SH's MArket Correction Prediction Strategy

[a1b1trader]

Good to see the thread is still active ....

Cheers
SH

Welcome back

 

[anup]

Good to see the thread is still active ....

Cheers
SH

Tradewith hunter: Welcome back ..Great strategy...Following this with the help of Anil negi, T4j,TP and other members..

 

[karthik_sri]

Good to see the thread is still active ....

Cheers
SH

Welcome back Sirji....getting a feeling like Sachin back into One Day matches!:thumb:

 

[trade4joisar]

This is one of my favorite strategy which when comes, i don't look at anything else.

From last few weeks, i am analyzing 100 ema in lower TFs and it is working same as it is working in daily TF.

So here is my observations. Daily we have 6.25 hrs of sessions.

In daily it requies 28 weeks to touch 100 ema, so if we consider 5 sessions per week, so 140 candles.

5 Mins
=====
In 1 hour, there are 12 candles, so price requires 11.45 hrs to touch 100 ema.

30 mins
=====
In 1 hour, there are 2 candles, so price requires approx 12 daily session to touch 100 ema.

This is my observations and somwhere SH also mentioned about using 100 ema in 1 hour, but i have not looked at 1 hour for now.

So similar way one can take position (after 10.30 hours in 5 mins, 11the day on 30 mins) targetting 100 ema in these TFs.

Please share your views on this. Please correct me if you see otherwise (success ratio <90%).

Today again SMC in 5 mins for 100 ema worked.

Candle touched 100 ema at 14:00 on 7th Nov, 2013.

So on 11th Nov, 2013 at 13:00 it touched again.

7th Nov = 90 mins
8th Nov = 375 mins
11th Nov = 225 mins
----------
690 mins

Which comes to around 11.30 hours.

SH,

In your absence i have tried SMC on lower timeframes without your permission , but hope i am on right path at least.

Now you are here, so if you will put your signature on it then stone will be converted into diamond.

But yes, there is always space for improvements (and there will be) to make it more usable.

 

[anilnegi]

Good to see the thread is still active ....

Cheers
SH

Good to see you back SH or is it just a glimpse of you

anil

 

[anilnegi]

T4J - I hope you shorted on 3rd Nov as well ? Thanks for keeping this thread alove ...

Cheers
SH

But 3 EMA was not touched at all

anil negi

 

[trade4joisar]

But 3 EMA was not touched at all

anil negi

As per SMC, if 3 ema not touched for 2 consecutive days, then we need to short with target of 3 ema.

 

[trade4putuval]

Tata Steel (SMC in shorter timeframes)

This is one of my favorite strategy which when comes, i don't look at anything else.

From last few weeks, i am analyzing 100 ema in lower TFs and it is working same as it is working in daily TF.

So here is my observations. Daily we have 6.25 hrs of sessions.

In daily it requies 28 weeks to touch 100 ema, so if we consider 5 sessions per week, so 140 candles.

5 Mins
=====
In 1 hour, there are 12 candles, so price requires 11.75 hrs to touch 100 ema.

30 mins
=====
In 1 hour, there are 2 candles, so price requires approx 12 daily session to touch 100 ema.

This is my observations and somwhere SH also mentioned about using 100 ema in 1 hour, but i have not looked at 1 hour for now.

So similar way one can take position (after 10.30 hours in 5 mins, 11the day on 30 mins) targetting 100 ema in these TFs.

Please share your views on this. Please correct me if you see otherwise (success ratio <90%).

Please find my analysis on Tata Steel for shorts. It qualifies for 5 minutes and 30 minutes SMC.
http://www.traderji.com/futures/67625-diary-315-trader-27.html#post898686

 

[trade4putuval]

Arvind (Short) - SMC Candidate


I have identified Arvind as a potential SMC candidate. My views here.
http://www.traderji.com/futures/67625-diary-315-trader-27.html#post899350

 

[trade4joisar]

OK dude - here you go.

How to earn 25% to 50% ROI per trade twice every year


First of all, the trades are done in options. If you invest 50K in buying options, you can expect the options to become 60K to 70K within a month (sometimes more!) and hence 25% - 50% returns on investment. Anyone ready to invest larger amounts, My suggestion would be to start booking gradual profits starting from 10% onwards.

Success Ratio is again above 90% (based on my backtest which is usually pretty RAW since I dont know how to build AFLs etc). I am more than happy to be standing corrected if success ratio is lower than that.

This is also a market neautral strategy i.e it doesnt matter whether market goes up or down .. a trader will still earn.


Trade Setup


Ok - I have already explained how NIfty Futures likes to return to some key EMAs within a definite period of time.

One of the key EMA is 100 EMA which Nifty has to retest within 6-7 months. HOwever please note .. Nifty HATES 100 EMA ... i.e it doesnt like to stick around 100 EMA for long. It will either shoot back towards the main trend after getting resisted/supported by 100 EMA or if its a reversal it will shoot off in the opposite direction.

The key word is it 'shoots off' in one direction or the other but in no way it will stick around 100 EMA for long.

Now once we know this, how do we exploit this knowledge to our advantage?? Simple... As soon as Nifty touches 100 EMA ... we buy OTM (out of money) calls and puts both and hold until one of them becomes ITM (In the money). As soon as one of the option becomes ITM .. it will give you 25% to 50% returns over investment (even if the other option leg is expiring worthless).

For eg look at 3rd Nov candle which retested 100 EMA at 4650 odd levels. At that point one can buy 4800 Calls and 4500 Puts and hold. Since it was start of the month these options would not have costed more that 50-60 odd points each or Total investment of Rs 5000-6000 per pair of call and put taken together.

Now since Nifty hated 100 EMA.. it jumped back in the direction of the main trend making a high of 5024 on 11th November. At this point our 4800 call was selling for 200+ points and our puts were almost worthless. If we square off both calls and puts at that stage we get Rs 10000 per pair which is a WHOPPING 100% returns on investment.

I actually did not wait until 11th Nov but I squared off my option pairs on 9th Nov when Nifty touched 4850 levels and was satisfied with 50%+ profits.

Similarly you can check out what happened after 24th March when 100 EMA was touched at around 2990. After 9 trading days Nifty was sitting pretty at 3350 levels again generating awesome ROI.

you see the game plan?? :lol: The thumb rule is as soon as NIfty has moved 5% -6% in any direction after kissing 100 EMA .. your market neautral option strategy should be in 25% profits or above.

Thats how you can get 25% to 50% ROI atleast twice an year (since we know every 6th-7th month 100 EMA will have to be retested).

Happy Backtesting again :thumb:

Cheers
SH

In spot, 100 ema for Nifty stands at 5947 and we are in expiry week.

Let see how it goes.