First of all I like to thanks my friend Srinivasan Lakshminarayanan(sln1941) for encouraging me for this post. I was hesitating to post my system here. Because I was not sure whether it will be good to post system here or not, because I am new in trading. I am following Indian stock market for last 2-3 years, before I jumped up in market with real market. Market always gave me thrill to be part of it. I made wining trades as well as loosing trades. But Most of time I lost money because I have followed others advice for success. Once I decided to leave market. Then Again I started searching and find out that TIPS destroy my money. It is better to make mistake by my own decision than losing money with others advice.
So after many searches in many websites and most importantly Traderji.com , I made my system. But as I am new to this system, I am again asking all the members to find out if this system really works or not. Because I saw 98% winning in this strategy. Even if you lose money, your winning trades will cover up.
I use Sharekhan Trade Tiger, no any other trading software. So I made back testing on this strategy manualy with last 1 months with many scripts. This strategy is not script specific.
Now enough chit-chat I made. Here is my strategy
What we need: 3 EMA, 13 EMA, 39 SMA, Stochastic(8,3,4). If anybody wants then can use MACD also, for extra confirmation.
Time Frame: 5 min time frame. If you want duaal confirmation, then use 10 min chart and 5 min. But my preliminary time frame is 5 min.
Our trigger is just like many system when 3 EMA crosses 13 EMA. I use 39 SMA as my base/trend/stop loss trigger.
Long Call:
39 SMA should be flat or incrementing. Incrementing 39 SMA is better than other flat. Now once 3 EMA cross 13 EMA from bellow, we are ready to take trade. After cross we will take position on a green body candle after the cross. Now we need to take care of strong momentum or we can catch some whipsaw. So I recommend that take position if stochastic shows reading more than 16. It is better to have value above 20 for extra confirmation. I avoid position if it decrements an coming bellow 20. Then wait for a turn.
Stop loss= Our stop loss will be above 39 SMA, and you can adjust it with your risk appetite. I use ADX for volatility calculation. But make sure that your stop loss is above 39 SMA.
Once our trade is favour of us we will increment our stop loss gradually. Only because I dont want to make my wining trade a losing trade.
Exit Policy= I dont want to exit by myself. I prefer to be in trade till that dont hit my stop loss. But is better to square off some of our trade once 3 EMA cross 39 SMA. I saw that many times 3 EMA cross make final turn of the trade and sometimes it makes short term correction of the price for better rally.
Short call:
It is just reverse of long call. Everything will remain same only this time 39 SMA will be at top and 3 EMA and 13 EMA will cross it. Stochastic must be above 16 and incrementing.
May this system looks like very similar to the system you use, I dont want to take any credit for that. I just have collected many system information and made this simple set up. I saw that this system is easy to use and it has many adjustment. Like Base trend follower 39 SMA, basic stop loss level calculation, sort term momentum recognition (3 and 39 cross).
I made back testing but I still looking for feedback from other members.
Intraday: Should we average our loses making them to profits or square it off?