Intraday profit system

[Debarghya Mukherjee]

plz explain whether rsi should be above/below or equal to 70/30 to buy/sell, and if at crossover rsi is not that level, then afterwards should enter or not?


i experienced 2 big problems with ma's crossover system SPECIALLY IN INTRADAY MARKET-

1. trading in whipsaw market, tight range market and good range market with heavy volatility.

2. EXIT. as it can even make a profitable trade a losing one.

Nice question. Let me answer you,
You see moving averages can not work alone. You must use other indicators to identify high probability trade. You must judge the trend, then the momentum of the trend, then take any trend. There is no system that works 100% right. But you must use all the resources you got to take any trade.
Whipsaw can be avoided in MA cross over system only by using proper money management system, and right indicators.

 

[Debarghya Mukherjee]

In my absence many of you posted here. And discussed about stock trading. Thank you all for your active participation.

 

[4xpipcounter]

SB2000, that is why, essentially, crossovers do not work. They have no way of telling you when the market is about to whipsaw.
About 30% of the time markets travel north or south. OTT, they travel east. So, 70% of the time you will spend getting whipsawed out of trades. DM made a good point. He was referring to confluences.

Another point is a MA is just that. It is the average of x amount of candles. It is the state of equilibrium. That is actually where price action is most comfortable at. When prices drifts too far away from that state of equilibrium, then you have the strong trendy moves.
One point of oscillators is that they lag. They follow price action. In using them price action has to be intuited before the move.
Anyone can correct me if I am wrong, but I have never seen a system that yields consistent results based on oscillators and MA's

After saying that, I don't want to sound like I am challenging you, but I would be curious for you to post a trading opportunity on one of your crossovers oscillator combos. I'm asking you for a live demonstration, because it is so easy to point to something after the move.

Crossover system does not work perfectly in a whipsaw kind of a market, however, that is where we use RSI and Slow STochastics. But a combination of cross-over coupled with oscillators, would take care of the whipsaws. However, it would still work fansatically well, when playing for 5-10 points movement/trade.

 

[prst]

SB2000, that is why, essentially, crossovers do not work. They have no way of telling you when the market is about to whipsaw.
About 30% of the time markets travel north or south. OTT, they travel east. So, 70% of the time you will spend getting whipsawed out of trades. DM made a good point. He was referring to confluences.

Another point is a MA is just that. It is the average of x amount of candles. It is the state of equilibrium. That is actually where price action is most comfortable at. When prices drifts too far away from that state of equilibrium, then you have the strong trendy moves.
One point of oscillators is that they lag. They follow price action. In using them price action has to be intuited before the move.
Anyone can correct me if I am wrong, but I have never seen a system that yields consistent results based on oscillators and MA's

After saying that, I don't want to sound like I am challenging you, but I would be curious for you to post a trading opportunity on one of your crossovers oscillator combos. I'm asking you for a live demonstration, because it is so easy to point to something after the move.

to put ur post in simple words, we should use indicators and oscillators "only" as an additional tool to support our price action analysis but most of the times we tend to do it the other way round..

 

[vikrit]

Nice question. Let me answer you,
You see moving averages can not work alone. You must use other indicators to identify high probability trade. You must judge the trend, then the momentum of the trend, then take any trend. There is no system that works 100% right. But you must use all the resources you got to take any trade.
Whipsaw can be avoided in MA cross over system only by using proper money management system, and right indicators.

you are right. but can you tell me what is your exit strategy for your system or any other system. in this thread you didnt mention any planned exit strategy. (if i missed any plz tell).

basically my points was-
1. when you are trading live with moving average systems you cant tell whether next 10 candle go no where but give you 5-10 points loss with rmoving averages showing trade is right, direction are good. as 4xpipcounter said "that is why, essentially, crossovers do not work.They have no way of telling you when the market is about to whipsaw."
please suggest some indicators or any strategy to avoid whipsaw.

2.and about exit. why exit is so important for me at least b/c it is not only imp for booking profit from trade or save your capital from bad trade but also if you dont exit you will NOT or CANT enter again as per AVERAGE crossover system. and may be you miss entry or sometimes half of very good momentum, while last trade ended up some profit or no profit or bitter one i.e. loss.

plz dont mind i am not saying your system or every crossover system or anybody's system is bad. i am just telling what i found while trading or testing. may be ur system is good, i am just curious how it is working in these times, how you are tackling these situations with this sytem?

what i said all applies for day trading or intraday. but in intraday it is more problematic.
secondly as i have read everywhere, in this forum also system should have rules or triggers or at least systematic guidelines, so while trading you will not get confuse and there will be no space for guessing. otherwise it is not a proper system.

i appreciate everybody's effort here :thumb:. i will be really obliged if anybody can explain these things or will give some solution either for crossover or anything.
attaching chart to explain using 1st post strategy. if anything wrong plz tell.

 

[blackberry]

you are right. but can you tell me what is your exit strategy for your system or any other system. in this thread you didnt mention any planned exit strategy. (if i missed any plz tell).

basically my points was-
1. when you are trading live with moving average systems you cant tell whether next 10 candle go no where but give you 5-10 points loss with rmoving averages showing trade is right, direction are good. as 4xpipcounter said "that is why, essentially, crossovers do not work.They have no way of telling you when the market is about to whipsaw."
please suggest some indicators or any strategy to avoid whipsaw.

2.and about exit. why exit is so important for me at least b/c it is not only imp for booking profit from trade or save your capital from bad trade but also if you dont exit you will NOT or CANT enter again as per AVERAGE crossover system. and may be you miss entry or sometimes half of very good momentum, while last trade ended up some profit or no profit or bitter one i.e. loss.

plz dont mind i am not saying your system or every crossover system or anybody's system is bad. i am just telling what i found while trading or testing. may be ur system is good, i am just curious how it is working in these times, how you are tackling these situations with this sytem?

what i said all applies for day trading or intraday. but in intraday it is more problematic.
secondly as i have read everywhere, in this forum also system should have rules or triggers or at least systematic guidelines, so while trading you will not get confuse and there will be no space for guessing. otherwise it is not a proper system.

i appreciate everybody's effort here :thumb:. i will be really obliged if anybody can explain these things or will give some solution either for crossover or anything.
attaching chart to explain using 1st post strategy. if anything wrong plz tell.

In this crossover game non of the initiated price action made profit....this is the beauty of cross over alone...every time after cross down we are in loss...

 

[ambarish123]

deb try adding rsi to ur system. i have noted that if MA&RSI agree with each other the entry can give u huge profit for eg in mininifty yesterday the rsi was climbing from morning till 13:49 which resulted in chopy movement even though our base trend was down.but at around 1339-1349 rsi reversed and also the EMAS crosed for a short which resulted in a near 100 pt decline from 5152 to 5069.

p.s this is only my small observation i am no technical specialist.seniors pls correct if its wrong

 

[ambarish123]

nd also is it safe to buy once the price moves above 39sma in 1 min tf if rsi agrees

 

[Debarghya Mukherjee]

My Dear Ambarish,
Thank you for commenting here. Yes RSI is useful. Even I have used it along with MA system. Any user can use use it for better filtering his trade when using MA/EMA cross over. But I prefer to stay with longer time frame than 1 Min. 5 Min will be better I think.

deb try adding rsi to ur system. i have noted that if MA&RSI agree with each other the entry can give u huge profit for eg in mininifty yesterday the rsi was climbing from morning till 13:49 which resulted in chopy movement even though our base trend was down.but at around 1339-1349 rsi reversed and also the EMAS crosed for a short which resulted in a near 100 pt decline from 5152 to 5069.

p.s this is only my small observation i am no technical specialist.seniors pls correct if its wrong

 

[vikrit]

In this crossover game non of the initiated price action made profit....this is the beauty of cross over alone...every time after cross down we are in loss...

blackberry,

can u suggest something for intraday?