Nifty 8DMA plus minus trading stratagy

[suri112000]

@ Jetking Good to see you query...

On 11th shorted nifty below 8086,,, on 12sep nifty made a high of 8014 but we are remain shorted because it was just spike not even sustain for 1-2 min abv 8013. lets wait if it convincingly moves abv 8015

For tomorrow 8DMA is 8091 so initiate your fresh short position below it!!! target comes near 9021 maintain stop at 8118.

sspagro,

So, the SL should be not in system. Say the price hovered around 8012 for about 1-2 minutes, and a bull took the price away from SL within a minute or so by about 20 points, aren't we missing the SL exit and reversing the trade to long at appropriate price. We can see about 50 points upside/downside move in nifty within 2 minutes. For example, on 18/9/2014 at 9:40 am the nifty moved 50 points upwards within 2 minutes. How are we going to act in those situations.

 

[sspagro]

sspagro,

So, the SL should be not in system. Say the price hovered around 8012 for about 1-2 minutes, and a bull took the price away from SL within a minute or so by about 20 points, aren't we missing the SL exit and reversing the trade to long at appropriate price. We can see about 50 points upside/downside move in nifty within 2 minutes. For example, on 18/9/2014 at 9:40 am the nifty moved 50 points upwards within 2 minutes. How are we going to act in those situations.

As i already said in strategy 30-35 % sl hits and tat too we recover when reverse our position. Means most of the trade we manage to make money.... My result sheet says there is exceptional case when it is difficult to reverse trade in short period of time. So dnt worry just keep trading bro

 

[rh6996]

sspagro,

So, the SL should be not in system. Say the price hovered around 8012 for about 1-2 minutes, and a bull took the price away from SL within a minute or so by about 20 points, aren't we missing the SL exit and reversing the trade to long at appropriate price. We can see about 50 points upside/downside move in nifty within 2 minutes. For example, on 18/9/2014 at 9:40 am the nifty moved 50 points upwards within 2 minutes. How are we going to act in those situations.

As I also as a rule do not trade without a SL in place, it was suggested to me to keep a deeper SL and exit if the close is above the original SL level, i.e. to say :
We are Long and SL is at below 8066 ! We keep a deeper SL at 8040, we are out if it is hit, however if market closes at below 8066 ! Ofcourse the person who said this is trading Options based on similar strategy hence he has to bear lower price movement!

 

[gkpc]

As I also as a rule do not trade without a SL in place, it was suggested to me to keep a deeper SL and exit if the close is above the original SL level, i.e. to say :
We are Long and SL is at below 8066 ! We keep a deeper SL at 8040, we are out if it is hit, however if market closes at below 8066 ! Ofcourse the person who said this is trading Options based on similar strategy hence he has to bear lower price movement!

Good to know people who do not trade without SL ! Yes its important to have a SL in place at all times.

However in this case a SL cannot be kept in place how so ever deep as the trade is based on Nifty Spot level! If NS breaches the SL level and stays breached for ~ 2 minutes then a Trade order is given to Stop and reverse ! Moreover as the strategy involves taking home positions, the risk of adverse gap is always there.
Comforting thing is that the initiator of this strategy has confidence on it and historically he has had not more than 35% loosers and the loss being recovered on reversing the trade !

 

[suri112000]

This strategy reminds of a strategy which I used to trade on Nifty futures a while back.

If its not out of topic to discuss about it, I would elucidate the details below.

On first day of the month, I wait for five minutes candle to close. If the candle is green I go long. SAR is thirty way down. For every thirty points gain I move the SAR along the trade. I continue like wise till end of the month. Now, the question is how to tackle Gaps in favour and Against the SAR. Gaps in favour are easy to handle and that does not require explanation. Gap against SAR. The movement you realize the Gap is against the SAR close the trade immediately at whatever price it is available. Now, the next trade is to be initiated at SAR levels whenever it hits. For example, the price is 5220. and the SAR is 5270. Next day, the price opened at 5290. That is against the SAR. So, I close the trade and wait for next SAR it. If the price hits 5270 I go short with SAR at 5300. Or if price hits 5300 I go long with SAR at 5270. I used to gain at the end of the month. Check it out yourselves to gain confidence.

 

[rh6996]

This strategy reminds of a strategy which I used to trade on Nifty futures a while back.

If its not out of topic to discuss about it, I would elucidate the details below.

On first day of the month, I wait for five minutes candle to close. If the candle is green I go long. SAR is thirty way down. For every thirty points gain I move the SAR along the trade. I continue like wise till end of the month. Now, the question is how to tackle Gaps in favour and Against the SAR. Gaps in favour are easy to handle and that does not require explanation. Gap against SAR. The movement you realize the Gap is against the SAR close the trade immediately at whatever price it is available. Now, the next trade is to be initiated at SAR levels whenever it hits. For example, the price is 5220. and the SAR is 5270. Next day, the price opened at 5290. That is against the SAR. So, I close the trade and wait for next SAR it. If the price hits 5270 I go short with SAR at 5300. Or if price hits 5300 I go long with SAR at 5270. I used to gain at the end of the month. Check it out yourselves to gain confidence.

Though I dont find any similarity in this and your strategy but never the less yours is an interesting way of trading.
When you say first day of the month, are you referring to Derivative Month or Calendar Month?
In this strategy of yours we need to track it full time. Right?
When the first candle is green you go long when : Immediately on close of the candle or on breach of high of the candle?
SAR and T-SAR is from your entry levels : Is the following correct?
Long at 7690 SAR 7660
Move up 7720 SAR 7690
Move up 7745 SAR 7690
Move Up 7750 SAR 7720
If SAR hit, we Enter SHORT
Short at 7720 SAR 7750

 

[rh6996]

Gap against SAR. The movement you realize the Gap is against the SAR close the trade immediately at whatever price it is available. Now, the next trade is to be initiated at SAR levels whenever it hits. For example, the price is 5220. and the SAR is 5270. Next day, the price opened at 5290. That is against the SAR. So, I close the trade and wait for next SAR it. If the price hits 5270 I go short with SAR at 5300. Or if price hits 5300 I go long with SAR at 5270. I used to gain at the end of the month. Check it out yourselves to gain confidence.

In the above example :
We are short ! Our SAR at 5270.
Market opens up with a Gap at 5290. We exit asap say at 5300 though market opened at 5290 but due to fast move we could exit only at 5300.
How do we calculate our next SAR? From the Open price or our exit price?
Could not understand how we got 5300 level as going Long point in your example? Please elaborate a little whenever you get time.

 

[suri112000]

Though I dont find any similarity in this and your strategy but never the less yours is an interesting way of trading.
When you say first day of the month, are you referring to Derivative Month or Calendar Month?
In this strategy of yours we need to track it full time. Right?
When the first candle is green you go long when : Immediately on close of the candle or on breach of high of the candle?
SAR and T-SAR is from your entry levels : Is the following correct?
Long at 7690 SAR 7660
Move up 7720 SAR 7690
Move up 7745 SAR 7690
Move Up 7750 SAR 7720
If SAR hit, we Enter SHORT
Short at 7720 SAR 7750

When you say first day of the month, are you referring to Derivative Month or Calendar Month?
Its Calender Month.

In this strategy of yours we need to track it full time. Right?
yes

When the first candle is green you go long when : Immediately on close of the candle or on breach of high of the candle?
I go long immediately on close of the candle.

SAR and T-SAR is from your entry levels : Is the following correct?
SAR levels and movement is correct.

 

[suri112000]

In the above example :
We are short ! Our SAR at 5270.
Market opens up with a Gap at 5290. We exit asap say at 5300 though market opened at 5290 but due to fast move we could exit only at 5300.
How do we calculate our next SAR? From the Open price or our exit price?
Could not understand how we got 5300 level as going Long point in your example? Please elaborate a little whenever you get time.

If you exit your trade within first 3 minutes, consider that to be correct exit.

In the above example, you exited exactly at 5300 which is SAR and where you are supposed to go long as per opening. Immediately go long as well. In case you miss long at 5300 you go long at whatever price it is available. Say you went to long at 5308 (because of fast movement) now the SAR for long remains at 5270 but not at 5300. When the price moves in favour and reaches 5330 you move your SAR to 5300.

In case you went long at 5292 (because the price touched long SAR at 5300), the SAR for long remains at 5270.

Hope it clarifies.

 

[sabharwal_RK]

You would be crucified with both the strategies if you use them during range bound months.

Moving average strategies tend to whip you apart.

Having said that if you are making money and backtested and I am not going to dicourage you at all, all tactics dont work for all...

Whips would kill, just eyeball historical charts.

Is there any way to avoid multiple whips?