SH's 315 Strategy - how to make it more comfortable and profitable!!

[vinst]

One sec guys, can you explain this displacement / period parameters of DMA so that I can maybe reproduce it in excel ?? Ok, I take 2 days old 3EMA as today's DMA, that's one parameter, but which one ? Is it the period or is it displacement ??

Here's 315 with 3dma (as I understood it) in excel for 2011. As you can see, there are too many whipsaws.

timepass,
for shifted MA's like dma in icharts, we should take SMA3 and then take the shift to left:

a) the dma won't have any value for last 3 days, or
b) we can have 3 days old value for today, yesterday and day-before-yesterday.

take your choice from (a) or (b)

 

[NTrader42]

Hi NTrader,

Thanks for summarizing the rules. I have a query regarding exit strategy.
As per the rule above, Exit completely if 3 EMA goes in opposite direction for 2 consecutive days.
If say i sell and next 2 days the highs go above 3 EMA, shall i exit ? Or should the candle formed be completely above 3 EMA(both highs and lows above 3 EMA).

Its not the price (high/low) but comparison of EMA values.

If holding Long and, ema3 of today is less than ema3 of yesterday and also ema3 of yesterday is less than that of day before yesterday then exit long around close of today.

Similarly If holding Short and , ema3 of today > ema3 of yesterday > ema3 of day before yesterday then exit Short around close of today

Thanks

PS: Note that Exit completely if 3 EMA goes in opposite direction for 2 consecutive days is not the only exit strategy but one of the exit strategy beside others.

 

[sadax]

what is today's position which is going against our position

 

[rahulr]

Its not the price (high/low) but comparison of EMA values.

If holding Long and, ema3 of today is less than ema3 of yesterday and also ema3 of yesterday is less than that of day before yesterday then exit long around close of today.

Similarly If holding Short and , ema3 of today > ema3 of yesterday > ema3 of day before yesterday then exit Short around close of today

Thanks

PS: Note that Exit completely if 3 EMA goes in opposite direction for 2 consecutive days is not the only exit strategy but one of the exit strategy beside others.

Thanks NTrader. Adding the other EXIT rule here. Please add if you think i have missed any.

Exit if candle doesn't seem to be touching 3 EMA (partial exit). We probably want to reenter when candle touches back 3 EMA again.

By the way as per the strategy we have shorted NIFTY, but market opened with 50 points gap up and closed 180 points above than yesterday's close. Will trailing stoploss help here ? If we wait for 3 EMA to move in opposite direction for 2 days, won't it be too late ?

Also, do we need to add some other indicator so that we can predict reversal ? As per the strategy we ride the trend and wait for the reversal to happen before exit.

 

[rkkarnani]

I have received this query in my PM :

i am holding dec lot that i shorted on the expiry date [email protected] 25th nf went to a high of 4778 ..so @3:25 when nf ws trading @4705 the 3ema @4737 ws touching the candle(bcoz of high 4778)....so the 3ema ws well below that days high....so i did not cover inspite of being in 80pts profit ...and today nf opened in positive bt still candle touching ....so i am still holding...do you think i should have exited my 4785 shorted lot @4705 or i am on the right track following 315 ....pls guide...what am i supoosed to do nw totally confused

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This is my responce to his query... now request all to give their opinion what the person should do !!!

Hello, U are probably seeking help at wrong place... u can get better guidance on the Thread itself. Frankly and as I have mentioned in the thread in the past also : I do not follow the 315 strategy as put forth by Tradewithhunter!! I have my own other parameters that I use!
However going by the 315 strategy the mistake is in your entry!! You have entered at 4785 whereas the Short as per strategy was initiated on 14th November ~5150!!! You hv entered after the trade moved almost 365 points in profit!! Going strictly by rules you are correct in not covering your Shorts but going by Common Sense : You enter a trade that had moved BIG and still you were getting ~80 odd points of profit, I would Exit for sure!!! Though it may seem more correct after seeing the adverse Nifty Movement but thats logical!! At the point of your Exit the Short Trade would have moved a whooping 400 points.. some pull back was expected. You should have either waited for a New trade(crossover) or if u were impatient, should have taken a position at 15 EMA touch, where an ADD is done!!
You may now ask : What should I do now? A difficult situation in which to guide but my personal action would be to Book Losses

He can also book losses in NF and convert to Nifty Options!!

 

[rh6996]

I have received this query in my PM :


***************************************

This is my responce to his query... now request all to give their opinion what the person should do !!!

He can also book losses in NF and convert to Nifty Options!!

As per new stratgey he can exit tomorrow if 3EMA value tomorrow is > today and wait for another crossover or 15EMA touch to enter a smaller risk trade!!

 

[rahulr]

Doesn't look like Nifty would be able to sustain above 4850. The 4710 support was breached with huge volumes. If you see current rally post that, the volumes have been decreasing.

So far, the short looks good.

Although, the world stocks rallied today. US markets opened with gap up of 3% on the speculation that IMF has come with rescue plan for Italy(which IMF has deined).

Will be interesting to see what happens next.
http://img819.imageshack.us/img819/2716/nifty1129.png

 

[rkkarnani]

Doesn't look like Nifty would be able to sustain above 4850. The 4710 support was breached with huge volumes. If you see current rally post that, the volumes have been decreasing.

So far, the short looks good.

Although, the world stocks rallied today. US markets opened with gap up of 3% on the speculation that IMF has come with rescue plan for Italy(which IMF has deined).

Will be interesting to see what happens next.
http://img819.imageshack.us/img819/2716/nifty1129.png

I am not much in know about volumes but here should we take into consideration that the "high" volume you see on 24th November can be due to "Derivative Close"!! This may reduce it's significance!!
In hourly there seems to me a clear Positive divergence in RSI.. while price continued to make lower lows RSI made Higher Lows. In EOD charts also RSI has broken out from below 30!! Rally may sustain a little more!! We may get to see a 15EMA touch!!

 

[manoharpillai]

How are we going to predict the cross over in advance to +ve...!! That could be the best part of 315 strategy is there any way to forecast it in advance...

 

[rkkarnani]

How are we going to predict the cross over in advance to +ve...!! That could be the best part of 315 strategy is there any way to forecast it in advance...

Manohar, You are too expirienced to even ask this question!! And talking of "Best Part" ... why 315 only.. forecasting (predictiong) the future can be the best part of any strategy, even the game called "Life"!!!