SH's 315 Strategy - how to use if effectively

[Tradewithhunter]

Thanks Class. Excellent. Now I understand this term RT EOD. (though the name for a beginner is misleading)

Can I ask another question ?I realize this question will not have a clear cut answer but am keen to know the thoughts.

What are the pros and cons of using an EOD data to identify EMA3 cross over of EMA15 and trading the first thing the next morning vis-a-vis using RT EOD data to identify the same cross over at the closing hours of trading (for eg. 3.25 pm) and placing the trade (going long) the same day ?

One obvious thing seems to be the amount of profit (i.e if it was a right call and the market is trending) may be limited by carrying over the trade to the next day. Are there any other limitations ?

Hi Suresh,

First let me thank Class for taking the initiative and answering your first part of the question abslutely correctly.

Let me try and answer the rest.

Q: Conditions of price closing above 15 EMA and 3 EMA/15 EMA crossover, why both conditions?

My answer is that there is no condition of price > 15 EMA.. the only and the only condition is of 3EMA > 15 EMA ..... but you would find, whenever 3 EMA > 15 EMA... price will automatically be > 15 EMA.

Q: Why open positions at 3.25 PM same day and not next day?

My answer is that the only implication is next morning it can gap up/down meaning it will reduce your profits in the long run..there is no other implication.


Cheers
SH

 

[linuxguy]

30/11/09 : Longs at 5025
2/12/09 – booked at 5142 (3 EMA not touching) – Profit 117 points
2/12/09 – re-entered longs at 5108
3/12/09 – Booked at 5162 (3 EMA not touching) – Profits 54 points
3/12/09 – Re-entered longs at 5120
7/12/09 – ADD at 5060
8/12/09 – Booked the ADD at 5101 – Profit 41 points.

Still holding one long from 5120. Total booked profit till now is 212 points.

SH

Great Job!!!

I am waiting for the entry signal.

 

[Tradewithhunter]

Dear all,

I dont see many questions posted lately so I am guessing people have got hold of this strategy now.

I have been posting all my entries/exit lately to ensure traders are able to follow entries/exit in live environment to get a better understanding.

This is the last post by me in the chain of my entries/exit. I will be around though to answer any queries ..

Just to summarise the recent trades after the current buy signal given by 315.

30/11/09 : Longs at 5025
2/12/09 booked at 5142 (3 EMA not touching) Profit 117 points
2/12/09 re-entered longs at 5108
3/12/09 Booked at 5162 (3 EMA not touching) Profits 54 points
3/12/09 Re-entered longs at 5120
7/12/09 ADD at 5060
8/12/09 Booked the ADD at 5101 Profit 41 points.

Still holding one long from 5120. Total booked profit till now is 212 points.

Keep minting....

Cheers
SH

To update it with the Friday's trade:

11/12/09 - Booked the original position at 5170 - Profit 50 points
11/12/09 - Re-entered at 5140 (3 EMA touch)

Total booked profits till now is 262 NF points. Holding original longs now at 5140.

Now if mkts fall and we get a bearish crossover today/tomorrow, we will close longs and open shorts.

Cheers
SH

 

[[email protected]]

by the by what is 3 EMA and 15 EMA, what is the language used here.pl.explain.
R.Kumaraswamy

 

[Tradewithhunter]

To update it with the Friday's trade:

11/12/09 - Booked the original position at 5170 - Profit 50 points
11/12/09 - Re-entered at 5140 (3 EMA touch)

Total booked profits till now is 262 NF points. Holding original longs now at 5140.

Now if mkts fall and we get a bearish crossover today/tomorrow, we will close longs and open shorts.

Cheers
SH

Mkts are up again ... NF is again getting resisted at 5160-5200 levels.

I have decided to hedge my long now and written an 5100 CE selling at 142 now.

Cheers
SH

 

[Tradewithhunter]

by the by what is 3 EMA and 15 EMA, what is the language used here.pl.explain.
R.Kumaraswamy

Dear R K,

This question by a trader on Traderji really surprises me... for EMA in technical analysis is like A, B, C, D in literature. A

Answering this question is like answering what is bow and arrow after narrating the entire Ramayana

Anyways, EMA stands for exponential moving average. Please read the thread from the start to understand the strategy.

Cheers
SH

 

[linuxguy]

Any one using investbulls charts here, how to set intra day to get a days candle to use this strategy?

On Real time Java charts, if I set it for "daily", I dont get todays chart, only till yestaerday.

Thank you.

 

[Class]

Hi Suresh,
Not so sure I really understand your questions, but I'll give it a shot.

SH's system utilises EOD - End Of Day - data because we are looking at the 3 & 15EMA on a period of a day! This is not a day trading strategy, although the buy and sell can be picked at the best opportunities intraday using RT EOD data to dynamically see the very first sign of the EMA's crossing.

Be clear what period you are trading. If you are a long term investor you will go nuts looking at intraday charts and worrying about every little move of the price.

SH's system is a fairly short term swing trading method, and therefore the indicators have to give us what is happening in the short term. Over 3 days and as a reference over 15 days to identify intermediate trends (smaller trends within a larger over all trend).

No one, not even computers can predict the exact top and exact bottom of price. So what we do as traders is to manage risk. The pro's and con's are the same as any risk management. We reduce risk to reduce losses, which also limits profit. Taking smaller profits more often is a more sensible strategy than an all or nothing strategy with no risk management.

By looking at the cross overs we can identify that the trend HAS started rather than guessing if it had or not. We do miss the first few days perhaps, and even can lose some profit when the trend reverses and we wait for the cross over. But SH has provided for this by taking profit when the bar is detatched from the 3EMA, where trading exuberance has pushed it much higher in a day than it should perhaps be.

Hope this answers your question to some extent....

Thanks Class. Excellent. Now I understand this term RT EOD. (though the name for a beginner is misleading)

Can I ask another question ?I realize this question will not have a clear cut answer but am keen to know the thoughts.

What are the pros and cons of using an EOD data to identify EMA3 cross over of EMA15 and trading the first thing the next morning vis-a-vis using RT EOD data to identify the same cross over at the closing hours of trading (for eg. 3.25 pm) and placing the trade (going long) the same day ?

One obvious thing seems to be the amount of profit (i.e if it was a right call and the market is trending) may be limited by carrying over the trade to the next day. Are there any other limitations ?

 

[raviaru]

How the strategy can be done is it on line chart tick data or 1 min candle stick please answer me.

 

[Tradewithhunter]

Mkts are up again ... NF is again getting resisted at 5160-5200 levels.

I have decided to hedge my long now and written an 5100 CE selling at 142 now.

Cheers
SH

Mkts have corrected to 5103 now... the shorted NF call is now at 114 , I have exited it at 114 and booked 29 points profit in it. My total NF profit now is 291 points. :lol:

One lot NF long still holding (5140).

Cheers
SH