Once again Turtle Soup ..
- Thread starter anup
- Start date
Dear Rangrajan & Rkkarnaniji
whenever I trade, I try to check the logic behind the trade. the authors had a sound logic as they knew of a set of traders who were managing big funds, would take their positions on a 20 day breakout. it was also common knowledge that trendfollowers do not have more than 30% of their trades profitable and they are most susceptible on the first day of their trade. the idea was to fade these traders, build up a position when the market goes against them becos at some time these traders would also come back to cover their positions (at 1 N I suppose ) which would furthar fuel the market on your side.
this premise is no longer valid and hence I had stated that probably any breakout failure of a high or low can be traded whether it be few days old or be it a 3 month old.
but practically this is difficult to manage, and also trying to stick to the topic of the thread, let us take the 20 days case only.
first we look upon the logic behind the trade. the market trades for roughly 20 days in a month. therefore we are trying to fade the failure of a breakout or breakdown of 1 month high or low. now one month is a significant time period. taking a hypothetical example, if nifty breaches its 1 month low , it may not stop at just 5-10 Rs below that low, it may go down by 30-40 Rs. below that low. now if the initial Sl is 30- 40 Rs. and I aim for a 40-45 Rs. profit in the trade, there is no way possible that I can make money in the long run. I will have a few good trades, a few bad ones and the result after 6 months wd be 'breakeven.'
my experience in the market says, that if I do not give a chance to my profitable trades to run in the market, there is no way possible I can make decent money except while I am scalping.
on the first page of this thread, in the rules posted by Anup, the authors clearly state that they intend the positions to run for a few hours to a few days.
now comes the part of how to let the profitable trades run. one simple method could be a trailing SL. the turtles calculated their N (measure of volatility) on daily charts, u could probably do so on hourly charts (since urs is a very short term trade) and follow it with a trailing SL .If u are afraid of gap ups or gap downs in overnight trades, u can manage that with right position sizing.
If u insist that it has to be strictly an intraday trade, a possible way could be, once the momentum is on ur side, trade the way ST has shown in his thread 'thoughts on day swing trading' using 5 min. charts (maybe he could elaborate furthar here), this way probably u could also get a chance to increase ur position on low risk.
admittidly many of ur slightly profitable trades may become or scratch trades or small loosers the way I am suggesting, but in my mind I am very clear that it will be those 15-20% of trades that give u (relatively) bumper profits, which would actually make a difference after a 6 month time period.
regards
whenever I trade, I try to check the logic behind the trade. the authors had a sound logic as they knew of a set of traders who were managing big funds, would take their positions on a 20 day breakout. it was also common knowledge that trendfollowers do not have more than 30% of their trades profitable and they are most susceptible on the first day of their trade. the idea was to fade these traders, build up a position when the market goes against them becos at some time these traders would also come back to cover their positions (at 1 N I suppose ) which would furthar fuel the market on your side.
this premise is no longer valid and hence I had stated that probably any breakout failure of a high or low can be traded whether it be few days old or be it a 3 month old.
but practically this is difficult to manage, and also trying to stick to the topic of the thread, let us take the 20 days case only.
first we look upon the logic behind the trade. the market trades for roughly 20 days in a month. therefore we are trying to fade the failure of a breakout or breakdown of 1 month high or low. now one month is a significant time period. taking a hypothetical example, if nifty breaches its 1 month low , it may not stop at just 5-10 Rs below that low, it may go down by 30-40 Rs. below that low. now if the initial Sl is 30- 40 Rs. and I aim for a 40-45 Rs. profit in the trade, there is no way possible that I can make money in the long run. I will have a few good trades, a few bad ones and the result after 6 months wd be 'breakeven.'
my experience in the market says, that if I do not give a chance to my profitable trades to run in the market, there is no way possible I can make decent money except while I am scalping.
on the first page of this thread, in the rules posted by Anup, the authors clearly state that they intend the positions to run for a few hours to a few days.
now comes the part of how to let the profitable trades run. one simple method could be a trailing SL. the turtles calculated their N (measure of volatility) on daily charts, u could probably do so on hourly charts (since urs is a very short term trade) and follow it with a trailing SL .If u are afraid of gap ups or gap downs in overnight trades, u can manage that with right position sizing.
If u insist that it has to be strictly an intraday trade, a possible way could be, once the momentum is on ur side, trade the way ST has shown in his thread 'thoughts on day swing trading' using 5 min. charts (maybe he could elaborate furthar here), this way probably u could also get a chance to increase ur position on low risk.
admittidly many of ur slightly profitable trades may become or scratch trades or small loosers the way I am suggesting, but in my mind I am very clear that it will be those 15-20% of trades that give u (relatively) bumper profits, which would actually make a difference after a 6 month time period.
regards
For the ones interested and would like to keep track... the following is the list of stocks that have given TS+1 entry with a entry filter of half daily range.
This is a result of Exploration for the past three days. Some entries, like Dena Bank, have hit stops, where as some seem to have potential, like aptech, where as some are unsure, like Sail.
Pls point out any errors so that the code can be corrected. Code has not discarded SL hits.
PS: If entry be placed at HOD break, instead of half ATR, then most of the SL hits could have been avoided. Interesting.
This is a result of Exploration for the past three days. Some entries, like Dena Bank, have hit stops, where as some seem to have potential, like aptech, where as some are unsure, like Sail.
Pls point out any errors so that the code can be corrected. Code has not discarded SL hits.
PS: If entry be placed at HOD break, instead of half ATR, then most of the SL hits could have been avoided. Interesting.
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