How to trade Commodities - Gold, Silver, Crude Oil, Natural Gas

[myamit]

Hi AMit...i am looking for a purely mechanical system which i can teach my younger brother...i have developed one...want to compare with the existing ones.....

yes it would be great if you can share details of your system....let's see if things can be improved...though 500% returns are more than sufficient....

Hello Kamlesh,

Let me give you brief of my system. Please understand that I've created this system with following in mind...
- minimum number of trade
- tight SL & little wider trail
- to be traded in nifty future with 30 min TF

System framework
------------------
I use three EMA (FastAvg, SlowAvg, StopAvg).
Cross of FastAvg & SlowAvg defines uptrend
Cross of SlowAvg & FastAvg defines downtrend
SL is 25 points & Trail SL is 70 points

Entry Rules
-----------
1. Primary entry at the cross of FastAvg & SlowAvg
2. Re-entries can be done on different conditions...
If exited due to scale-out than re-enter when price touches FastAvg
If exited due to SL or Trail than re-enter at the cross of FastAvg & StopAvg with certain conditions

Exit Rules
----------
1. If SL or Trail is hit on candle close basis (with a small exception on first candle of the day)
2. If Price moves (again closing basis) to far from mean (i.e. FastAvg) (scale-out)


Pyramiding (optional)
--------------------
You can add position once trend is flowing in your favor.
Adding position at touch of FastAvg (with certain conditions)
Adding position at touch of StopAvg (with few conditions)

Exit rules remain same for conservative trader
Exit can be splited for aggresive trader (not recommended)


Filters / Delayed entries (optional)
---------------------------------
I'm still working on this. However initial experiments suggests that VWAP will be very handy to decide whether or not to take a trade. Or delay the entry till VWAP works in our calculated range.


Improvement possibilities
------------------------
Avoiding whipsaw is my priority. System has produced 105 trades in last 18 months. However I've certain days where system has generated 3 trades & all wrong. You can atlest avoid 30 trades that as a human you may have not taken. But as I wanted to keep this 100% mechanical, I'm trying to find out mechanical solution to avoid this.

System Statistics
-----------------
Total trades : 105 (in last 18 months )
Successful trades 40
Wrong trades : 64
Currently in buy mode (trade is open)

Initial capital : 100,000 (to cover margin for 2 lots + M2M if any)
Current capital : 581280 (no pyramiding, strictly trading 2 lots only)

Do let me know if you need more details. Please find trade list for last 18 months here.

Regards,
-------------------
Also for those who wish to know evoluation process, please visit http://www.traderji.com/commodities/commodities/advanced-tra...potential.html
Please note that this was early days for this sytem & lot has changed after that. But you may get base AFL & other details from there.

 

[nicktrader]

Hello kamleshji,

UMB failed SL hit.

CMP copper 3.747.

 

[myamit]

Hello Kamlesh,

Let me give you brief of my system. Please understand that I've created this system with following in mind...
- minimum number of trade
- tight SL & little wider trail
- to be traded in nifty future with 30 min TF

Here is a snapshot of my trading system with all signals defined & also action message window for easy viewing.

Please find trade list for last 18 months here.

Also for those who wish to know evoluation process, please visit http://www.traderji.com/advanced-tr...-crossover-system-huge-earning-potential.html

Please note that this was early days for this sytem & lot has changed after that. But you may get base AFL & other details from there.

 

[uttamkamlesh]

Hello kamleshji,

UMB failed SL hit.

CMP copper 3.747.

yes..........

 

[uttamkamlesh]

Here is a snapshot of my trading system with all signals defined & also action message window for easy viewing.

Man...your system is very good....i liked your discipline and acceptance of win-loss ratio in the system....we don't need to be correct too many times in trading if we have a plan and money management.....above it all you did it....i am happy to see your success.....

well...which EMAs you are trading.....i hope when you find time prepare one PDF of your system and trades....which indicators are being used etc...etc...

well mine is based on EOD....entry at candle close time...'ll discuss after practicing it for few months.....

 

[uttamkamlesh]

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[myamit]

Man...your system is very good....i liked your discipline and acceptance of win-loss ratio in the system....we don't need to be correct too many times in trading if we have a plan and money management.....above it all you did it....i am happy to see your success.....

well mine is based on EOD....entry at candle close time...'ll discuss after practicing it for few months.....

Hello Uttam,

On a similar topic, there is one more system (again 100% mechanical) that can be traded intra-day. I'm not the original developer but made quite a few enhancements. Original work can be found here

Again this system is for Nifty future.
Base idea is opening range break-out.

Highlight of this system is that you do not need charting software or any extra tool. You do not need to watch screen. Infact you can place an order at 9:45 & forget for the rest of the day. It is so simple & convinent.

Simple steps are...

1. Take Nifty future high & low for first 30 minutes.
2. Place buy order at High + 1 & sell order at Low - 1
3. Once order is excuted ideally other order will serve as stoploss.
4. However SL needs to be changed if opening range is too big or small (anything less than 10 or higher than 50) -- One can work on SL formula depending upon personal risk profile.
5. Trail your profit with 45 point trail SL. Again if your broker is not supporitng trail sl order than forget this. This is not very important for this system.
6. Close your position at 3:29 (if not stopped out earlier)

Note: If trade has not executed in first 3 hours than do not trade for the day.

So max risk here is 50 (if ORB is that big) but mostly it is in range of 20.

To my surprise, win - loss remains almost equal with max 7 wins in a row or max 8 loss in a row (for last 18 months). Again this has generated 300% capital appreciation over last 18 months.

Possible improvements
---------------------
Pyramiding, Scal-in & out etc.
Variable initial position size depending upon initial range (or SL)

 

[NTrader42]

Hi Amit

I read through your whole thread, great work man.

Specially liked the posts by AW, will need to visit them again.

Thanks
NT

 

[mdrafi67]

Here is a snapshot of my trading system with all signals defined & also action message window for easy viewing.

Please find trade list for last 18 months here.

Also for those who wish to know evoluation process, please visit http://www.traderji.com/advanced-tr...-crossover-system-huge-earning-potential.html

Please note that this was early days for this sytem & lot has changed after that. But you may get base AFL & other details from there.

hi Amitji,
good work.............I appreciate ur every effort and great dedication ..................good learnings for all of us................thank you...keep going............

MR

 

[VJAY]

Dear Amit,
please Post your afl here...I think you made many changes from inetial one...