Nifty Positional Trading - Super Trend Indicator
- Thread starter Cubt
- Start date
- Tags afl backtest nifty super trend
- Status
Inconsistency is the major flaw in the system. Not only this system, but any AFL based trading. 1 year u will get 4K+ points and other years around 500 points. Reason for this is that the parameters on which the indicators are generated are inconsistent over a period of time.
Solution is to trade using atleast 2 trading systems. Instead of trading with 2 lots in one system. It is better to trade with 1 lot in each one. That way if one system is going in loss the other one may fill the gap. Caveat, Both the systems may give loss in some months. But it is very rare. I would like to suggest another system to couple with Super trend , if it is not going to disturb the flow of the thread.
Solution is to trade using atleast 2 trading systems. Instead of trading with 2 lots in one system. It is better to trade with 1 lot in each one. That way if one system is going in loss the other one may fill the gap. Caveat, Both the systems may give loss in some months. But it is very rare. I would like to suggest another system to couple with Super trend , if it is not going to disturb the flow of the thread.
If one is able to improve the end result with any system/s, it's good. If you want to share, it's great & so kind of you:thumb:. For the benefit of all, may be u can start a new thread for ur system. Looking forward it......
Inconsistency is the major flaw in the system. Not only this system, but any AFL based trading. 1 year u will get 4K+ points and other years around 500 points. Reason for this is that the parameters on which the indicators are generated are inconsistent over a period of time.
Solution is to trade using atleast 2 trading systems. Instead of trading with 2 lots in one system. It is better to trade with 1 lot in each one. That way if one system is going in loss the other one may fill the gap. Caveat, Both the systems may give loss in some months. But it is very rare. I would like to suggest another system to couple with Super trend , if it is not going to disturb the flow of the thread.
Solution is to trade using atleast 2 trading systems. Instead of trading with 2 lots in one system. It is better to trade with 1 lot in each one. That way if one system is going in loss the other one may fill the gap. Caveat, Both the systems may give loss in some months. But it is very rare. I would like to suggest another system to couple with Super trend , if it is not going to disturb the flow of the thread.
...i used with 2 lot entry & 1/2 book @ 1st targt ...then too its given almost 17K loss without slippage....so i think there is missing consistency though its only 2 month BT
Biggest drawback of any mechanical system is it trades all the markets with same logic/parameters. So if it is a trend trading method, it will make money in trends but loose the same in sideways choppy phase. Inspite of this drawback some methods make money because the money made in trends is more than the money lost in sideways phase and the losses are small and profits are larger. But this can be achieved by adds when we are in trends.
But if the conditions change and the sideways period is for prolonged period and with large amplitudes and trends are short and small, then the method will loose money over that data sample/period .And if the system does not add in trends, then it will generate poor returns in that period
The ideal is trade different methods to suit 2 different types of markets, trending and sideways. And when a trader is able to quickly recognise the shift from trends to sideways and back to trends, he will do much better .
Just wrote a few lines from my own search of a mechanical system. I am not against a mechanical system at all...but these are the drawbacks which a trader must understand fully.
Smart_trade
But if the conditions change and the sideways period is for prolonged period and with large amplitudes and trends are short and small, then the method will loose money over that data sample/period .And if the system does not add in trends, then it will generate poor returns in that period
The ideal is trade different methods to suit 2 different types of markets, trending and sideways. And when a trader is able to quickly recognise the shift from trends to sideways and back to trends, he will do much better .
Just wrote a few lines from my own search of a mechanical system. I am not against a mechanical system at all...but these are the drawbacks which a trader must understand fully.
Smart_trade
Rightly said msa......I tryed many afl method earlier ...its all looks good in current levels....but when I started backtest its not given consistency in trading which is must be need to survive in trading....now today I completed bar by bar backtest this method jan& feb of 2010....if one started it those time one rarely stick with it ...i used with 2 lot entry & 1/2 book @ 1st targt ...then too its given almost 17K loss without slippage....so i think there is missing consistency though its only 2 month BT
...i used with 2 lot entry & 1/2 book @ 1st targt ...then too its given almost 17K loss without slippage....so i think there is missing consistency though its only 2 month BT
As Mod mentioned, when a system generates profits it needs to be way higher than the loss it makes during sideways market. Or we need to identify the sideways market n reduce the lot size and increase or add lot size during trending markets.
But million dollar question is how quickly one can identify in which market we are? Trending or sideways?
If there are any consistent profit generating system, then every individual/banks would have put in millions of money in mechanical system, and there wont be any activity in Traderji.com
one possibility that I use to check for potential sideways / major s/r is the daily ema band of 13....that is 13ema high and 13ema low as a band
can be use for
1. profit taking - when short you take part profit near the lows of the band...and only re-enter below the band for BD
2. caution - for e.g. if short signal is coming close to lower end of the band....take small qty or w8 for BD of band
I am not using super trend as not much into positional yet....but looking at an option for swing and was studing this....so showing it on that chart only
P.S. I use 60min band smilarly for potential intraday sideways along with VWAP range
can be use for
1. profit taking - when short you take part profit near the lows of the band...and only re-enter below the band for BD
2. caution - for e.g. if short signal is coming close to lower end of the band....take small qty or w8 for BD of band
I am not using super trend as not much into positional yet....but looking at an option for swing and was studing this....so showing it on that chart only
P.S. I use 60min band smilarly for potential intraday sideways along with VWAP range
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