Friends,
Inspired by Nadodavs Nifty Future Mechanical Trading, Saints 60 min flow and miniflow trading one more trading technique has come into my mind which I named Intraday Micro Flow Trading Method.
Here I am going to present the core concept.
We will start our trading exactly how we start trade in Saints Mini Flow. But once we are in trade we will shift our SAR as the trade goes in our direction.
I guess this will be good if I can explain it with example. It goes like this, suppose the first 5 min bar high is 2500 and low 2450. We noted the high and low.
High = 2500 so Long above 2500+14=2514
Low = 2450 so Short below 2450-14=2436
Now suppose we get the trade at 2514 (Long), from here on we will not consider miniflow methods rather switch to microflow method with SAR at 2514-37=2477. The main advantage of this method is of its simplicity without considering pivots, false breakout and all. Let me illustrate it how it goes. As the trade progresses in our direction and nifty moved to 2520 we move the SAR at 2520-37=2483 from initial 2477. So from now onwards we will move the SAR as nifty hits the high. Again nifty cools a bit and hit 2540 we shift the SAR to 2540-37=2503. So as the trade progresses and Nifty hits now high we shift the SAR by 37 points. Now what if we hit the SAR. Simple we reverse to Short. And add 37 points to our entry and make it as new SAR. Suppose it hit the SAR at 2530 after making high of 2567. We reverse to short at 2530 and keep 2567 as new SAR. Again say nifty goes down to 2520 then starts climbing. So when Nifty makes 2520 we move the SAR to 2520+37=2557.
Well, enough explanation, I guess. The trade moves in this way.
The Advantages:
1) Its damn simple. No confusion regarding pivots and false breakout et al.
2) Loses are minimum in a single trade.
3) We are into the flow quite early.
4) Doesnt increase our BP seeing quite high SAR. SAR is always within 37 points. So loss is max 37 points in a trade.
The Disadvantages:
1) Number of trades increases.
2) Need to monitor Nifty for new high or low quite often.
Result:
I did back test on this for the current week and found good for days where the nifty range is more than 50-60 points but performs worst in this or around this range. But still I am in the process of evaluating the performance of this method and will post as I will do the back test or trade in this method. Infact today I traded using this method and was in profit.
Here is the Todays Trades.
Trade1: Long at 2631 Stopped and reverse at 2635. Profit: 4 nifty points.
Trade2: Short at 2635 stopped and reverse at 2577. Profit: 58 nifty points.
Trade3: Long at 2577, profit booked at 2642. Profit: 65 nifty points.
Total profit: 127 points.
Great Profit for day trading. But we are not always so fortunate. Like on 20th Nov. we had worst day since it was very rage bound. But quite fortunately we generally dont have many range bound days.
Back Testing:
I already did back test for the current week and results look promising. This week end I will back test for Oct and Nov and pkatil will help me for backtesting Sep. We need volunteers for more back testing.
