SH's 315 Strategy - how to use if effectively

[ppmatkari]

Bajaj Auto gave sell signal on 21st October at 1473 .. now its trading at 1369.

Axis Bank gave sell on 26th Oct at 967 .. now its trading at 915.

SBI gave a sell on 27th Oct at 2202 .. now its trading at 2194.

no whipsaws in any of these yet, Bajaj Auto and Axis in nice profits !

Cheers
SH

yes i did enter late in SBI & as i said i picked it near the nifty's days low , thereafter market kept on going up. But even if i had entered as per signal on 27th @2204 still i would have had got whipsawed since on both days SBI's intraday high was much higher than 2204 (2339 on 27th & 2232 on 28th)...

Plz guide on stop loss to be kept at entry that is crucial thing i feel.

 

[linuxguy]

Hi,
please see if I am following correctly:

I used finance.google.com, pulled up intra-day chart of DLF with interval 2 min.
Used 3EMA and 15EMA.
Now as it shows in the chart, towards the end of day, 3EMA is below 15EMA.
So do I short DLF here?
But on EOD charts, 3EMA has crossed 15 EMA downwards on 26th.

 

[Tradewithhunter]

Linuxguy,

I have said this many times throughout this thread and will say it again, 315 strategy is an EOD swing strategy and not an intraday strategy (atleast thats what I believe and propogate).

DLF should have been shorted on the day it gave a sell signal on EOD charts i.e on 26th Oct (as you have said) at around closing price of 429, today it has closed at 375 so you would have by now earned Rs 43200 with just one lot . If you are not a greedy trader, you would have booked today at close price since 3 EMA is barely touching the EOD candle body (pls read my profit booking rules).

I would again re-iterate, think big and use 315 for EOD swing trading... leave intraday trading for 'fly by night get quick rich' traders.

Cheers
SH

 

[Tradewithhunter]

yes i did enter late in SBI & as i said i picked it near the nifty's days low , thereafter market kept on going up. But even if i had entered as per signal on 27th @2204 still i would have had got whipsawed since on both days SBI's intraday high was much higher than 2204 (2339 on 27th & 2232 on 28th)...

Plz guide on stop loss to be kept at entry that is crucial thing i feel.

Hi,

As i explained in my previous post, our SL is when an opposite crossover happens. Please understand this is not an intraday game but a SWING game where both SLs as well as profits will have to be BIG !

so if you have shorted SBI at 2204 you need to wait for markets to swing, your SL is only when 315 gives a bullish crossover even if that happens when SBI is closing at 2400 suddenly the next day. Avoid entering or exiting based on intraday moves.. pls!!!!!

315 is a strategy for patient traders who have nerves to hold positions even when they move in loss (or profits) waiting to exit only at a 315 signal ... its not for traders who have small risk appetite and get scared by intraday wild moves .. (sorry but i call them penny wise pound foolish traders).

you might get a 100 point loss each in first 2 trades but the third trade will give you a 600 point profit. Look at SBI itself .. the last buy it gave was at 1752 and after that it went to make a high of 2500 on 17th October.. thats a massive 750 points move... and 17th October was also a 'book profits' day as per 315 rules... but before that SBI gave a couple of false trades since it was rangebound and caused losses of 200-300 points.. a loser won't have traded the third signal which gave a 750 points profit after those failed trades... see my point?

you need to ask yourself, do you have the nerves, faith and enough capital to take 100 point SLs and still trade based on 315 after 2 failed trades?

If your answer is yes, welcome to the world of successful traders.

Cheers
SH

 

[linuxguy]

DLF should have been shorted on the day it gave a sell signal on EOD charts i.e on 26th Oct (as you have said) at around closing price of 429

Sir,
which software do I use that would give me 315 signal in real time? As my chartnexus only gives me data after the closure of exchange.

Or, can I enter my position next dya?
Like Allahabad bank has given 315 signal today around 122 ( pls correct if me if I am wrong). So can I short it tomorrow at 122 or below?
Thank you.

 

[ppmatkari]

Hi,

As i explained in my previous post, our SL is when an opposite crossover happens. Please understand this is not an intraday game but a SWING game where both SLs as well as profits will have to be BIG !

so if you have shorted SBI at 2204 you need to wait for markets to swing, your SL is only when 315 gives a bullish crossover even if that happens when SBI is closing at 2400 suddenly the next day. Avoid entering or exiting based on intraday moves.. pls!!!!!

315 is a strategy for patient traders who have nerves to hold positions even when they move in loss (or profits) waiting to exit only at a 315 signal ... its not for traders who have small risk appetite and get scared by intraday wild moves .. (sorry but i call them penny wise pound foolish traders).

you might get a 100 point loss each in first 2 trades but the third trade will give you a 600 point profit. Look at SBI itself .. the last buy it gave was at 1752 and after that it went to make a high of 2500 on 17th October.. thats a massive 750 points move... and 17th October was also a 'book profits' day as per 315 rules... but before that SBI gave a couple of false trades since it was rangebound and caused losses of 200-300 points.. a loser won't have traded the third signal which gave a 750 points profit after those failed trades... see my point?

you need to ask yourself, do you have the nerves, faith and enough capital to take 100 point SLs and still trade based on 315 after 2 failed trades?

If your answer is yes, welcome to the world of successful traders.

Cheers
SH

Ok so we dont need any stoplosses, either long or short or exit. So incase of narrow ranged volatile market, gap ups/gap downs there will be lot many whipsaws & loosing trades & in strongly trended market there will be big winning trades. Is my observation correct? If yes please tell ways to counter such days & avoid whipsaws.

Hope i m not being pricky, just making sure i get the nitty gritties right.

Thanks again for your great strategy & also for patiently answering my queries.

 

[ppmatkari]

Sir,
which software do I use that would give me 315 signal in real time? As my chartnexus only gives me data after the closure of exchange.

Or, can I enter my position next dya?
Like Allahabad bank has given 315 signal today around 122 ( pls correct if me if I am wrong). So can I short it tomorrow at 122 or below?
Thank you.

Use free quotetracker software it gives you RT data with 6 months backfill. Have attached a chart of sesa goa. Check out.

 

[Tradewithhunter]

@SH
You track the Top 20 active securities for your futures trades? Also BNF had triggered sail on 27th i think , can u please confirm as i am still learning your strategy.
Thanks.

Yes mangafreakz,

I track top 20 active securities and trade in them in future. Out of these 20 I trade in upto 5 stocks at one point and keep some capital aside to catch a trend change .

Usually in a strong trend I end up with longs or shorts in all 5 stocks, this is becuase in stron trends almost all 20 securties would have same 315 signal. However as trend changes, some securities will start correcting and give opposite signal. For eg if I am long in 5 stocks, and from the rest 15 i see some stocks giving sell signals.. it means these stocks are weak as compared to other stocks and I short them instantly. This hedges my long positions beautifully. So if overall market corrects, my long positions would whipsaw but my shorts will give me huge profits. If the mkts dont correct, my shorts will whipsaw but my longs will move in huge profits

Current examples were I was long in RIL, DLF, SesaGoa, Nifty and BankNifty. However Suzlon and RCOM gave sells before anything else and I jumped in shorts in those. Net result is both suzlon and unitech broke down and gave nice profits while other stocks gave sells much later. Net net earned in longs and shorts both.

The trick is to be the first to buy a strong stock and sell the weakest stock and there 315 is your best guide.

Cheers
SH

 

[Tradewithhunter]

Ok so we dont need any stoplosses, either long or short or exit. So incase of narrow ranged volatile market, gap ups/gap downs there will be lot many whipsaws & loosing trades & in strongly trended market there will be big winning trades. Is my observation correct? If yes please tell ways to counter such days & avoid whipsaws.

Hope i m not being pricky, just making sure i get the nitty gritties right.

Thanks again for your great strategy & also for patiently answering my queries.

Hi ppmatkari - No problems and its my pleasure to answer any queries here. I am doing this for my selfish purpose, I find a lot of satisfaction when I help other traders in making money.

Yes 315 is a trend following strategy and in rangebound markets you might get whipsawed. However depends on how tight the range is .. if the range is 300 points on Nifty .. you can still make money in 315.. but if the range is 150 points.. nothing can help you except patience and acceptance of these small losses. However a tight range often signals an upcoming big move so no reason to give up following the signals even after some consective losses.


Cheers
SH

 

[Tradewithhunter]

Sir,
which software do I use that would give me 315 signal in real time? As my chartnexus only gives me data after the closure of exchange.

Or, can I enter my position next dya?
Like Allahabad bank has given 315 signal today around 122 ( pls correct if me if I am wrong). So can I short it tomorrow at 122 or below?
Thank you.

Linuxguy - You should enter the same day and not the next day.

There are many paid softwares available in mkts like amibroker etc. There are also economical online charting websites that you can use by paying Rs 400- 600 Rs per month like Icharts. They provide you intraday as well as historical data with multitude of indicators.

Or try the free ones like quote tracker as suggested above.

Cheers
SH