SH's 315 Strategy - how to use if effectively

[achopraa]

I don't want to be in a big discussion.

Summary.
As SH also confirmed, I will agree with trader_boy. 3 EMA @ 9:15 is more important than yesterday's 3 EMA because now you are looking @ latest 3 EMA value & based on it either exit OR stay with the trade. So for exit REALTIME is more important.

Hope you don't mind as i jump in between discussion between you & trader_boy.

Let me take a couple of minutes here to explain the Rationale behind referring to Previous Day's 3EMA value rather than the Current (LIVE) 3EMA.

1. 13th DEC Nifty Future Close Price was 4811.35 (Adjusted Price)
2. 13th DEC 3EMA price at Close was 4835.63 (Based on the above Adjusted Price)
3. 14th DEC Nifty Open Price was 4800.
4. 14th DEC 3EMA price at Open was 4817.81

Now, leaving aside the argument of which 3EMA to compare, it is definite that there was a GAP DOWN.

Ques - Why do we book profits for GAP DOWN?
Ans - We wait for Price to touch bach the 3 EMA value. This in most case scenarios will happen if the Price starts going Up, and crosses 3EMA and that is when we will Re-Enter the SHORTS.
Then, as is stated some where in this thread, all we have done is nothing but continued our position and taken advantage of Intraday Movement.

E.g. Say I took Original Position at 4820 Yesterday.
Today morning, I Exit my Position at Say 4785. Now my goal is for 3EMA re-touch.
At what point will this happen? If you have analysed, you will see that for the next day, in order for 3 EMA touch to happen, the current Price should be equal to the Previous EOD 3EMA value.
Now, previous day 3EMA was 4835.63.
So, if you put this value at the closing price (just for sake of calculating Current EMA), you get current 3EMA as 4835.63. All Agree???
So, when Price started Rising today and it touched 4835, I re-entered shorts.
Now the price again went down and closed the day at 4764.

So, what have I done actually?
If you see from a different view, you are still holding the Initial Shorts of 4820 whose current value is 4764. Meanwhile, you did an Intraday Trading for the 4785-4835 range and booked that as your profit.

Although this system is a No-Brainer but it is good to understand "WHY" we do certain things.

Thanks,
AC

 

[trader_boy]

Let me take a couple of minutes here to explain the Rationale behind referring to Previous Day's 3EMA value rather than the Current (LIVE) 3EMA.

1. 13th DEC Nifty Future Close Price was 4811.35 (Adjusted Price)
2. 13th DEC 3EMA price at Close was 4835.63 (Based on the above Adjusted Price)
3. 14th DEC Nifty Open Price was 4800.
4. 14th DEC 3EMA price at Open was 4817.81

Now, leaving aside the argument of which 3EMA to compare, it is definite that there was a GAP DOWN.

Ques - Why do we book profits for GAP DOWN?
Ans - We wait for Price to touch bach the 3 EMA value. This in most case scenarios will happen if the Price starts going Up, and crosses 3EMA and that is when we will Re-Enter the SHORTS.
Then, as is stated some where in this thread, all we have done is nothing but continued our position and taken advantage of Intraday Movement.

E.g. Say I took Original Position at 4820 Yesterday.
Today morning, I Exit my Position at Say 4785. Now my goal is for 3EMA re-touch.
At what point will this happen? If you have analysed, you will see that for the next day, in order for 3 EMA touch to happen, the current Price should be equal to the Previous EOD 3EMA value.
Now, previous day 3EMA was 4835.63.
So, if you put this value at the closing price (just for sake of calculating Current EMA), you get current 3EMA as 4835.63. All Agree???
So, when Price started Rising today and it touched 4835, I re-entered shorts.
Now the price again went down and closed the day at 4764.

So, what have I done actually?
If you see from a different view, you are still holding the Initial Shorts of 4820 whose current value is 4764. Meanwhile, you did an Intraday Trading for the 4785-4835 range and booked that as your profit.

Although this system is a No-Brainer but it is good to understand "WHY" we do certain things.

Thanks,
AC

as i mentioned earlier the profits could have been booked if because of gapdown NF opened say in the zone 4750-4755....n entry being prev days clos @4835...so we make 80 pts profit because of gap down.
N in afternun sae it touches touches 4835...so we reenter shorts and as per todays close 4764 tomorrow there will again be a gapdown if NF opens around 4720-4725..so we can book making another 110 pts profit ....so we are getting benefited by gapdowns and adding to our profits.

we exit at no touch just to skip the correction dont we ...once the eod and 3ema kiss...the trend resumes and we jump in again....so we play safe and make profit

And this way we end up taking benefit of market movement...in the above mentioned hypothetical example ...we made profit twice shorting @sam level 4835 !

 

[trade4joisar]

Its not only taking profits but also trimming the losses.

Look at this post by SH. So if we do not exit from 3 ema left position then what can happen.

http://www.traderji.com/technical-analysis/30428-shs-315-strategy-how-use-if-effectively-5.html

 

[Tradewithhunter]

EOD EMA means 3 EMA on EOD charts or daily charts, you need access to real time EOD charts.

Since the time the thread started, the open price needs to be compared with todays 3 EMA on daily charts and not yesterdays.

Achopra - I think you have mis-interpreted the rule.

Cheers
SH

 

[trade4joisar]

Cmp 4720
3 ema = 4759

 

[trader_boy]

Cmp 4720
3 ema = 4759

sl @4730....waiting for markets to fall further! :thumb:

 

[trade4joisar]

sl @4730....waiting for markets to fall further! :thumb:

Most of the NIFTY stocks have left 3 EMA

Once touched, don't know who will save NIFTY :thumb:

 

[eevra]

sl @4730....waiting for markets to fall further! :thumb:

tb: when will you book profit ?

 

[trader_boy]

tb: when will you book profit ?

usually i exit @open when there is a gapdown ...but because of the helpful post shared by achopra ...i have decided to put sl to try it out.I will wait and watch where the mkt goes till 12.If my sl is hit well and good or else il consider covering in the 4700 zone.This is kinda subjective.

 

[prst]

tb: when will you book profit ?

hope this jolly ride keeps on going, till this month end
dont want to book yet