each and every candle.

http://i.imgur.com/nHeY6Kd.png

Karthik

 

[karthik_sri]

I have attached 5 min Intraday chart of TCS (Futures) of 27.02.13. We can see the first rule of 5 min candle closing above/below or moving above/below EMA 110. But the CCI acted as a good filter (refer the arrows in the chart) and u can see there was no trading oppertunity and if we got the oppertunity the 3rd filter of 0.10% didnt met. If you look at the chart the whole day the market was in SIDEWAYS movement and CCI & 0.10% acted as a good filter and kept us in SAFE during this SIDEWAYS movement!

http://i.imgur.com/vz5QZF4.png

 

[cooltrader66]

Is there any reason for selecting only high priced scrips?Can this strategy be applied on lower priced scrips like bhel,bharti,ranbaxy etc.?