Linkon's guppyBB system...!

[linkon7]

lets move on to the second part of the guppy BB system...

price move in cycles. higher high - higher low for up trend and lower low lower high or down trend. So every time price makes a new cycle..we shift our trailing stop-loss according to the trend.

this is useful to gain a decent stoploss for our system..

we will use stoch for identifying the cycles. every time stochK crosses stochd.. the hiest high of the last 4 bars is our stoploss for short...and lowest low of the last 4 bars is our stoploss for longs...

 

[DanPickUp]

lets move on to the second part of the guppy BB system...

price move in cycles. higher high - higher low for up trend and lower low lower high or down trend. So every time price makes a new cycle..we shift our trailing stop-loss according to the trend.

this is useful to gain a decent stoploss for our system..

we will use stoch for identifying the cycles. every time stochK crosses stochd.. the hiest high of the last 4 bars is our stoploss for short...and lowest low of the last 4 bars is our stoploss for longs...

Maybe I missed some stuff :

We talk here about an option trading system. Is this right ?

I wonder, how you implement your option trades on this chart ?

As the indicator, like most of them are behind the market, how do you handle this problem as an option trader ? I know, you are good as a future trader and for this, you got all my respect and you know this.

You now present an option trading system and options do not work or are not the same to trade like futures. Specially when it comes to execution.

What about presenting the main problem about this system ?

DanPickUp

 

[linkon7]

Maybe I missed some stuff :

We talk here about an option trading system. Is this right ?

I wonder, how you implement your option trades on this chart ?

As the indicator, like most of them are behind the market, how do you handle this problem as an option trader ? I know, you are good as a future trader and for this, you got all my respect and you know this.

You now present an option trading system and options do not work or are not the same to trade like futures. Specially when it comes to execution.

What about presenting the main problem about this system ?

DanPickUp

You remember i started this thread keeping just 25 K as base capital and 12 K as max loss. There is no options strategy. We develop a system and take directional trade based on that system. Its as simple as it gets. Instead of buying nifty...we buy slightly OTM call. we buy otm puts when we need to go short...!

Being OTM option buyer, we are at a very big disadvantage. We need to get our bias, momentum, target, stoploss etc with as much accuracy as possible. We are attempting to time the market and that too on the buy side of OTM options... very foolish/brave thing to do....!

Anant is working on coding the system. And its very elaborate in its construction, so we have to give him time.

 

[DanPickUp]

You remember i started this thread keeping just 25 K as base capital and 12 K as max loss. There is no options strategy. We develop a system and take directional trade based on that system. Its as simple as it gets. Instead of buying nifty...we buy slightly OTM call. we buy otm puts when we need to go short...!

Being OTM option buyer, we are at a very big disadvantage. We need to get our bias, momentum, target, stoploss etc with as much accuracy as possible. We are attempting to time the market and that too on the buy side of OTM options... very foolish/brave thing to do....!

Anant is working on coding the system. And its very elaborate in its construction, so we have to give him time.

Hi linkon

Hope you do not take this discussion personal. You want to present here a system with options. It doe's not mater if itm or atm or otm. The problem will be the same.

Anant can coding what ever, the problem will be the execution with the options.

Here my critical views and comments to what I have seen until now :

Your last chart show us a short entry on a candle around 5480. The signal always comes, when the candle is closed and you know that and I know that.

Ok, now I got the signal to go short on the close of this candle. I now call my broker or even on my mechanical system, I give the order to go short. As it must be quick, I make market order. My filled will be bad and it will have a value of maybe 5470 on higher volatility as market falls down, if I am lucky or even worse.

But by 5470, your system gives a stop loss to go long. Still no idea about any volatility in the market.

I now have to give my next market order and will be again filled around 5490 ( look at your candles and there you are filled ). Volatility will be lower, as market moves up.

I just made my first loss with that system. I now have to make some money, as I lost already around 30 points IF VOLATILITY not has changed. If so, the loss will be even bigger.

Ok, now I am long with a real market price maybe around 5490 or even 5500. Now your system gives me a signal to go short by 5500. I now have to give again a market order for a sell by 5500.

What will be my filled and how much money did I win or lose with this system when I traded life options ?

If market now jumps down to 5450, my profit will be just a joke.

The system you present here will be good, like all this systems, on trending market and will be not useful on sideway markets. This post is not meant in a bad way. I just try to point and figure out the weak points in it. As far as I understood, you look for some critics in the system and I made some. Hope you do not kill me because of that.

DanPickUp

 

[linkon7]

Hi linkon

Hope you do not take this discussion personal. You want to present here a system with options. It doe's not mater if itm or atm or otm. The problem will be the same.

Anant can coding what ever, the problem will be the execution with the options.

Here my critical views and comments to what I have seen until now :

Your last chart show us a short entry on a candle around 5480. The signal always comes, when the candle is closed and you know that and I know that.

Ok, now I got the signal to go short on the close of this candle. I now call my broker or even on my mechanical system, I give the order to go short. As it must be quick, I make market order. My filled will be bad and it will have a value of maybe 5470 on higher volatility as market falls down, if I am lucky or even worse.

But by 5470, your system gives a stop loss to go long. Still no idea about any volatility in the market.

I now have to give my next market order and will be again filled around 5490 ( look at your candles and there you are filled ). Volatility will be lower, as market moves up.

I just made my first loss with that system. I now have to make some money, as I lost already around 30 points IF VOLATILITY not has changed. If so, the loss will be even bigger.

Ok, now I am long with a real market price maybe around 5490 or even 5500. Now your system gives me a signal to go short by 5500. I now have to give again a market order for a sell by 5500.

What will be my filled and how much money did I win or lose with this system when I traded life options ?

If market now jumps down to 5450, my profit will be just a joke.

The system you present here will be good, like all this systems, on trending market and will be not useful on sideway markets. This post is not meant in a bad way. I just try to point and figure out the weak points in it. As far as I understood, you look for some critics in the system and I made some. Hope you do not kill me because of that.

DanPickUp

The system kept me away from the market whole day and gave a short towards the end at 5494... gave a rentry of short at 5508..which didnt trigger... finally gave exit at 5441 for 50% of positions and carry of other 50% for today...

in terms of options...
i entered 5500 put at 30... exited 50% at 61 carried the rest for today..! which happens to be free of any risk now...

 

[linkon7]

@ dan
I love critics. simply because they highlight my grey areas. Nothing can be perfect and we have to make do with what ever little resource we have in hand.

We all know that indicators are derived from price and normally lags. we can take advantage of the indicator's ability to highlight certain areas. for example, a 15 min bar can be broken into 5 bars of 3 min... now a lagging indicator on the 3 min is actually very leading indicator on 15 min... It helps us time our entry decision.

OTM Options dont move with the same delta as the UL and when we are trading the OTM options on a 15 min TF we benefit on two acocunts. A 20 point stoploss on UL wont do much damage to option premium. But a 100 point move in our direction with give an amazing risk reward ratio....!

The reason i am waiting for anant to finish coding the system is because i want to see for myself if such a system can be coded. I am not talking of just buy - sell here. I have asked him to incorporate the money management and trade management aspect of it as well... All the decision a trader might have to take will be decided by the system. It gives the follower of the system a fighting chance of making some money as discipline will come only when he is not allowed to take a decission.

Incorporating 6 different types of days and two time frames and a few indicators and my crazy fetish for specific rules for every decision... is kind of making Anant's task of coding it very challenging. And till the time he is able to code it to my satisfaction... We have to wait and see how thing develop...

 

[linkon7]

The system kept me away from the market whole day and gave a short towards the end at 5494... gave a rentry of short at 5508..which didnt trigger... finally gave exit at 5441 for 50% of positions and carry of other 50% for today...

in terms of options...
i entered 5500 put at 30... exited 50% at 61 carried the rest for today..! which happens to be free of any risk now...

OTM Options dont move with the same delta as the UL and when we are trading the OTM options on a 15 min TF we benefit on two acocunts. A 20 point stoploss on UL wont do much damage to option premium. But a 100 point move in our direction with give an amazing risk reward ratio....!

system just gave an exit for the other 50% at 131...

point to note here is :

when we initiated the short trade with 2 lots of 5500 put @ 30... our stop loss would have been around 22-24..thats an risk of 3000 Rs with a potential loss of 800 Rs plus brokerage of another 100 Rs totalling to 900 Rs. That's a loss of almost 30% of the amount risked.

It turned out that the trade was successful and we got our first exit at 61 and the second lot exit at 131. Now the net profit after subtracting brokerage of Rs 100, is 6500 Rs, almost 217% return on amount risked.

it just means that i need 1 good trade to off set 7 bad trades...

that is amazing...

 

[nilesh53333]

linkon sir please provide afl what u r doing. it will be better for us understanding system. thank for ur effert sir.

 

[linkon7]

linkon sir please provide afl what u r doing. it will be better for us understanding system. thank for ur effert sir.

If i give you the afl the way it is...you wont understand anything...!

Waiting for Anant to complete the system... only then we can talk of the trade management...!

 

[DanPickUp]

The system kept me away from the market whole day and gave a short towards the end at 5494... gave a rentry of short at 5508..which didnt trigger... finally gave exit at 5441 for 50% of positions and carry of other 50% for today...

in terms of options...
i entered 5500 put at 30... exited 50% at 61 carried the rest for today..! which happens to be free of any risk now...

Hi Linkon

Thanks for your effort to give an answer to my post. You have proved, that the execution in your system can be handled, as this was a concern from my side. Thanks. Wish you further good success with the system

DanPickUp