A Moving Average Trading System

[rkkarnani]

THANKS
IT IS VERY GOOD SYSTEM
I BACKTESTED this system BY
NIFTY EOD DATA FROM 2000 TO 2009
It gives excellent result.

anand karuparthi

Its a big hard work to analyses for such a long period......:clapping:

If you are comfortable, and the results are collated in some spreadsheet, many members including me would be happy to have a look at the Trades!!!
If posting, do share the "Rules" by which the Analysis was done by you!!
Thanks.

 

[anandksn]

Hello Anand,

Are you using 3-13-39 for Day Trading? I thought it is more for position trading and we can hold positions for a few days. The testing in Nifty for 2000 to 2009 also must have been as a position trader. Can you kindly clarify.

regards

Rajeev

Now I am using this system for INTRA DAY of NIFTY FUTURES with 10 min. data
It gives 30 points on 01-04-2010
thanks
anand karuparthi

 

[anandksn]

Hello Anand,

Are you using 3-13-39 for Day Trading? I thought it is more for position trading and we can hold positions for a few days. The testing in Nifty for 2000 to 2009 also must have been as a position trader. Can you kindly clarify.

regards

Rajeev

rajeev,
I am doing the backtest this system by using NFTY EOD.(day wise data)
it gives excellent result.
Now
I am doing the backtest this result on the year 2009 jan to 2010 march.
Our capital becomes 25 times.Assume NIfty futres 10% margin.
Surely this is very excellent system for INTRADAY 10 MIN CHART and
NFITY EOD
You may use icharts.in for charts.

regards
anand karuparthi

 

[Karanm]

I have observed couple of things i would like to know if someone has tried this and what are the results. if the opening price and high price is the same then the u could take ashort position in the stock and if open price and low is the same then we could take a long positions but u need to wait for 10 mins after market opens. ur stop loss could be high in first case and low in second case.

Any other observations like this, kindly inform in detail.
Thanks
Karanm

 

[trade man]

will u please post me charts so tht i can understand ur stretegy.

 

[Karanm]

It is not necessary to change the MA for volatile stocks like Infosys, Satyam, etc.

This is a robust trading system and works well with volatile stocks also.

See attached daily chart of Infosys with trading signals of 3x13=39 trading system.

Sir, there are no charts attached, Kindly attach.
Regards
Karanm

 

[Nehal_s143]

I want to address a question commonly asked by investors and traders new to technical analysis and trading systems, "What is a good simple system to follow, to get in and out of markets?".

Most people are comfortable with the herd, market rumours, broker tips, etc. But by confirming your trading decision with the help of this trading system, you will be on the way to more profitable trading.

This simple and robust trading systems will not only identify trends, but will also provide you with entry and exit trading signals.

The Trading System

Remember the numbers 3 x 13 = 39

Simple daily moving averages of 3,13 and 39 can keep you in and out of markets fairly efficiently and profitably, (in any time frame actually). Here's how.

Some basic principles to understand are:

-The market moves in long (secular) trends.
-Intermediate trends can last for months to years.
-Short term trends can last for days to weeks.
-Trade intermediate trends in either direction.
-Trade short term trends only in the direction of the intermediate trend.

Proxies:

3 Day MA - a proxy for price
13 Day MA - a proxy for the short term trend (a moving trend line)
39 Day MA - a proxy for the intermediate trend (a moving trend line).

The Basics of MAs

MAs lag market reversals at tops and bottoms, the larger the MA the longer the lag period, the shorter the MA the shorter the lag but the more frequent the whipsaws. MAs work well when markets trend but get frequently whipsawed when they are in a range.

Therefore, trade trends with the MAs but do not trade ranges using MAs. Just stand aside and be patient until a new trend emerges.

The intermediate trend is in the direction of the 39 MA which acts like a moving trend line. If the 39 MA is pointing up then the intermediate trend is up, if down the trend is down. If the 39 MA is horizontal the market is in a range, from which a trend will, sooner or later, emerge.

Simple Trading Rules

1. When the 39 MA is moving up buy when the 3 MA crosses up over the 13 MA. and/or when the 3 MA crosses above the 39 MA.. When the 13 MA crosses above the 39 MA consider adding to your long position. Exit and stand aside when the 3 crosses back below the 13 MA..

2. When the 39 MA is moving down sell short when the 3 MA crosses below the 13 MA. and/or when the 3 MA crosses below the 39 MA.. When the 13 MA crosses below the 39 MA consider adding to your short position. Exit and stand aside when the 3 MA crosses back up over the 13 MA.

3. Only initiate trades in the opposite direction of the intermediate trend when the 3 MA crosses above or below the 39 MA, preferably after the 39 MA has already changed direction.

4. This 3:13 MA crossover will keep you trading in the trend with only a small lag and on the sidelines during corrections. The lag only becomes more substantial at reversals of the intermediate trend (a 3:39 crossover), a small price to pay at these uncertain times of trend transition.

You can set your technical analysis sofware to show bar charts with these 3X13x39 simple MAs. This trading system will help you select the best traders while avoiding the less profitable trades in choppy markets.

Hi can you explain how to identify range bound market so that we can remain sideways during range

 

[Rajeevji]

Re: Excel File for 3-13-39 (Nifty)

Dear Friends

i hve prepared an excel file for trading nifty based on 3-13-39 system. File can be downloaded from link below:

http://www.savefile.com/files/739076

I have also put a filter of 5 MA for longs so that u dont have to wait for 3 to go all the way down to 13 for closing ur longs. (However, it may give whipsaws, so it is suggested that one gradually cut longs once 3MA goes below 5MA ...).

3-13-39 can be changed to 5-10-20 or any other, as per one's comfort. Explanation is given on final sheet...

Problem of "delays" is also solved since live data is plotted along with EoD !

Hope the file is useful. IF you are able to make money from this excel file, do contribute Rs 500 per month for charitable purposes like UNICEF or CRY and make this world a better place, at least for kids ...

A query: is it possible to have mixed live and EoD in metastock ? i want to see live candle as an EoD (As in the excel sheet) in Metastock, so that this sheet can be replicated in Metastock (anyone made a metastock expert / indicator for it ??) ...

reg
ketan

Hello Ketan,

Are you still in this forum. I want to see that excel you had developed for this 3-13-39 as I am unable to automate the changes to other MA's.

regards

Rajeev

[email protected]

 

[Rajeevji]

Re: Excel File for 3-13-39 (Nifty)

Dear Friends

i hve prepared an excel file for trading nifty based on 3-13-39 system. File can be downloaded from link below:

http://www.savefile.com/files/739076

I have also put a filter of 5 MA for longs so that u dont have to wait for 3 to go all the way down to 13 for closing ur longs. (However, it may give whipsaws, so it is suggested that one gradually cut longs once 3MA goes below 5MA ...).

3-13-39 can be changed to 5-10-20 or any other, as per one's comfort. Explanation is given on final sheet...

Problem of "delays" is also solved since live data is plotted along with EoD !

Hope the file is useful. IF you are able to make money from this excel file, do contribute Rs 500 per month for charitable purposes like UNICEF or CRY and make this world a better place, at least for kids ...

A query: is it possible to have mixed live and EoD in metastock ? i want to see live candle as an EoD (As in the excel sheet) in Metastock, so that this sheet can be replicated in Metastock (anyone made a metastock expert / indicator for it ??) ...

reg
ketan

Hello Ketan,

Are you still in this forum. I want to see that excel you had developed for this 3-13-39 as I am unable to automate the changes to other MA's.

regards

Rajeev

[email protected]

 

[bipinbk]

I want to address a question commonly asked by investors and traders new to technical analysis and trading systems, "What is a good simple system to follow, to get in and out of markets?".

Most people are comfortable with the herd, market rumours, broker tips, etc. But by confirming your trading decision with the help of this trading system, you will be on the way to more profitable trading.

This simple and robust trading systems will not only identify trends, but will also provide you with entry and exit trading signals.

The Trading System

Remember the numbers 3 x 13 = 39

Simple daily moving averages of 3,13 and 39 can keep you in and out of markets fairly efficiently and profitably, (in any time frame actually). Here's how.

Some basic principles to understand are:

-The market moves in long (secular) trends.
-Intermediate trends can last for months to years.
-Short term trends can last for days to weeks.
-Trade intermediate trends in either direction.
-Trade short term trends only in the direction of the intermediate trend.

Proxies:

3 Day MA - a proxy for price
13 Day MA - a proxy for the short term trend (a moving trend line)
39 Day MA - a proxy for the intermediate trend (a moving trend line).

The Basics of MAs

MAs lag market reversals at tops and bottoms, the larger the MA the longer the lag period, the shorter the MA the shorter the lag but the more frequent the whipsaws. MAs work well when markets trend but get frequently whipsawed when they are in a range.

Therefore, trade trends with the MAs but do not trade ranges using MAs. Just stand aside and be patient until a new trend emerges.

The intermediate trend is in the direction of the 39 MA which acts like a moving trend line. If the 39 MA is pointing up then the intermediate trend is up, if down the trend is down. If the 39 MA is horizontal the market is in a range, from which a trend will, sooner or later, emerge.

Simple Trading Rules

1. When the 39 MA is moving up buy when the 3 MA crosses up over the 13 MA. and/or when the 3 MA crosses above the 39 MA.. When the 13 MA crosses above the 39 MA consider adding to your long position. Exit and stand aside when the 3 crosses back below the 13 MA..

2. When the 39 MA is moving down sell short when the 3 MA crosses below the 13 MA. and/or when the 3 MA crosses below the 39 MA.. When the 13 MA crosses below the 39 MA consider adding to your short position. Exit and stand aside when the 3 MA crosses back up over the 13 MA.

3. Only initiate trades in the opposite direction of the intermediate trend when the 3 MA crosses above or below the 39 MA, preferably after the 39 MA has already changed direction.

4. This 3:13 MA crossover will keep you trading in the trend with only a small lag and on the sidelines during corrections. The lag only becomes more substantial at reversals of the intermediate trend (a 3:39 crossover), a small price to pay at these uncertain times of trend transition.

You can set your technical analysis sofware to show bar charts with these 3X13x39 simple MAs. This trading system will help you select the best traders while avoiding the less profitable trades in choppy markets.

great findings.