SH's 315 Strategy - how to use if effectively

[Tradewithhunter]

Hi folks - 3 consecutive whipsaws on 315 which is not uncommon or unforeseen. I got into longs on Friday after the bullish crossover.

I can see some questions being raised on 315 efficacy and that just simply trading crossovers is injurious to wealth etc ...I am very surprised to read such comments ...

First thing first ... everyone who has a working pair of eyes can see that the trading 315 between :

- Years 2000 to 2007 gave huge profits as it was a great bull run ...
- then came year 2008 where again 315 gave huge profits as in was a one way ride to hell for nifty .....
- Year 2009/10 again gave good profits as it was return of the bulls
- Year 2011 to 2013 has been the toughest period for trend traders given we started year 2011 around 6000 levels and even after 3 years we are still around 6000 levels ...i.e no big rise or fall like previous 10 years ....

So to judge the efficacy of 315, lets use these toughest 3 years to judge the strategy ....and lets judge it based on only simple crossovers entries and exits which the crudest method of trading this sytem ...

So again I re-iterate, use the most non-trending period of mkts in last 13 years and then use the crudest method of using 315 to find out if any year ended in a net loss?

Next post lets talk about the actual performance of last 3 years.

Cheers
SH

 

[Tradewithhunter]

I have posted results of last 3 years (year wise):

1. First system assumed one lot traded per crossover (simple crossover, no 3 EMA rule etc)

2. I personally use a special position sizing and profit booking system to maximise my profits - I have also posted the results of that system too.

As you can see, in no year 315 gives net loss. Year 2013 has been the best year on the last 3 years in terms of points earned till now.

I do not have enough space on TJ to upload the excel file ... I can post it somewhere else if anyone can tell me where...

Cheers
SH

 

[VJAY]

I have posted results of last 3 years (year wise):

1. First system assumed one lot traded per crossover (simple crossover, no 3 EMA rule etc)

2. I personally use a special position sizing and profit booking system to maximise my profits - I have also posted the results of that system too.

As you can see, in no year 315 gives net loss. Year 2013 has been the best year on the last 3 years in terms of points earned till now.

I do not have enough space on TJ to upload the excel file ... I can post it somewhere else if anyone can tell me where...

Cheers
SH

Thanks SH review performance of this method ....:thumb:
You can upload file to 4shared dot com and share the link here.....

 

[amitsh27]

Dear SH,
After seeing your yesterday's post, I'm quoting your first post & would like to know if all rules & regulations are mentioned or would you like to add sth to this?
Thank you ! :thumb:

Hi Friends,

I would like to use this thread to explain my 315 strategy along with some rules on how to trade it effectively for swings as well as positionals.

Cheers
Stockhunter (SH)
----------------------------------------------------------------------------------------------------------------------
Edited by Stockhunter on 11/08/2009

Hi Friends - since thread has become very long and my rules are thrown in between on different pages, I am giving the index of my important posts for anyone who sees this thread for the first time and wants to know the strategy.

For Basics and some Background on 315 - Please click here http://www.traderji.com/technical-a...rategy-how-use-if-effectively.html#post331535

For Entry, Pryramiding & Exits (profit booking) and re-entry rules - Please click here http://www.traderji.com/technical-a...tegy-how-use-if-effectively-3.html#post332954

Also click here to see explanation using a chart http://www.traderji.com/technical-a...tegy-how-use-if-effectively-4.html#post333264

For Stop Losses and protecting your capital - Please click here http://www.traderji.com/technical-a...tegy-how-use-if-effectively-7.html#post338314

Also, for more explanations and different SLs for a conservative trader and an aggressive trader click http://www.traderji.com/technical-a...egy-how-use-if-effectively-11.html#post347026

Cheers
Stockhunter (SH)

 

[timepass]

I do not have enough space on TJ to upload the excel file ... I can post it somewhere else if anyone can tell me where...

Cheers
SH

Thanks for the post, SH.

For uploading images, you can first upload them on an external site like www.imgur.com or www.tinypic.com and then paste the link here. For detailed procedure, click the link in my signature. So, you can take a bigger screenshot also and post it here.

For uploading excel and other files, you can upload them on an external site like ************, rapidshare.com etc. and paste the link here. But with all these sites, the links expire after a certain period (15days, 30 days etc.).

 

[gmt900]

Hi SH,
I have been tracking SH 315 system for a year now, although I have not started using the system yet. If one used the profit booking / re entering, pyramiding techniques described by you, the profit would have been around 1000 points last year. One of the reasons which is holding me back is , I am not able to use real time nifty spot charts to take position at 3.00 pm on the day when action is warranted. I asked a few members but am still not clear how to do it. May be it is my lack of familiarity in using charts ( how does one dovetail hourly chart with EOD chart?) .
If you could explain that part, I will be able to use the system for trading. Needless to say I am convinced that the system will give give handsome profits over a period of one year and more. Whenever real trending phase of nifty starts, the profits are bound to be awesome.
Thanks and regards,
gmt

 

[Tradewithhunter]

Expanding the results by using last 5 years trades now and assessing numbers based on 3 methods that can be used:

1. Simple crossover method - crudest!
2. Incremental risk method - increasing position size after each whipsaw (max 4 lots)
3. Flat position size (4 lots) per trade however scaling out method


Table 1 shows

- Simple crossover method & Incremental risk method has never given net loss in last 5 years in terms of nifty points made
- Scaling out method gave negative returns in 2009 however in last 4 years it has outperformed the above two methods handsomely (this is because mkts have been range bound in last 4 years)

Table 2 shows

- Simple crossover method has given small profits per lot traded in initial 3 years but recently performed well.
- Profits can be multiplied significantly by altering the position sizes with max 4 lots traded
- Scaling out method has outperforming in last 2 years due to rangebound markets

Table 3 shows return on investments

This is what trading is all about, how much return made on investment. For each nifty lot I have assumed 75K per lot capital required. Though in 2009/2010 capital per lot required was very less due to nifty being below 5000 mark mostly during this time.

Incremental risk method and scaling out method assumes max 4 lots traded so for those capital required is kept at 3 lakhs minimum and ROI is calculated on 3 lakhs investments

You can see:

- For simple crossover method, 2009/2010/2011 was low return years however 2012/2013 have been great. Avg ROI for last 5 years is 19% per annum & last 3 years is 25% per annum

- ROI can be increased significantly though by using incremental risk method. Avg ROI for incremental risk method in last 5 years is 41% per annum & last 3 years is 28% per annum

- ROI can be increased significantly using scaling out method as well. Avg ROI for scaling out method in last 5 years is 21% & last 3 years is 40% per annum

Would you be happy with 20% to 25% profits per annum or do you want more? If you want more, please stop following 315 system and this thread !

By the way, 3 lakh capital today at 20% per annum growth rate will become 18 lakhs in next 10 years and more than 1 crore in next 20 years if compounded annually.

Table 4 shows

- The true nature of 315 system and lets you decide if you would like to trade it.
- The average trades per annum is around 22 trades per year. So it proves this system is for pure positional traders who can hold their trades for 15 days to 2-3 months without flinching!!
- Most eye opening stats would be number or winners. As you would see, out of 22 trades, we will get only 7 winning trades per annum. Win:Loss ratio of less than 35% !!!!! Every 2 trades of 3 you take will end up in a loss !!!

Do you have the psychological strength to see 15 trades end up on the losing side out of 22 you take in the entire year? If not, better stop following 315 system and this thread!

Like every trend trader worth his salt would say, true traders lose many small battles to win the few bigger wars ....

Anyways folks, digest this post and decide for yourself if you are cut out for 315 trading or not

I will explain incremental risk method and scaling out method later if I see people interested/

Cheers
SH

 

[gmt900]

Expanding the results by using last 5 years trades now and assessing numbers based on 3 methods that can be used:

1. Simple crossover method - crudest!
2. Incremental risk method - increasing position size after each whipsaw (max 4 lots)
3. Flat position size (4 lots) per trade however scaling out method


Table 1 shows

- Simple crossover method & Incremental risk method has never given net loss in last 5 years in terms of nifty points made
- Scaling out method gave negative returns in 2009 however in last 4 years it has outperformed the above two methods handsomely (this is because mkts have been range bound in last 4 years)

Table 2 shows

- Simple crossover method has given small profits per lot traded in initial 3 years but recently performed well.
- Profits can be multiplied significantly by altering the position sizes with max 4 lots traded
- Scaling out method has outperforming in last 2 years due to rangebound markets

Table 3 shows return on investments

This is what trading is all about, how much return made on investment. For each nifty lot I have assumed 75K per lot capital required. Though in 2009/2010 capital per lot required was very less due to nifty being below 5000 mark mostly during this time.

Incremental risk method and scaling out method assumes max 4 lots traded so for those capital required is kept at 3 lakhs minimum and ROI is calculated on 3 lakhs investments

You can see:

- For simple crossover method, 2009/2010/2011 was low return years however 2012/2013 have been great. Avg ROI for last 5 years is 19% per annum & last 3 years is 25% per annum

- ROI can be increased significantly though by using incremental risk method. Avg ROI for incremental risk method in last 5 years is 41% per annum & last 3 years is 28% per annum

- ROI can be increased significantly using scaling out method as well. Avg ROI for scaling out method in last 5 years is 21% & last 3 years is 40% per annum

Would you be happy with 20% to 25% profits per annum or do you want more? If you want more, please stop following 315 system and this thread !

By the way, 3 lakh capital today at 20% per annum growth rate will become 18 lakhs in next 10 years and more than 1 crore in next 20 years if compounded annually.

Table 4 shows

- The true nature of 315 system and lets you decide if you would like to trade it.
- The average trades per annum is around 22 trades per year. So it proves this system is for pure positional traders who can hold their trades for 15 days to 2-3 months without flinching!!
- Most eye opening stats would be number or winners. As you would see, out of 22 trades, we will get only 7 winning trades per annum. Win:Loss ratio of less than 35% !!!!! Every 2 trades of 3 you take will end up in a loss !!!

Do you have the psychological strength to see 15 trades end up on the losing side out of 22 you take in the entire year? If not, better stop following 315 system and this thread!

Like every trend trader worth his salt would say, true traders lose many small battles to win the few bigger wars ....

Anyways folks, digest this post and decide for yourself if you are cut out for 315 trading or not

I will explain incremental risk method and scaling out method later if I see people interested/

Cheers
SH

Yes ! please explain these methods. Also please guide me on how to access RT data and use it.

 

[rh6996]

Sir, My apologies if my Post offended you. As is clear from my Post , I still consider that Trading ONLY crossover is NOT consistently profitable. I have no doubts about the efficacy of 315 in its totality.
My observation is based an an Excel sheet received from Umesh Mandal in Dec 2011 giving detailed trades from 2009 to 2011. I dont remember the figures but the result may not have been loosing but was dismal to say the least.
Unfortunately the attachment was remove by Umesh Mandal and I dont have it with me.
But a vague idea about his analysis done at that time can be had from his Post at :

http://www.traderji.com/technical-a...gy-how-use-if-effectively-108.html#post615016

Another Excel or some other File posted by L V gandhi , the link is still there and may be still valid, showed BIG loss in trading. The results were from Amibroker Back Test.
His Post on 4th Dec 2011 was as follows :

From 15/12/2009, till date from 52 trades, loss is 53088. and from 21/1/2010 loss is 32679 from 50trades.
These are Amibroker backtest results. Not done by me manually.

His Post is at :
http://www.traderji.com/technical-a...gy-how-use-if-effectively-108.html#post614884

May be Members here will hate me for 'arguing' with you ! I may seem to be doing so, but I can assure all that this is not being done to show my prowess vis a vis that of SH ! I am very clear in my mind that I am no where near your knowledge on the subject so there is no question of me trying one upmanship.

I also just now went through the Post of that Period. I find these findings/figures have not been disputed by any one at that time.
Hence I presume the same are correct and atleast I can summarise that the same are NOT totally wrong.

Its upto an individual to Trade the strategy but I suppose there is no harm in Warning them that the Refined form is MUCH MUCH MUCH MUCH Superior and profitable to the Simple Crossovers !

You may or may not respond to my Post, but I shall not post any further about this matter. I do not wish any controversy to arise here ans stem the flow of the thread which has got rejuvenated recently.

Hi folks - 3 consecutive whipsaws on 315 which is not uncommon or unforeseen. I got into longs on Friday after the bullish crossover.

I can see some questions being raised on 315 efficacy and that just simply trading crossovers is injurious to wealth etc ...I am very surprised to read such comments ...

First thing first ... everyone who has a working pair of eyes can see that the trading 315 between :

- Years 2000 to 2007 gave huge profits as it was a great bull run ...
- then came year 2008 where again 315 gave huge profits as in was a one way ride to hell for nifty .....
- Year 2009/10 again gave good profits as it was return of the bulls
- Year 2011 to 2013 has been the toughest period for trend traders given we started year 2011 around 6000 levels and even after 3 years we are still around 6000 levels ...i.e no big rise or fall like previous 10 years ....

So to judge the efficacy of 315, lets use these toughest 3 years to judge the strategy ....and lets judge it based on only simple crossovers entries and exits which the crudest method of trading this sytem ...

So again I re-iterate, use the most non-trending period of mkts in last 13 years and then use the crudest method of using 315 to find out if any year ended in a net loss?

Next post lets talk about the actual performance of last 3 years.

Cheers
SH

 

[Happy_Singh]

Out of 22 trades, we will get only 7 winning trades per annum.
Win:Loss ratio of less than 35% !!!!! Every 2 trades of 3 you take will end up in a loss !!!


Do you have the psychological strength to see 15 trades end up on the losing side out of 22 you take in the entire year?

.

:clapping:

folks, digest this post and decide for yourself if you are cut out for 315 trading or not

:thumb:


Happy