M6 - Man, Mind, Money, Markets, Method & Madness

[DSM]

KarunaKumari had created a thread on Nial Fuller's 150 and 365 EMA. I had posted my response there. (copying below)

http://www.traderji.com/general-trading-investing-chat/93258-nial-fuller-150-365-ema.html


O.k I checked up regards this strategy, and here's what I gather. Time frame is 1 hour. So, its pretty much difficult to plot 180 and 365 EMA on a standard charting platform - I use TradeTiger. However, I did try to do some 'jugaad' to understand what the screen would look like. Here's the shortcut.

Trading hours = 8 (approx)
EMA 365 and 150 are around 45 and 18 EMA respectively. (Have used SMA)
Now have tried to apply the logic of EMA's (as it makes sense to me) -
If the 18 EMA < 45 EMA, short every pullback.
If 18 EMA > 45, its buy only.

There are a very few trades triggered, and some trades can be held on for months together. The best entries are when both 18 and 45 EMA's and price are close together.

If somebody had an AFL that could find the validity of this setup it would be great, but on the face of it, looks very promising. Screenshot of recent chart attached.

Subsequently, decided to look up the charts. (While I think that as such there is no 'magical SMA's and EMA's' - All work sometimes and may outperform each other at different times), I think that at a stage where there is confluence of the EMA's and price in close proximity, a good trade can be triggered. Somebody with AFL can work it out, but seems interesting ideas, which can be mostly EOD trades swing trades.

Posting some charts here :

 

[amitrandive]

KarunaKumari had created a thread on Nial Fuller's 150 and 365 EMA. I had posted my response there. (copying below)

http://www.traderji.com/general-trading-investing-chat/93258-nial-fuller-150-365-ema.html

Subsequently, decided to look up the charts. (While I think that as such there is no 'magical SMA's and EMA's' - All work sometimes and may outperform each other at different times), I think that at a stage where there is confluence of the EMA's and price in close proximity, a good trade can be triggered. Somebody with AFL can work it out, but seems interesting ideas, which can be mostly EOD trades swing trades.

Posting some charts here : [/B]

As you rightly said , there is no magical combination of EMA or SMA crossover.An EMA or SMA crossover with a higher time frame is always better for positional or swing trading.

Think you can post the request for AFL in Happy Singh's thread.

 

[DSM]

Thanks Amit.... Am not using Amibroker (still)..... so AFL will not help me. Having said that regards MA crossovers, RSP Vinod is posting his trades basis the 315 strategy on crude, which seems quite profitable..... Since I too trade crude, will check it out thru TradeTiger.

BTW, the most popular and active thread on the forum is 315 crossover strategy of : TradeWithTheHunter. Though I did read couple of post there, have not follow it. So maybe 315 has something..... that we have to discover

As you rightly said , there is no magical combination of EMA or SMA crossover.An EMA or SMA crossover with a higher time frame is always better for positional or swing trading.

Think you can post the request for AFL in Happy Singh's thread.

 

[amitrandive]

Thanks Amit.... Am not using Amibroker (still)..... so AFL will not help me. Having said that regards MA crossovers, RSP Vinod is posting his trades basis the 315 strategy on crude, which seems quite profitable..... Since I too trade crude, will check it out thru TradeTiger.

BTW, the most popular and active thread on the forum is 315 crossover strategy of : TradeWithTheHunter. Though I did read couple of post there, have not follow it. So maybe 315 has something..... that we have to discover

DSM

Santosh2010 has suggested a slightly modified 315 system.You may want to check that out too.:thumb:

http://www.traderji.com/technical-a...shs-315-strategy-santhosh2010.html#post950837

 

[jetking]

. Now the learning that I gather this : After entry, a trade is not working out, and is at a level of say 50% SL. Should we stay into the trade or exit? Another is still if in favour of the trade, to give it a bit of 'wriggle room' to work out. For e.g if I have an MTM of -1.2K with an initial SL of 3K. So what should I do in this case? Wait for another 1.8K hit? Of all the trading wisdom that we have gathered, we know that we must : Cut losses when small. But this contradicts another that : We must follow our rules. Which one should take precedence? On reflection, I think this is the one approach that I would consider : If the MTM is -1.2K, why not give it some room, to work out. A figure that I find is reasonable is 50% extra in terms of price to work out. So with the MTM -1.2K, I allow 50% more i.e Rs. 600 i.e modified SL @ 1.8K (saving 1.2K - about 66% of SL) Is this the right approach? Wondering....

: Be rigid with rules, flexible with targets.

@ DSM
thanks for above post,
this is the way one should go to improve himself
regarding trade not going in favour of us,i can tell my way of doing
for a positional trade the initial SL is always a little away to give some room enough to protect my capital in case of any abnormal movt
but when the trade goes in wrong direction and it comes at 50% of my SL,than it is the time to re assess the trade
i ask only one question to myself,
........if i have to open a fresh position at this point,which position i would take?
and will follow the answer

 

[amitrandive]

@ DSM
thanks for above post,
this is the way one should go to improve himself
regarding trade not going in favour of us,i can tell my way of doing
for a positional trade the initial SL is always a little away to give some room enough to protect my capital in case of any abnormal movt
but when the trade goes in wrong direction and it comes at 50% of my SL,than it is the time to re assess the trade
i ask only one question to myself,
........if i have to open a fresh position at this point,which position i would take?
and will follow the answer

DSM and Jetking

The above discussion gives rise to another important question.With the nature of today's fast markets should you not trail a Stop loss?
If yes what are the important considerations behind trailing a stop loss?

 

[DSM]

Thanks Amit, What RSV Vinod is following along with 25 EMA seems to work and filter noise. Let's observe, track and trade it first.... later we can see if anything else needs to be done for filtering.....

DSM

Santosh2010 has suggested a slightly modified 315 system.You may want to check that out too.:thumb:

http://www.traderji.com/technical-a...shs-315-strategy-santhosh2010.html#post950837

 

[DSM]

Thanks Jetking.... good point.... As the great traders have said, the important thing is to play great defence.... another said, we always assume that our initial position is wrong (unless it comes into profit).

If the trade moves against us, then surely, our reading of the market is possibly wrong..... and it is better to protect capital, keep losses small.... Also your idea of reassessing the trade if at 50% SL (for entry at that level) is just great!! :thumb::thumb::thumb:

@ DSM
thanks for above post,
this is the way one should go to improve himself
regarding trade not going in favour of us,i can tell my way of doing
for a positional trade the initial SL is always a little away to give some room enough to protect my capital in case of any abnormal movt
but when the trade goes in wrong direction and it comes at 50% of my SL,than it is the time to re assess the trade
i ask only one question to myself,
........if i have to open a fresh position at this point,which position i would take?
and will follow the answer

 

[DSM]

Good point Amit,

The question to ask is : Do we want to be right, or do we want to make money? If we want to be right, or proved right, we will hold on to the position even if it is going against us, till the SL is hit. If we want to make money, we will quickly exit the losing position... without a second thought or finding analysis or reason to stay in the position. I think trading ultimately comes down to the following rule : Stay in the position if it is making money, else, exit.

Guess traders who make pots of money do so because they use this one clear yardstick : Is the trade is making money?.... They do not worrying if they are right or wrong, or if their analysis, trendline, MA, Fibonacci, Wolf Wave etc. is correct or not!

DSM and Jetking

The above discussion gives rise to another important question.With the nature of today's fast markets should you not trail a Stop loss?
If yes what are the important considerations behind trailing a stop loss?

 

[Happy_Singh]

One more thing to ponder upon . . .

How frequently should you allow the rules to be changed . . .?

What burden of proof do you impose upon yourself, before you do that?

The emotions involved in the last few trades are v extreme,
and the force/impulse to change coming out of them is too strong . . .

One of the fallacies is that normally the current ongoing experience is given far too much of importance over the overall statistically derived results . . .

Cheers

Happy