Linkon's Day trading Strategy...!

[linkon7]

I have been trying to develop a system for some time now.

I have been experimenting with Ichimuku to simple ema cross over to very complex systems like Kwikpop and other recommended systems by friends and well wishers. Somehow, when i back tested them, all system gave beautiful results. Very high strike rate for most system. But when it came to execution of these systems, things fell flat on the face.

The problem was not with the systems. It was with myself. Unless i developed a system i can fully rely on, i wont be able to feel the comfortable holding on to a trade. There will always be fear or greed or hope. I cant dehuman myself. Then the only way out is to keep it simple and stupid. Something that i can trade without thinking.

System tells me loud and clear with blue bars to buy and with red bars to sell and tells me where to place my stoploss. So all i have to do is go through the motion of trade like a machine and law of average will take care of the profit. No discretion - no brain work.

My system

Its a trend following system. Its built on ema of 5,13,21,34,55 and 89. They are the Fibonacci numbers that play a very vital role on our trading life. These ema form the cloud that tells me if the trend is bullish or bearish.

I have plotted at 25 ema of the HIGH and LOW and this acts as my entry trigger and my stoploss.

If prices trade above the 89 ema (of the close) then it's considered bullish and conversely, if it trades below the 89 ema then its bearish.

The rules are :

ENTRY

LONG : close of the bar is above the band and above 89 ema.
Trailing Stoploss : lower band or 89 ema (if you are in deep profit and you want to ride the whole trend.)

Target : ride till stoploss is hit.

Visual indication : The cloud is blue and the bar is blue.


SHORT : close of the bar is below the band and below 89 ema.
Trailing Stoploss : upper band or 89 ema (if you are in deep profit and you want to ride the whole trend.)

Target : ride till stoploss is hit.

Visual indication : The cloud is red and the bar is red.

Time frame : any time frame. I prefer 2 min.

 

[linkon7]

Confirmation Tool:

We use the Guppy Multiple Moving Average (GMMA) as confirmation of the direction. This whole system is an adaptation of the guppy moving average.

The Guppy Multiple Moving Average (GMMA) indicator tool is based on the relationships between groups of moving averages.

Each group of averages in the GMMA provides insight into the behavior of the two dominant groups in the market - traders and investors.

The indicator allows the trader to understand the market relationships shown in the chart and so select the most appropriate trading methodology and the best tools.

The GMMA is designed to understand the nature of trend activity on an end of day, or intraday basis.

The inferred activity of traders is tracked by using a group of short term moving averages.

The traders always lead the change in trend.

Their buying pushes up prices in anticipation of a trend change. Their activity is shown by a 3, 5, 8, 10, 12 and 15 day group of exponentially calculated moving averages.

The trend survives only if other buyers also come into the market. Strong trends are supported by long term investors. The investor takes more time to recognize the change in a trend but he always follows the lead set by traders.

We track the investors' inferred activity by using a group of long term moving averages. This group is 30, 35, 40, 45, 50 and 60 day exponentially calculated moving averages.

The relationship within each of these groups tells us when there is agreement on value - when they are close together and when there is disagreement on value - when they are well spaced apart.

When we combine multiple moving averages, a short term group and a long term group, we can see when the market has reached an agreement about the value of the stock.

This can be used to understand the strength of the trend. Sustained activity of the short term averages above the long term group confirms a strong trend. The short term group will fluctuate, but while the long term group is in a steady band it suggests long term support.

Signs of a weakening of the trend are when both groups of averages begin to narrow down and fluctuate more than is normal given their past recent activity. If both groups converge towards a crossover, then a trend reversal is signalled.

The relationship between the two groups tells the trader about the strength of the market action.

A change in price direction that is well supported by both short and long term investors signals a strong trading opportunity.

The crossover of the two groups of moving averages is not as important as the relationship between them.

 

[linkon7]

Amibroker code for the system

_SECTION_BEGIN("Linkon's Day Trading System");


icol = IIf ( MA (Close,25) > Ref (MA (Close,25),-1),colorGreen,colorRed);

Plot( MA( High, 25 ),"", icol, styleThick);
Plot( MA( Low, 25 ), "",icol, styleThick);

Color_buy = IIf(Close > EMA(Close,89) AND Close > EMA(High,25),colorBlue,IIf(Close < EMA(Close,89) AND Close < EMA(Low,25),colorRed,colorYellow));

PlotOHLC( Open, High, Low, Close, "", Color_buy, styleCandle ); 
_SECTION_END();

 
_SECTION_BEGIN("EMA fabonachi");

fab5 = EMA(Close,5);
fab8 = EMA(Close,8);
fab13 = EMA(Close,13);
fab21 = EMA(Close,21);
fab34 = EMA(Close,34);
fab55 = EMA(Close,55);
fab89 = EMA(Close,89); 

Color_fab5 = IIf(Close > fab5,ColorRGB(197,254,214),colorPink);
Color_fab8 = IIf(Close > fab8,ColorRGB(197,254,214),colorPink);
Color_fab13 = IIf(Close > fab13,ColorRGB(197,254,214),colorPink);
Color_fab21 = IIf(Close > fab21,ColorRGB(197,254,214),colorPink);
Color_fab34 = IIf(Close > fab34,ColorRGB(197,254,214),colorPink);
Color_fab55 = IIf(Close > fab55,ColorRGB(197,254,214),colorPink);
Color_fab89 = IIf(Close > fab89,ColorRGB(197,254,214),colorPink);

Plot( fab89, "", Color_fab89, styleDashed ); 
_SECTION_END();
dist = 0.25*ATR(10); 
Capital=Param("Total capital",100000,10000,1000000,1000);
drawdown=Param("Max. loss per trade as % of Capital", 1.0,0.5,25.0,0.1);
room=Param("Room for S/L as % of Pivot value",0.001,0.001,0.02,0.001);

PH= ValueWhen(
(Ref(H,-2) > Ref(H, -4)) AND
(Ref(H,-2) > Ref(H, -3)) AND
(Ref(H,-2) > Ref(H, -1)) AND
(Ref(H,-2) > H), Ref(H,-2));

PL= ValueWhen(
(Ref(L,-2) <= Ref(L, -4)) AND
(Ref(L,-2) <= Ref(L, -3)) AND
(Ref(L,-2) <= Ref(L, -1)) AND
(Ref(L,-2) <= L), Ref(L,-2));

phfilter=PH+(room*PH);
plfilter=PL-(room*PL);

//Plot(Ref(PH,2), "UpPivot", ParamColor("UpPivot Color",colorGreen), styleDashed);
//Plot(Ref(PL,2), "DownPivot",ParamColor("DownPivot Color",colorRed), styleDashed);

/*

for (a=4;a<BarCount;a++)
{
if ((H[a-2] >= H[a-4]) AND
(H[a-2] >= H[a-3]) AND
(H[a-2] >= H[a-1]) AND
(H[a-2] >= H[a]))
PlotText("PH \n"+H[a-2], a-2, H[a-2], colorGreen);

if ((L[a-2] <= L[a-4]) AND
(L[a-2] <= L[a-3]) AND
(L[a-2] <= L[a-1]) AND
(L[a-2] <= L[a]))
PlotText("PL \n"+L[a-2], a-2, L[a-2]-dist[a-2], colorRed);
}
*/

_SECTION_END();


_SECTION_BEGIN("fabo cloud");

Lo = IIf (fab89>fab55,fab55,fab89);
Hi = IIf (fab89<fab55,fab55,fab89);
PlotOHLC(Lo,Hi,Lo,Hi,"",Color_fab89, styleNoLabel |  styleCloud);

Lo1 = IIf (fab55>fab34,fab34,fab55);
Hi1 = IIf (fab55<fab34,fab34,fab55);
PlotOHLC(Lo1,Hi1,Lo1,Hi1,"",Color_fab55, styleNoLabel | styleCloud);

Lo2 = IIf (fab34>fab21,fab21,fab34);
Hi2 = IIf (fab34<fab21,fab21,fab34);
PlotOHLC(Lo2,Hi2,Lo2,Hi2,"",Color_fab34, styleNoLabel | styleCloud);

Lo3 = IIf (fab21>fab13,fab13,fab21);
Hi3 = IIf (fab21<fab13,fab13,fab21);
PlotOHLC(Lo3,Hi3,Lo3,Hi3,"",Color_fab21, styleNoLabel | styleCloud);

Lo4 = IIf (fab13>fab8,fab8,fab13);
Hi4 = IIf (fab13<fab8,fab8,fab13);
PlotOHLC(Lo4,Hi4,Lo4,Hi4,"",Color_fab13, styleNoLabel | styleCloud);

Lo5 = IIf (fab8>fab5,fab5,fab8);
Hi5 = IIf (fab8<fab5,fab5,fab8);
PlotOHLC(Lo5,Hi5,Lo5,Hi5,"",Color_fab8, styleNoLabel | styleCloud);

_SECTION_END();




Title = EncodeColor(colorWhite)+ "LINKON'S DAY TRADING SYSTEM" + " - " +  Name() + " - " + EncodeColor(colorRed)+ Interval(2) + EncodeColor(colorWhite) +
 "  - " + Date() +" - "+"Op-"+O+"  "+"Hi-"+H+"  "+"Lo-"+L+"  "+ "Cl-"+C+"  "
+ "\n"
+ "Vol= "+ WriteVal(V) +WriteIf ( V > MA(V,26) ,EncodeColor(colorGreen)+"  UP "+ (V/MA(V,26))*100 + " %", EncodeColor(colorRed)+"  DOWN "+ (V/MA(V,26))*100 + " %")
+ EncodeColor(colorGreen)+   "\n Pivot High : "+ EncodeColor(colorWhite)+PH
+EncodeColor(colorGreen)+ "  Place LONG    Trigger at :"
+EncodeColor(colorWhite)+ WriteIf(MA (H, 25) > EMA(C, 89), WriteVal(MA(H,25)),WriteVal(EMA(C,89))) 
+ EncodeColor(colorGreen)+ "   Trailing SL of :"+ EncodeColor(colorWhite)+EMA(L,25) 

+ EncodeColor(colorRed)+ "\n Pivot  Low : "+EncodeColor(colorWhite)+PL+EncodeColor(colorRed)+"  Place SHORT Trigger at :"+ EncodeColor(colorWhite)+WriteIf(MA (L, 25) < EMA(C, 89), WriteVal(MA(L,25)),WriteVal(EMA(C,89))) + EncodeColor(colorRed)+"   Training SL of :"+ EncodeColor(colorWhite)+EMA (H,25)
;

 

[linkon7]

Amibroker code for guppy

//TimeFrameSet( in1Minute*3 ); 
pldot = (H + L + C ) / 3;

Colorpldot = IIf(pldot > Ref(pldot,-1), colorAqua,colorOrange);
pldot1 = (Ref(pldot,-1)+Ref(pldot,-2)+Ref(pldot,-3))/3;

plhigh = (Ref(H,-1)+Ref(H,-2)+Ref(H,-3))/3;
pllow = (Ref(L,-1)+Ref(L,-2)+Ref(L,-3))/3;

Plot (pldot, "mean", Colorpldot, styleThick);
//Plot (plhigh, "top", colorYellow, styleDashed);
//Plot (pllow, "bottom", colorYellow,styleDashed);
Buy1 = Close > pldot1
AND Open > pldot1;
Sell1 = Close < pldot1
AND Open < pldot1;
//PlotShapes (Buy1 * shapeHollowSmallCircle, colorBlue);
//PlotShapes (Sell1 * shapeHollowSmallCircle, colorRed);

Buy = Cross(pldot,EMA( High, 89 ));
Sell = Cross(EMA( Low, 89 ),pldot);

PlotShapes (Buy * shapeUpTriangle, colorWhite);
PlotShapes (Sell * shapeDownTriangle, colorWhite);
 
//TimeFrameRestore();


_SECTION_BEGIN("guppy"); 
/*The Guppy Multiple Moving Average (GMMA) indicator tool is based on the relationships between groups of moving averages. 
Each group of averages in the GMMA provides insight into the behavior of the two dominant groups in the market - traders and investors. 
The indicator allows the trader to understand the market relationships shown in the chart and so select the most appropriate trading methodology and the best tools. 
The GMMA is designed to understand the nature of trend activity on an end of day, or intraday basis.

The inferred activity of traders is tracked by using a group of short term moving averages. 
The traders always lead the change in trend. 
Their buying pushes up prices in anticipation of a trend change. 
Their activity is shown by a 3, 5, 8, 10, 12 and 15 day group of exponentially calculated moving averages. 

The trend survives only if other buyers also come into the market. 
Strong trends are supported by long term investors. 
The investor takes more time to recognize the change in a trend but he always follows the lead set by traders. 
We track the investors' inferred activity by using a group of long term moving averages. 
This group is 30, 35, 40, 45, 50 and 60 day exponentially calculated moving averages. 


The relationship within each of these groups tells us when there is agreement on value - when they are close together 
and when there is disagreement on value - when they are well spaced apart.

When we combine multiple moving averages, a short term group and a long term group, 
we can see when the market has reached an agreement about the value of the stock. 
This can be used to understand the strength of the trend. Sustained activity of the short term averages above the long term group confirms a strong trend. 
The short term group will fluctuate, but while the long term group is in a steady band it suggests long term support.

Signs of a weakening of the trend are when both groups of averages begin to narrow down 
and fluctuate more than is normal given their past recent activity. If both groups converge towards a crossover, then a trend reversal is signalled.

The relationship between the two groups tells the trader about the strength of the market action. 
A change in price direction that is well supported by both short and long term investors signals a strong trading opportunity. 
The crossover of the two groups of moving averages is not as important as the relationship between them.

*/

_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));

SetChartBkColor( colorBlack ) ;
MaxGraph = 12;
/* blue lines */
Graph0= EMA( Close, 3 );
Graph1= EMA( Close, 5 );
Graph2= EMA( Close, 7 );
Graph3= EMA( Close, 10 );
Graph4= EMA( Close, 12 );
Graph5= EMA( Close, 15 );
Graph0Style = Graph1Style = Graph2Style = Graph3Style =Graph4Style =Graph5Style = styleNoLabel;
Graph0Color = Graph1Color = Graph2Color = Graph3Color =Graph4Color =Graph5Color = 6;

/* red lines */
Graph6= EMA( Close, 30 );
Graph7= EMA( Close, 35 );
Graph8= EMA( Close, 40 );
Graph9= EMA( Close, 45 );
Graph10= EMA( Close, 50 );
Graph11 = EMA( Close, 60 );
Graph6Style = Graph7Style = Graph8Style =Graph9Style =Graph10Style = Graph11Style = styleNoLabel;
Graph6Color = Graph7Color = Graph8Color =Graph9Color =Graph10Color = Graph11Color = 4;

/*
 BFastPer=EMA(C,Optimize("BFastPer",5,5,50,1));
BSlowPer=EMA(C,Optimize("BSlowPer", 15,15,60,3));
Buy = Cross(BFastPer, BSlowPer);

SFastPer=EMA(C,Optimize("SFastPer",15,15,60,1));
SSlowPer=EMA(C,Optimize("SSlowPer",24,24,90,3));
Sell = Cross(SSlowPer,SFastPer);

PlotShapes(Buy*shapeUpArrow,colorBlue);
PlotShapes(Sell*shapeDownArrow,colorRed);
*/

Upmove = Graph0>Graph1 AND Graph0 > Graph2 AND Graph0>Graph3 AND Graph0>Graph11;

downmove = Graph0<Graph1 AND Graph0 < Graph2 AND Graph0<Graph3 AND Graph0<Graph11;


upmoveresume= Cross (Graph0, Graph5) AND Graph5>Graph6;
downmoveresume= Cross (Graph5,Graph0) AND Graph5<Graph6;

//PlotShapes(Upmove*shapeSmalldots,colorGreen);
//PlotShapes(downmove*shapeSmallCircle,colorRed);
PlotShapes(upmoveresume*shapeHollowUpArrow,colorYellow);
PlotShapes(downmoveresume*shapeHollowDownArrow,colorWhite);
_SECTION_END();

 

[linkon7]

As of now, we will ignore the arrows and triangle. They are a work in progress about the median of the high low and close.

I wanted to remove them, but they provide some good indication.

Just remember, Buy the blue candles and sell the red candles. Out of 5 trades, 3 might hit SL and 2 gives profit, but the average profit on those 2 will be huge as this system is a trend following one.

On choppy days, i prefer to trade in 1 min or 2 min time frame. On nice trending days, i prefer 5 min TF....

 

[md_mu]

GMMA tool not available in religare's race pro.......

 

[rajendrani]

Congratulation on making your own system. God helps them who helps themselves, very rightly said by our older generation. I had seen your thread where you were working on building up a new system and finally you made it, there are plenty people who go for it but never ends making one, but you did it bro. Keep it up.

Regards,
Rajendrani

 

[linkon7]

Congratulation on making your own system. God helps them who helps themselves, very rightly said by our older generation. I had seen your thread where you were working on building up a new system and finally you made it, there are plenty people who go for it but never ends making one, but you did it bro. Keep it up.

Regards,
Rajendrani

I am still very new at this... Your help and feedback will be very much appreciated. Thanks...!

 

[Shreenath]

Linkon,
I'm studying your trading plan and trying to understand it.

In the meanwhile, I'm curious to know a couple of things.

1. Could you please define the guppy moving average? I believe this is an Australian called Darryl Guppy; did he come up with this moving average?

2. Also, below on the ambibroker code, you have the concept of pl dot.Is it also Guppy's work or someone else's?
Thanks so much
Shreenath

Confirmation Tool:


We use the Guppy Multiple Moving Average (GMMA) as confirmation of the direction. This whole system is an adaptation of the guppy moving average.

The Guppy Multiple Moving Average (GMMA) indicator tool is based on the relationships between groups of moving averages.

Each group of averages in the GMMA provides insight into the behavior of the two dominant groups in the market - traders and investors.

The indicator allows the trader to understand the market relationships shown in the chart and so select the most appropriate trading methodology and the best tools.

The GMMA is designed to understand the nature of trend activity on an end of day, or intraday basis.

The inferred activity of traders is tracked by using a group of short term moving averages.

The traders always lead the change in trend.

Their buying pushes up prices in anticipation of a trend change. Their activity is shown by a 3, 5, 8, 10, 12 and 15 day group of exponentially calculated moving averages.

The trend survives only if other buyers also come into the market. Strong trends are supported by long term investors. The investor takes more time to recognize the change in a trend but he always follows the lead set by traders.

We track the investors' inferred activity by using a group of long term moving averages. This group is 30, 35, 40, 45, 50 and 60 day exponentially calculated moving averages.

The relationship within each of these groups tells us when there is agreement on value - when they are close together and when there is disagreement on value - when they are well spaced apart.

When we combine multiple moving averages, a short term group and a long term group, we can see when the market has reached an agreement about the value of the stock.

This can be used to understand the strength of the trend. Sustained activity of the short term averages above the long term group confirms a strong trend. The short term group will fluctuate, but while the long term group is in a steady band it suggests long term support.

Signs of a weakening of the trend are when both groups of averages begin to narrow down and fluctuate more than is normal given their past recent activity. If both groups converge towards a crossover, then a trend reversal is signalled.

The relationship between the two groups tells the trader about the strength of the market action.

A change in price direction that is well supported by both short and long term investors signals a strong trading opportunity.

The crossover of the two groups of moving averages is not as important as the relationship between them.

 

[Mangafreakz]

Nice thread Linkon da. Also provide EOD chart after u trade using this Strategy. :thumb: