Nifty 8DMA plus minus trading stratagy

[mehtaka]

I have been back testing Nifty with a simple strategy in order to find an edge in probabilities of trading. I book minimum of 200-280 points in a month. losses are small if you see risk reward ratio.

FRIST you need to see 8Day EMA on Nifty Spot EOD chart.

Let’s say if 8 Day EMA is 7500 on EOD chart so consider its buy level whenever nifty will cross 7500 from below or close above its. keep stop loss of 27 points (7500-27=7473) minimum target always 70 points (7500+70=7570).

If case stop hits just reverse your position and maintain SL as a 8 day ema (7500) minimum target is 70 points (7500-70=7430)

Fallow the same strategy for short trades. whenever nifty will crosses 8 Day ema from above keep SL 27 points and short for minimum target 70 points.

Back tested result says Stop hitting chances is 30-35% that to recovers when we reverse our trade position.

Mostly first to second day itself our 70 point target get achieved... in a month you get 4 to 5 trade opportunity.

Lets share your views

hi
can you clear one doubt..
suppose we are long on nifty and s/l of Rs.27/-is not hit but the prices cut down below 8DEMA. do we reverse the position from long to short or wait for s/l to get hit and than reverse?
thanks

 

[sspagro]

I have a couple of queries.

1. The 8 day EMA/SMA that you are quoting is different than what I am deriving.

is it based on close price or some other combination? Please elaborate.

2. How are you figuring out the BNF levels?

Regards.

First thing bnf trades are not based on 8 dma...

For nifty you have to check 8 dma on eod basis always. Go to icharts site after mkt close and check. Its so simple. For ex. Preset 8 dma for nifty spot is 7901

 

[sspagro]

hi
can you clear one doubt..
suppose we are long on nifty and s/l of Rs.27/-is not hit but the prices cut down below 8DEMA. do we reverse the position from long to short or wait for s/l to get hit and than reverse?
thanks

We reverse position only when SL hits. Its hold till then.

 

[extremist]

First thing bnf trades are not based on 8 dma...

For nifty you have to check 8 dma on eod basis always. Go to icharts site after mkt close and check. Its so simple. For ex. Preset 8 dma for nifty spot is 7901

Wht sspagro mean here by 8 DMA is 8 Day Exponential Moving Average.

mistake corrected

 

[sspagro]

Wht sspagro mean here by 8 DMA is 8 Day simple Moving Average.

Its not simple moving average. Its 8 day exponential moving average (8 day EMA)

 

[sanjoy_roy]

Wht sspagro mean here by 8 DMA is 8 Day simple Moving Average.

I beg to differ my friend, it is 8 day EMA.

Oops, reply was already given. my apologies.

 

[sspagro]

Trade levels for 16th OCT:

NIFTY:

NIFTY SPOT IS BUY ABOVE 7900 SL 7875 TGT 7970. if SL triggers just reverse your trade & short NIfty for 7830


BANK NIFTY:

BNF FUTURE IS BUY IF OPEN BETWEEN 15409 to 15566
BNF FUTURE IS SELL IF OPEN BETWEEN 15777 to 15990

Place 115 points stop loss after order execution. minimum target 100 points of your execution price. if BNF opens out of our trading range then we should avoid trade.

 

[umeshmandal]

Trade levels for 16th OCT:

NIFTY:

NIFTY SPOT IS BUY ABOVE 7900 SL 7875 TGT 7970. if SL triggers just reverse your trade & short NIfty for 7830


BANK NIFTY:

BNF FUTURE IS BUY IF OPEN BETWEEN 15409 to 15566
BNF FUTURE IS SELL IF OPEN BETWEEN 15777 to 15990

Place 115 points stop loss after order execution. minimum target 100 points of your execution price. if BNF opens out of our trading range then we should avoid trade.

Now that my Short has hit SL in BNF ! 15750 / 15865 ! Do we have any rule to reverse to cover loss as in Nifty strategy???

 

[jetking]

Now that my Short has hit SL in BNF ! 15750 / 15865 ! Do we have any rule to reverse to cover loss as in Nifty strategy???

but why did u short at 15750??????????

short was above 15777.......

moreover bnf opened at 15734, below the range

so there should be no trade as per his rules

 

[umeshmandal]

but why did u short at 15750??????????

short was above 15777.......

moreover bnf opened at 15734, below the range

so there should be no trade as per his rules

Hmm! Okay .. my mistake ! I sold it when BNF went upto 15830 and when it was coming down below 15770 I shorted it.

Okay, now after paying the "tuition fees" its clear that we need to look at the "OPEN" price to decide whether to go Long Short or stay Out !