SH's 315 Strategy - how to use if effectively
- Thread starter Tradewithhunter
- Start date
First & Foremost, with this post I mean no offence to anyone at all, just putting my views :thumb:
SH315 was only to be used for nifty futures as per his rules, but we did modify that rule and started using it for other futures with our own tweaks.
I hope many will agree with me on this.
Coming to the point:
SH315 says to exit the current position when price doesn't touch 3EMA in the current day. Upon this if common logic is applied then the candle will sooner or later come and touch 3EMA which is definately below current price. Hence a short position can be initiated ( again, thats my own way of modifying SH315 and not recommended anywhere by SH in SH315)
But still I would like to quoter SH here, in one of his other starategies which again talks about nifty, he suggests that If 3EMA is not touched consecutively for 2 Days then we can initiate a short with 3EMA as target. The Nifty reversal stratagey is what I am talking about.
So combining SH315 and Nifty Reversal we can initiate a short and moreso no other indicator need to confirm this. I am not concluding and saying that we can definately initiate a short once the price is above 3EMA, but all I ask is why not that extra income.
The disadvantage I have seen of initiating a short when price does not touch 3EMA is, that even on the next 2-3 trading sessions the price continues to scale greater heights without touching 3EMA, and our shorts cut our pockets very very deep. For these trades pls use the best of our friends in trading jungle, "Stop Loss" and "Money Management".
I personaly follow strict SL when trading with modified rules.
Most imp of all is, if you modify something, pls pls backtest and papertrade it first.
All Is Well
Sukhi Aatma
SH315 was only to be used for nifty futures as per his rules, but we did modify that rule and started using it for other futures with our own tweaks.
I hope many will agree with me on this.
Coming to the point:
SH315 says to exit the current position when price doesn't touch 3EMA in the current day. Upon this if common logic is applied then the candle will sooner or later come and touch 3EMA which is definately below current price. Hence a short position can be initiated ( again, thats my own way of modifying SH315 and not recommended anywhere by SH in SH315)
But still I would like to quoter SH here, in one of his other starategies which again talks about nifty, he suggests that If 3EMA is not touched consecutively for 2 Days then we can initiate a short with 3EMA as target. The Nifty reversal stratagey is what I am talking about.
So combining SH315 and Nifty Reversal we can initiate a short and moreso no other indicator need to confirm this. I am not concluding and saying that we can definately initiate a short once the price is above 3EMA, but all I ask is why not that extra income.
The disadvantage I have seen of initiating a short when price does not touch 3EMA is, that even on the next 2-3 trading sessions the price continues to scale greater heights without touching 3EMA, and our shorts cut our pockets very very deep. For these trades pls use the best of our friends in trading jungle, "Stop Loss" and "Money Management".
I personaly follow strict SL when trading with modified rules.
Most imp of all is, if you modify something, pls pls backtest and papertrade it first.
All Is Well
Sukhi Aatma
Dear Sukhi Aatma - My 315 can be used with not just with Nifty but any stock futures. Obviously the stock futures in question should be highly liquid and highly volatile like banking, real estate etc.
Regarding shorting at 3 EMA not touching day's candle, let me put the debate to an end.. I think I had mentioned it somewhere on this thread earlier as well.
One can book longs and initiate shorts if gap between 3 EMA and current day's candle body is significant ... for example the gap should be atleast 1%-2% of CMP ... and the profit should be booked as soon as you get 50% of that 1%-2%.
For example, If current candle opens at 5000 and 3 EMA is at 4920 .. you can short at 5000 with target 4960.
The above is a high probability trade, however is also high risk trade and requires good position management and capital to keep shorting at higher levels and averaging in case Nifty keeps climbing up from 5000 levels without touching 3 EMA.
As I said, 3 EMA usually gets touched in 2-3 days maximum so this type of trade doesnt last for more that 2-3 days.
I usually take this trade on Day 2 and not on Day 1.
Cheers
SH
Regarding shorting at 3 EMA not touching day's candle, let me put the debate to an end.. I think I had mentioned it somewhere on this thread earlier as well.
One can book longs and initiate shorts if gap between 3 EMA and current day's candle body is significant ... for example the gap should be atleast 1%-2% of CMP ... and the profit should be booked as soon as you get 50% of that 1%-2%.
For example, If current candle opens at 5000 and 3 EMA is at 4920 .. you can short at 5000 with target 4960.
The above is a high probability trade, however is also high risk trade and requires good position management and capital to keep shorting at higher levels and averaging in case Nifty keeps climbing up from 5000 levels without touching 3 EMA.
As I said, 3 EMA usually gets touched in 2-3 days maximum so this type of trade doesnt last for more that 2-3 days.
I usually take this trade on Day 2 and not on Day 1.
Cheers
SH
I am just taking short position as according to 315 Rule, Prices will touch 3EMA which is my target itself. Than I will cover my short position... It is trading the opportunity... not going against the rule but taking advantage of the condition that prices will go n touch 3 EMA. That's It... 
As per observation of SH, price must retrace to 3 EMA in 3 days, and the same may rise to touch the price.May change your anticipated profits!!!!
Nifty EOD candle didnt touch 3 EMA yesterday.. not tocuhed even today until 10.23 AM.. thats Day 2 for me.
NF is at 5048 with 3 EMA is at 5000 .. approximately 50 points difference.
I have closed my longs in NF and now opening a short for target 5025.
Similarly, closed ICICI BAnk longs and opened shorts.
Cheers
SH
NF is at 5048 with 3 EMA is at 5000 .. approximately 50 points difference.
I have closed my longs in NF and now opening a short for target 5025.
Similarly, closed ICICI BAnk longs and opened shorts.
Cheers
SH
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