SH's 315 Strategy - how to use if effectively

[naveenvadavadagi]

:clap::clap::clap:

Yes I am able to attach the chart

 

[linuxguy]

Please let me know how to attach charts..

http://www.traderji.com/announcements/22138-how-post-chart-image-traderji-com.html


I prefer the site tinypic.com

 

[naveenvadavadagi]

oop's sorry...

:clap::clap::clap:

 

[Tradewithhunter]

TH, Have gone through the thread, very interesting indeed!!! Had seen quiet a few MA crossover system which work at times and do not at other so does yours. BUT you have added value by way of MM and position sizing. Great going.
Have a few doubts : We add a long when price retraces to 15 EMA (or comes near 15 EMA)... now we need to have some rule to qualify a level that we may call 'near'!!! Do we add when it comes near or only on close of the bar that touches 15 EMA or maybe comes near 15 EMA .

After we exit all positions as and when the Price bar leaves 3 EMA, Need to understand similar thing while reentering on the Price touching 3 MA!!!
Have a few more queries and shall try to put the same here soon.
Regards
-Shravan

Dear Shravan,

We add when price retraces to 15 EMA, the candle might or might not close there though. This works like magic in strong trends.

Similar logic applies to 3 EMA reentry.

Cheers
Stockhunter

 

[Tradewithhunter]

We are long and price bar leaves 3 EMA, we exit our position. The next bar instead of touching or closing near 3 EMA, touches 15 EMA, do we go long again!!??

This scenario is not possible, when we exit a long when candle is not touching 3 EMA .. at that point price will be greater than 3 EMA which will be greater than 15 EMA.

So the next bar will have to first touch 3 EMA and than only later touch 15 EMA. Only in case of a huge gap down opening its possible that instead of touching 3 EMA the candle opens straight at 15 EMA... which means nothing but another low risk long.

Cheers
SH

 

[Tradewithhunter]

Thanks TH, I understood it as such, but we need to have some parameters to define "price retarces "near" the MA!!! I have used a value of 0.5% of the MA level, say the 13EMA is 5000 , price is retracing from above, I add at 5000+0.5% i.e. 5025!!! Would you agree or we need to take a lower figure.

I keep no filters... I enter only when i see price touching 15 EMA visually....

Cheers
SH

 

[rkkarnani]

I keep no filters... I enter only when i see price touching 15 EMA visually....

Cheers
SH

Please Note : This post is not to create an argument and do take it in proper spirit:

TH, In one of the post you had mentioned 'adding' when price retraces to 15EMA or near it :

Please see second red up arrow on 28th April. Markets corrects on this day and EOD candle touches (or gets very close to) 15 EMA.

Maybe becoz of this ccmb is using a filter. I would also say that we do need a level that we can call 'very close'!!!

Would it be correct to say that once we exit a position say at 5044, 3 EMA is at 5015, do we give a buy at 5015!!!??? not waiting for the bar that touches that level to close!!!

Similarly if we are long and NF is at 5044 and 15 EMA is at say 4990, do we give an "add" order (to buy additional qty.) at 4990 without waitng for the bar that touches that level to close!!!

Personally feel that the price bar may touch 3EMA or 15 EMA and continue to go down...........

How do we handle such a situation . Feel its importance for we do not have any SL in place!!!

 

[Tradewithhunter]

Dear Rkkarnani,

I have written a post in the past on SL management and protecting your capital. If you go on my first post you will see the link.

Please understand, on a real time basis your EOD EMAs will by dynamic i.e if NF is trading at 5000 and we see 15 EMA at 4850, we cannot blindly ADD at 4850. This is because by the time markets falls to 4850 during the day, 15 EMA would have dropped too to lets say 4820. This is where 'visual' retest of 15 EMA is important. Hence we add only when we see a visual retest which might happen at 4820 or 4810 or even lower.

Lets say we ADD at 4820 when visual retest happens and markets rise later in the day and mkts close at 5000, 15 EMA would close around 4850. By waiting for a visual restest to ADD we were just able to buy at a lower price (4820 instead of 4850).

Conversely, if the markets dont rise but keep falling, its possible a bearish crossover happens at 4700 levels which forces us to exit longs and open shorts. Again we are not worse off since we added longs at 4820 and not 4850.

Visual retest works in our favour both ways since it delays our add when market is correcting against the trend.

I do not keep any filters becuase I cannot define any % to be used as filters since the underlying 15 EMA value keeps changing during the day.

So my thumb rule stays as 'Add only when you see price retesting 15 EMA without waiting for candle to close'.

Rest is upto the users and their improvisation, they can always better this system with their experience.

Cheers
Stockhunter

 

[observer]

After we are in trend and profit, the 3ema touches 15ema and moves up agan, we ADD as per rule. But what do we do if the market moves against us after we have added? Do we immediately close our added position(at loss) or wait for ema cross and sell the pyramid?

 

[Tradewithhunter]

After we are in trend and profit, the 3ema touches 15ema and moves up agan, we ADD as per rule. But what do we do if the market moves against us after we have added? Do we immediately close our added position(at loss) or wait for ema cross and sell the pyramid?

We wait for ema cross and then exit the pyramid and open an opposite position immediately.

Since your initial position is in profit when you ADD, you are not risking your own money but the market's money in the ADD.

Cheers
SH