SH's Intraday Strategy - ELH5

[summasumma]

Hi all,

IMHO this is momentum based trend following system. Directional bias is high when there's a close beyond EMA's & we enter on retracement/rally expecting trend to continue. As all trend following system this one is also bound to be jerky when market is ranging like last couple of days. If u notice u can see that a simple oscillator based system would have given u a healthy profit last 3 days. Hence we shd all wait for the market to trend & then start making profit using this system again.

In the trend following systems we should be able to enjoy most part of the trend. so IMO, its better to keep trailing SL in trending market rather than the fixed 20pt profit...becoz we might miss some good moves becoz of 20pts profit exit....

 

[Nava]

Hi all,

IMHO this is momentum based trend following system. Directional bias is high when there's a close beyond EMA's & we enter on retracement/rally expecting trend to continue. As all trend following system this one is also bound to be jerky when market is ranging like last couple of days. If u notice u can see that a simple oscillator based system would have given u a healthy profit last 3 days. Hence we shd all wait for the market to trend & then start making profit using this system again.

Hi,

How do we know whether the particular day is going to be the trending day or rangebound day..? Is there any clue to find it in advance..?

 

[aryabhatta]

its all part of the game guys don't get discouraged, Sh has got good capital preservation rules in place with the max 2 loss a day rule.

the sequence of wins and losses in trading is a random event in the sense somewhat like a coin toss, if you were to toss a uniform coin a 100 times you would achieve a result of around 50 heads and 50 tails, the longer you toss the coin the closer you will come to a 50% head and 50 % tail result. thats the meaning of a 50% probability. But despite this you can never tell the outcome of any single toss in the sequence, it could be heads it could be tails. Even if you get a rare sequence like 10 heads in a row the probability of the next toss turning up a tail is still only 50% and can not be predicted with any higher degree of accuracy. So although we know approx what the final outcome of the sequence will be we can never tell the outcome of any single toss.

Now lets assume the coin is non-uniform and biased to turn up heads 60% of the time instead of 50%. This is exactly what an edge in a trading system is. Streaks of wins and losses are inevitable and we can not predict them but we know in the long run what the outcome will be. This is where discipline and good mm come into the picture. We need to stick with the system

 

[summasumma]

its all part of the game guys don't get discouraged, Sh has got good capital preservation rules in place with the max 2 loss a day rule.

the sequence of wins and losses in trading is a random event in the sense somewhat like a coin toss, if you were to toss a uniform coin a 100 times you would achieve a result of around 50 heads and 50 tails, the longer you toss the coin the closer you will come to a 50% head and 50 % tail result. thats the meaning of a 50% probability. But despite this you can never tell the outcome of any single toss in the sequence, it could be heads it could be tails. Even if you get a rare sequence like 10 heads in a row the probability of the next toss turning up a tail is still only 50% and can not be predicted with any higher degree of accuracy. So although we know approx what the final outcome of the sequence will be we can never tell the outcome of any single toss.

Now lets assume the coin is non-uniform and biased to turn up heads 60% of the time instead of 50%. This is exactly what an edge in a trading system is. Streaks of wins and losses are inevitable and we can not predict them but we know in the long run what the outcome will be. This is where discipline and good mm come into the picture. We need to stick with the system

I want to preserve that tossed coin also :lol:
nice probability writeup.......I think your name matches you well

 

[bhaskar145]

Hi,

How do we know whether the particular day is going to be the trending day or rangebound day..? Is there any clue to find it in advance..?

Market oscilltes betwn trending period & rangebound period & there is no crystal ball that tells u in advance how the market will behave. This is where the position sizing & money management comes to play. I think the "2 failed trade rule" by itself is an indicator that the day is a non trending day.

 

[columbus]

Hi,

How do we know whether the particular day is going to be the trending day or rangebound day..? Is there any clue to find it in advance..?

Go with the trend and assume only RANGE-BOUND MARKET only.If it is
a trending day ,you will be damn lucky.

 

[summasumma]

Go with the trend and assume only RANGE-BOUND MARKET only.If it is
a trending day ,you will be damn lucky.

Very True! but the problem you always loss money with SL in rangebound market(particularly in this system hitting 20 pts up and down).

So one needs to be disciplined enough to dont loss confidence on this system... and wait for that trending time where u will get more than wat u loss.

 

[bhaskar145]

Go with the trend and assume only RANGE-BOUND MARKET only.If it is
a trending day ,you will be damn lucky.

Can u pls elaborate ur statement?

 

[Tradewithhunter]

OK guys - today 3 trades for me:

First trade - gave 11 points loss
Second Trade - gave 20 points profit
Third trade - gave 2 points loss

I stopped trading at this point ... 7 points profit. If we deduct brokerage etc its a breakeven day (or very small loss day if you pay high brokerage).

There was a 4 buy generated which gave 20 point profit in the end ... which we couldnt trade becuase of our 2 consecutive SL rule.

For Day trading, remember you can never have any system which will give you profits each days since markets behave differently on every single day. There is not holy grail .... !

To be successful in day trading .. remember

1. Have some big profit days
2. Have more of breakeven days or small profit days
3. Have some small loss days
4. Zero tolerance for big loss days !!

Since the day we started trading this strategy, we have had only one loss day yesterday where we lost 29 points. Otherwise we have had either big profits days or breakeven/small loss days. The 2 SL rule ensures we never have a big loss day.

Overall, my ledger is still 200+ plus on this strategy since 30th November. No reason at all to lose confidence and throw in the towel.

For people who are still not comfortable trading this yet, should paper trade ..there is no hurry to jump into trading with real money.

As I said, I am also learning new things with you guys about this strategy and we need to fine tune it before we make it a trading plan.

Cheers
SH

 

[summasumma]

Hi Frnds,

Can SH or someone please clarify abt whether i have marked the triggers and entries correctly in the following image?

http://img641.imageshack.us/img641/7140/nf13122010.jpg

I have taken this from icharts premium and its 10th Dec 2010 Nifty Fut. Correct me, if i am wrong.

please clarify Whether the markings(trigger/entry/exit) are correct.

Thanks,
...summasumma

Anybodyyyyyyyy?