SH's 315 Strategy - how to use if effectively

[rkkarnani]

I am following 315 purely. But finding ways of avoiding whipsaws. It is just an idea based on a littlebit of homework

I respect the system. But may be some improvement can be done to make it a better than the present one.
Regards

Believe me when I say this, there will be times when this "improvement" may lead to a whipsaw and while the original system would not have given a whipsaw...... you cannot avoid them in a mechanical system!! I am telling this from my expirience!! So best is to keep a system as simple as possible. In this 315 also the exits and reentry really help to reduce the "big" adverse moves..

Well as per my mind set, and different traders have different perspective.

 

[msa5678]

Are we heading for another whipsaw ?
Market is moving in a very tight range
of 20 points , Don't know which way it
will break. What could be the reason for
the tight range. Is there any manipulation
by the big guys?

 

[rkkarnani]

Shorted at 5814 with SL above todays high plus filter.. still holdinh Put bought yesterday

 

[msa5678]

Shorted at 5814 with SL above todays high plus filter.. still holdinh Put bought yesterday

Dear RKK,

Your strategy seems very interesting,
Please confirm that this is what u have done,
You bought a PUT yesterday around 3:25,
PUT of which strike ?
Today you shorted at 5814, Please may I
know how u arrived at this 5814 figure.

 

[rkkarnani]

Dear RKK,

Your strategy seems very interesting,
Please confirm that this is what u have done,
You bought a PUT yesterday around 3:25,
PUT of which strike ?
Today you shorted at 5814, Please may I
know how u arrived at this 5814 figure.

I dont take a position in Futures on crossover but only on breach of the Hi or Lo of the crossover bar!! I go for Options.

I bought 5700 PE at ~44!! 5814 : Well all bars between 12:15 and 12:55 either made a high of 5814 or cl~5814.. and as the high today is ~ 5821 the risk was minimal... so went short with 5821+filter as Exit. As any close >5800 will give a Bullish crossover again.

 

[rkkarnani]

SL hit , exited both Put and short!! Bought Call of 5800 @66

 

[rh6996]

315 did give a crossover yesterday, but looking at historical chart of RIL, just see on 30th Sep and 9th Dec. there was bearish crossover but market did not breach the low of these days... so for Reliance (I also trade this counter with some other combination of MA's) I prefer taking position only on breach of the crossover bar's high or Low!!
So my view is that you take a position day after not in a hurry but see that the market is trading below the low of yesterday!!! Just my view and I may be proved wrong!!! So take care please.

You seem to be proved correct more often than wrong recently... going long or short above or below thereally did wonders recently... question is whether we incorporate it as a rule!! May be seeing the points by which the crossover takes place we take a position, i.e if crossover is just by a few Nfity points we wait for next day.... or maybe like a few here dabble in Options on trigger day and enter future when SL is near!! Please give your valued suggestions...
I was lucky, I did not short yesterday but exited Long though
went long again only when today high was breached at ~ 5822.. dont know if it is right or wrong but surely it is againbst the rules of the thread thread!

 

[kittty]

 

[mangup]

Thanks for the clarification.
I entered midway ( not at entry point) It was violation of 315 startegy.
I kept long yday. Hopefully, it will recover.

I have some observation. Experts can comment on the point.
After 315 cross over, at one stage, MACD and Stochastics reverse the trend.
In case of range bound market, I found squaring off the position at that point reduces whipsaws.

Another stray Idea is to to enter at 315 cross over and reverse the trade at MACD and stochastics reversal and [roceed. This way I did paper trading and found lesser whipsaws eventhough sometimes big gains are missed as MACD and stochastics cross over again may reverse in the mean time without 315 crossover.

Dear nallan,

I have not understood your system what u r suggesting. Can you pl clarify in details about the entry & exit rule in this combined system (315+MACD+Stochastics)?

Also you need to backtest this new system for nifty atleast to check whether it is giving good results as compared to 315 basic system. Pl remember there is also scope for improvement. I appreciate your efforts on improvising the system against "Whipsaw".

Thanks

mangup

 

[mangup]

One should trade stocks that he has had the opprtunity to study historical charts and the rules may differ from stock to stock. I try to find an appropriate "filter" which may reduce whips, but inspite of this filter Total elimination of whips is "impossible" as far as I think... I usually take the low or high of the bar triggering a buy or a sell as the Entry Stop Loss , this does not stop the whips but most of the time reduces the pain... in a few stocks I even take some quick profits on day of entry.. type of risk reward measure...

In DLF futures we got a signal on 31st Dec and the Buy was triggered on 3rd Jan, so the low of this bar of 3rd Jan I treat as my SL till the time high of this bar is taken off.
On 11th Feb, my chart of DLF futures (Real Time chart converted to EOD) shows a crossover on 14th Feb, the high of which was not breached!!!

Dear umeshmandal & optionspro,

I think you got a valid point/observation on improvising over the whipsaw. Can you please do the backtesting for nifty for this addition of improvement on basic 315 system?

This will help all of us to reduce trades on account of false whipsaw. I agree though we cannot eliminate whipsaw at least we can work towards reducing it.

Thanks

mangup