SH's 315 Strategy - how to use if effectively

[trade4joisar]

Market seems to be reversing again due to Fed tapering fears, Higher inflations and fears of RBI raising rates.

NF closed at 6258 which means M2M profit is down to only 68 points on the 4 lots left.

If the market continues to fall and we get 315 sell in next two days, the scaling out at 100 points and 185 points levels each will make even this lossy trade profitable.

This year has been a story of small trending moves and quick reversals hence scaling out method has worked very well this year.

Cheers
SH

Hello SH,

As per your very good way of reading market, you came up with rule of 3 ema closing against trend for consecutive 2 days, then one has to exit from position.

Today 3 ema closed against trend for 2 days consecutively. Let see how it goes tomorrow.

 

[TradeJoker]

another crossover ?

 

[timepass]

another crossover ?

No crossover as yet on Nifty - spot or futures..

Nor any crossover on Banknifty - spot or futures.

So no reversal as yet. Wait for Monday EOD.

 

[amit44]

15 EMA CLOSE 6252.73 3 EMA CLOSE 6251.98 So No crossover yet

 

[mangup]

Yesterday should be the "add to long" day (As gone below 15 EMA). Also "No 3 EMA touch to high" is adding possibility to open gap up on Monday.

 

[nitinagarwal_22]

Can any body discuss the chart of Bata India as per 315 strategy.

I am holding shorts in bata india

I m new to this strategy.

 

[Tradewithhunter]

Market seems to be reversing again due to Fed tapering fears, Higher inflations and fears of RBI raising rates.

NF closed at 6258 which means M2M profit is down to only 68 points on the 4 lots left.

If the market continues to fall and we get 315 sell in next two days, the scaling out at 100 points and 185 points levels each will make even this lossy trade profitable.

This year has been a story of small trending moves and quick reversals hence scaling out method has worked very well this year.

Cheers
SH

315 sell being generated today so exited at 6177 (loss of 13 points on last 4 lots) so on these 4 lots loss of Rs 2600

Had booked Rs 10,000 & Rs 18500 due to scaling out earlier so on net basis on this entire trade a profit of Rs 25900. Given the trade was on 8 lots, this comes out to be a profit of 65 points per lot approx. As you would see, scaling out method converted a loss making trade to a profitable trade yet again.

Based on simple crossover method though, this is a lossy trade of 48 points (6225-6177)... given its a 4th whipsaw on simple crossover basis, I have shorted 8 lots again at 6177.

Co-incidentally, NF today not touching 3 EMA on consecutive 2 days so to hedge any upmove due to 3 EMA tomorrow based on my market correction prediction theory, I have hedged by buying some calls which I will exit at 3 EMA touch.

Cheers
SH

 

[karthik_sri]

Ok sorry - the entire weekend went away in home chores and election results ... let me explain one of the two methods below to maximise gains:

SH's incremental risk position sizing

This system tries to exploit the basic cyclical nature of the market i.e each trend is followed by sideways period and sideways period is followed by a trend period.

As a trader, it means that after a good trending move we need to limit losses by adjusting position sizing as market may move into sideways zone and give whipsaws &

As market gives whipsaws and enter sideways zone, we need to increase our trade size gradually as we know soon we will enter a trending period.

Simply put, lets assume a person can trade upto 4 lots nifty. You start your year with trading 1 lot on first signal. If the signal whipsaws and you get loss, next signal should be 2 lots, If the signal whipsaws and you get loss again, you trade 3 lots on next signal and finally 4 lots. We all know with each whipsaw the chance of trend goes up so while your losing points will be on 1 or two lots, the big trend that you will catch will be on 3 or 4 lots ...

At any point when you get a profitable trade in terms of points (lets say you trade 1 lot, whipsaw, you trade 2 lots .. trend emerges and you profit) ... you should revert back to 1 lot again and start afresh.

Lets take recent example... we got good trending move before the sell that was generated on 8/11/2013 ..- sold NF at 6186 .. as this signal came after a profitable trade we know we might be entering sideways zone so we start with selling 1 lot...

- this whipsaws and buy is generated on 19/11/2013 at 6230.. so we lose Rs 2200 (44 points on 1 lot)

- We buy 2 lots now at 6230, again whipsaws and sell generated on 20/11/2013 at 6149 ..so we lose Rs 8100 (81 points on 2 lots)

- We now sell 3 lots as 2 consecutive losses ... sold 3 lots at 6149 .. this also whipsaws, we lose Rs 11400 (76 points for 3 lots)

- We now buy 4 lots at 6225 on 29/11/2013 .. still held. We booked around 6400 so around Rs 35000 (175 points for 4 lots).. this trade is already open so we will enter back in longs with 4 lots at 3 EMA touch ....

However, above will explain you that even if we end up getting net 108 points profit per lot in this trade we will recover all losses from previous trades (we already have 175 though)...

However if we traded only 1 lot per signal, we would need 201 points in this trade to recover all losses of last 3 trades (44+81+76)..

You can sift through last 4-5 years charts and you will understand the power of this method.

Hope this makes sense... digest it and post any questions ....

Scaling out method I will post in a couple of days once this post is clear to all.

Cheers
SH

Great SH:clap: Yet another simple way from you:clapping:

 

[VJAY]

Dear SH,
Are you not exiting position when consecutive 2 days ema closing against position?
if followed it then yesterday is exit long pos.....please clarify if you stopped it in your trades ....

 

[Tradewithhunter]

Dear SH,
Are you not exiting position when consecutive 2 days ema closing against position?
if followed it then yesterday is exit long pos.....please clarify if you stopped it in your trades ....

Yes I have stopped it Vjay..

Cheers
SH