OK - try to test this ...
Booking profits or exiting trades before crossover
Keep a close watch on 3 EMA ... if you see 2 consecutive days where 3 EMA has moved against your position than you exit 315 positions UNTIL you reach a day where 3 EMA start moving back again in your position.(please read carefully I am talking about 3 EMA moving and not just the price). Usually when you see 3 EMA moving against your position in two consecutive days, price will usually touch 15 EMA. This is where we can enter in positions again (ADD rule) or wait for 3 EMA to turn back in our direction to enter. Sometimes 3 EMA will not turn back and eventually crossover 15 EMA generating a new trade.
Key points to highlight again
1. 2 consective days of 3 EMA moving opposite to 315 trade- so for example if we are long... 3 EMA closes at 5000 today .. tomorrow mkt goes down and 3 EMA closes at 4995, we got our first day of opposite move. Next day if 3 EMA closes below 4995 (lets say 4990) , we exit our longs at 3.25 PM. Otherwise we just hold longs.
2. If we have exited longs as above, we have to re-enter longs when either price touches 15 EMA OR when 3 EMA closes above previous day. So in this example if 3 EMA closes back at 4995 on 4th day ..we enter longs again.
We continue to watch 3 EMA after re-entry, if we again see two down days ..we exit longs again.
I will take a live example now to explain.
11th Oct - 315 buy generated at 4982
18th Oct - Nifty makes a low and 3 EMA closes at 5076 (lower than previous days 5106)
19th Oct - Nifty moves up and 3 EMA closes at 5111 (as its above previous day we didnt get 2 consective down days ..so we hold longs)
20th Oct - 3 EMA closes at 5108 (lower than previous day - Day 1)
21 Oct - 3 EMA closes further down at 5081 (Day 2) Now we can exit longs on this day. However we also took support from 15 EMA so we can hold longs too as 15 EMA touched. But in any case we assume we exit longs here at 5054.
22nd Oct - Next day 3 EMA closes at 5095 (up from previous day). We move back in longs and re-enter at 5106
28th Oct - Nifty closes at 5386. 3 EMA not touching candle on second day too so as per 315 rules we booked longs and wait for 3 EMA touch.
31st Oct - Second day also 3 EMA not touching ..no re-entry. Please note 3 EMA is still rising.
1 Nov - Nifty closes at 5291..3 EMA touched so we re-enter longs as per 315 rules. However 3 EMA closes at 5301 which is lower than previous day. (Day 1)
2nd Nov - Nifty closes at 5280. 3 EMA closes further low at 5290 (Day 2). We exit longs again and wait for 15 EMA touch of 3 EMA uptick day.
3 Nov - Nifty at 5296, 3 EMA closes at 5296. We get our uptick day and back in longs.
9th and 11th Nov - 3 EMA down on both day ..we exit on 11th Nov at 5192
12th Nov - We get 315 crossover and we open fresh shorts.
Whilst above adds more complexities to the original strategy and also increased the number of trades per swing .... I still believe it can help booking profits at tops and bottoms in certain scenarios.
Will appreciate is someone can backtest it for last 1 year and compare results against original strategy.
cheers
SH
