SH's 315 Strategy - how to use if effectively

[rh6996]

As per Post 394 in this thread by TH on 7th December he had added to LONG when price touched 15EMA though that day the Bar had not breached the high of the previous days High!!
Just check the link:
http://www.traderji.com/technical-a...egy-how-use-if-effectively-40.html#post390221

 

[kkr555]

Here is the info from SH's original post #50.

As a trader, the first thing I ask from myself here, what could i have done to avoid this whipsaw completely? The answer comes back - NOTHING.

The second thing I ask from myself is - what can i do different to reduce the overall loss in such situations? The reply comes back - well I can be slightly less greedy and delay my 'ADD' to a point where I have some confidence that the correction is over and the markets are swinging back in the main trend's direction.

So I amended the ADD rules slightly. I said I will add only if below 2 conditions are fulfilled:

1. 3 EMA is still below 15 EMA for shorts and visa versa AND
2. The current candle breaches previous day's lows for shorts (previous days highs for longs)

This means that I add longs when i see fresh buying has started after the correction. This is slightly high probability add though it means I dont add exactly at 15 EMA but slightly away from it.

There seems to be a huge confusion with regards to ADD. SH had clearly stated that a new additional position will be BOUGHT only if the 3 day EMA is above the 15 day, the 15 day EMA is touched/kissed and then the current candle breaches the previous days HIGH. However I have seen people disregarding this rule.

As for me, I do not trade the exit even on days when the entire candle is above the 3 EMA. I just wish to keep this strategy as simple as possible. My idea is not to generate profits but to PROTECT my LONG positions from any downward slide. I also have hedged SHORT positions as well. I very rarely trade these.

Also, you ADD only if you are in profit. Hope I am right.

 

[tips.seeker]

ne backtest report ??

 

[Tradewithhunter]

Ok folks, let me try to put the doubts at rest once again.

Dear rh6996/Kanchan - Yesterday's whipsaw was one of the worst whipsaws you would come across while trading 315. Similar to the whipsaw we had on the dubai debt crisis news. You really dont want 3-4% index moves against 315 that too near 15 EMA. It will hurt for sure, It hurt me and my profits. And the trouble is, and I am being honest here, I dont know how to avoid such whipsaws. I am not even sure if anyone would know for if they knew they would be holding the secret to the Holy Grail. And I dont believe in Holy Grails. Even Gann used to lose money big time.

Yesterday whipsaw was because of our blessed FM suddenly came out with his fancy predictions on GDP for next 3 years and I dont think any technical analysis can predict these things. I am sure FM was trying to save his losses on his longs.

Now as far as ADDs are concerned, I have posted two styles in the past for ADDS.. one for agressive traders and the second one for conservative traders who want to protect their capital. The ADD which you did was the 'aggressive' style where you ADD at 15 EMA touch without waiting. the ADD rule which Ankit Garg and KKR5 are highlighting are the 'Conservative' style of ADDs where you wait for the trend to resume again by waiting for previous candle lows breach.

Being aggressive or conservative for me depends in what markets we are going through vis-a-vis my positions. In a Bull market, I am aggressive with my Longs but conservative with my Shorts and visa versa. So you saw I ADDED longs on 15 EMA touch a few days back.. but yesterday I did not ADD shorts at 15 EMA touch but waited for previous days lows to be breached. This is because we are still in bull markets.

It also depends on how my original position is faring, if my original shorts are in huge profits when 15 EMA retest happens.. I can go short at that point being aggressive.

How do I define bull markets and bear markets? My logic is again based on 315. If on weekly charts 315 is bullish, we are in a bull market and visa versa.

KKR55 - Hope above clarifies your confusions as well.

Observer - Yes you are right, if your original positions are in profits, you can ADD at just 15 EMA touch since you are risking markets money in your ADD here.

Arti - As per the rules you enter longs at 3.25 PM on the day the crossover happens. So yesterday I went long at 3.25 PM around 5145.

tips.seeker - Sorry no backtest data.

In the end, I will again appeal to all users to be pateint and persistent with 315 for atleast 6 months. I can understand people losing faith when they see such whipsaws. But I can remain confident with 315 since 315 has helped me capture huge 1000-2000 points moves in the past and without doubt no such move in future will be missed if I stick to 315. Take these whipsaws as business expenses .....

My positions: reversed to longs at 3.25 PM yesterday at 5145. Loss in shorts 105 points per lot, had booked 32 points already in those shorts hence net loss 73 points.


Happy Trading

SH

 

[arti]

I have a basic doubt about this strategy.In todays EOD chart its not clear whether 3ema crossed above 15ema, so i should wait for next eod's candle or the way mkt rallied i should have entered when 3ema crossed 15ema on intraday charts (or after waiting till 3:25p.m i should have entered long as suggested by SH). Please some one clarify my doubt.

Someone plz answer my query also

 

[Tradewithhunter]

Booked NF at 5170 since 3 EMA is at 5115 and not touching todays candle.

Thats 25 points profit booked. Will re-enter in longs at 5110-115 now.

Cheers
SH

 

[Tradewithhunter]

Someone plz answer my query also

Arti - I have answered your query above in my previous post.

Cheers
SH

 

[arti]

---------deleted---------

 

[mysticalrun]

sir ,,,,,,,,,,,,, plzzz tell where is current 3ema now bcoz i shorted at 5160...................so i"l cover at 3ema and will do long .............plz tell........


thxxxxxxx

 

[prakashjack]

3EMA is at 5097.