Sniffer System
- Thread starter sanjaynjain
- Start date
hiii friend
i had found sniffer trading system with help of this system i do very well since last year. so i put here may be help full for new baby
My core strategy is ....buy dips during uptrends, short rallies during downtrends. I work entirely from weekly charts and I spend about an hour or so each week in analysing the market. I rarely look at the market during the week, and if I do its only to see how a trade is going....I don't do any analysis or make any decisions from daily charts.
I do no fundamental analysis except to let the weekly trend give me some idea of the soundness or otherwise of a company's fundamentals.
I can't remember the last time I looked at the financial pages or read a company report or a broker's newsletter.
I have no use for either trend lines or volume analysis. I don't look for the dozens of chart patterns that get so much coverage....I'm mainly interested in trends and retracements.
The refinements I've made in the last year or so have been to use a trend strength indicator to ensure that I'm trading not just trends, but STRONG trends. Also I now use the scanner in Market Analyst to streamline the selection process. For a long time the Market Analyst scanner was very second rate, but over the last year or so its undergone major surgery and is now very good and very simple to use.
I've also changed my moving averages, but this has been more for entertainment value than for practical purposes.
I use the CCI indicator on a setting of 3 to find pullbacks (or rallies during a downtrend). The CCI is purely to give the scanner something to search for...if I was eyeballing each chart I'd visually identify the pullbacks without using an indicator like CCI.
I trade only the blue chips....there are plenty to choose from, more than enough to supply you with plenty of trades even if you follow only bluechips
Far from being the 'slow moving dinosaurs of the stock market', as is commonly believed, many blue chips have posted anywhere between 2 and 10 times the gain of the overall market in recent times. Some have done even better than that.
A trend following system like mine performs best in liquid stocks that tend to trend in a relatively stable manner. The good liquidity enhances the effectivness of stop losses. (stops tend to become less effective in thinly traded stocks.)
The template I put on my WEEKLY charts is...
* 11 period ADX with a horizontal line set at 25.
* 3 period CCI histogram with a horizontal line drawn at the zero level.
* 13 week and 26 week EMA's.
Here's what I do in my once a week analysis each Saturday morning...total time spent is about an hour to analyse all blue chips that I follow
First, check the WEEKLY chart of the All Ords
If the 13 EMA is above the 26 EMA, both are rising and pulling further apart, and the tops and bottoms of the price action are getting progressively higher, then you know the overall market is bullish and you ABSOLUTELY MUST trade ONLY long positions.
The mirror image of these rules apply to identify a downtrend. If the overall market is downtrending, you ABSOLUTELY MUST trade ONLY short positions.
I cannot overstate the benefits of being in tune with the overall market...its VERY important.
With just a couple of mouse clicks the stocks picked by this scan can be put into a separate workbook. My weekly template is put on these stocks. Now I look at each stock one by one, but at this stage I'm only interested in the ADX, not the price action. As each chart comes up I'm looking at the bottom right corner of the screen to see if the ADX is above the horizontal line which is set at 25. It takes only a one second glance to check the ADX reading, and if its not strong enough, a further two seconds to put the next chart up on the screen. It sounds inconceivable that you can check out a new chart every three seconds, but remember that the process so far has been mainly to weed out the undesirables rather than to pick the winners.
If I come across a potential winner (one whose ADX is reading 25 or higher), I then check it's price action, Moving Averages etc, and if it shapes up OK in those areas I transfer it to a workbook which I've called 'Watchlist'....this takes just a couple of mouse clicks.
Out of my workbook of all blue chips the scanner usually finds about 10% - 60 odd stocks, that are giving the CCI signal. At less than 5 seconds per chart it doesn't take long to whiz through this list and cull most of them, and save the best 8 or 10 to a watchlist.
The final selection on the top 8 or 10 is purely visual. If the overall market is bullish I'm looking for the stock to have....
* Higher tops and higher bottoms, 13 EMA above 26 EMA, daylight (space) between the two MA's, both MA's rising and pulling apart.
* ADX reading of 25 or higher.
* Stock must be in the process of a pullback.
ENTRY...
Put a buy stop or a buy limit order 1 tick above the candle that pulls CCI below zero. Lower the buy order each week if necessary to just above the top of the last candle. If/when the uptrend resumes, your entry order will be filled.
OR
For a more conservative entry, put the buy order 1 tick above the first bullish candle following the pullback.
All buy orders are placed on a GTC (good till cancelled) basis.
STOP LOSS...
Attach an 'If done' stop loss order to your buy order. If your buy order is done (filled), your stop loss will automatically be put in place.
I like to place the stop somewhere between 8% to 10% from entry, but I've used a 5% stop on occasion. 8 to 10% gives the market a bit of room to fluctuate without stopping you out.
For long positions its prudent to pay a small extra charge to use a GSO (guaranteed stop loss order), if your broker offers this facility. A GSO is designed to protect you against a severe price slump that could gap past your stop loss order.
TRAILING STOPS.
As the trend moves in our favour we need to progressively lock in profit. I do this by moving my stop up to just below each swing low on the weekly chart. Each swing low is of course preceded by a swing high. When each pullback ends, and the revitalised uptrend moves above the last swing high, then and only then will I move my stop loss up to 2% under the swing low.
I repeat this process each time a higher swing low is made, until finally the trend dies and my stop is hit, and I'm taken out of the trade.
There's one other part to my trailing stop strategy....if a weekly candle penetrates the 26 week EMA, at the start of the next week I'll move my stop up to 2% below the bottom of that candle. A penetration of the 26 EMA can sometimes be a warning that the trend is getting tired, in which case its prudent to take the precautionary action of moving your stop up to just under that candle.
MONEY MANAGEMENT.
2% of my trading capital is the maximum I'm willing to risk on a trade.
SUMMARY.
Use weekly charts exclusively.
Once a week check the weekly trend of the overall market, and trade only in that direction.
Find stocks that are trending in the same direction as the market as a whole, but are currently retracing.
Use the ADX to measure the trend strength of these stocks.
Buy these stocks as they finish their retracement and resume their trend.
ALWAYS place a stop loss order, and make it a guaranteed stop loss if you're trading long.
Use trailing stops to progressively lock in profits as the trend moves your way, and to take you out of the trade when the trend dies.
Use the 2% money management rule to prevent serious depletion of your trading capital from a losing trade.
If the overall market is bearish, use the mirror image of the system to go short in bearish stocks.
CONCLUSION.
By cutting losing trades quickly and letting winning trades run as long as the trend remains healthy, by trading only in strongly trending stocks, and by trading only in the direction of the overall market, this system virtually ensures an acceptable ratio of winning trades to losing trades, and that the average profit will be considerably
i had found sniffer trading system with help of this system i do very well since last year. so i put here may be help full for new baby
My core strategy is ....buy dips during uptrends, short rallies during downtrends. I work entirely from weekly charts and I spend about an hour or so each week in analysing the market. I rarely look at the market during the week, and if I do its only to see how a trade is going....I don't do any analysis or make any decisions from daily charts.
I do no fundamental analysis except to let the weekly trend give me some idea of the soundness or otherwise of a company's fundamentals.
I can't remember the last time I looked at the financial pages or read a company report or a broker's newsletter.
I have no use for either trend lines or volume analysis. I don't look for the dozens of chart patterns that get so much coverage....I'm mainly interested in trends and retracements.
The refinements I've made in the last year or so have been to use a trend strength indicator to ensure that I'm trading not just trends, but STRONG trends. Also I now use the scanner in Market Analyst to streamline the selection process. For a long time the Market Analyst scanner was very second rate, but over the last year or so its undergone major surgery and is now very good and very simple to use.
I've also changed my moving averages, but this has been more for entertainment value than for practical purposes.
I use the CCI indicator on a setting of 3 to find pullbacks (or rallies during a downtrend). The CCI is purely to give the scanner something to search for...if I was eyeballing each chart I'd visually identify the pullbacks without using an indicator like CCI.
I trade only the blue chips....there are plenty to choose from, more than enough to supply you with plenty of trades even if you follow only bluechips
Far from being the 'slow moving dinosaurs of the stock market', as is commonly believed, many blue chips have posted anywhere between 2 and 10 times the gain of the overall market in recent times. Some have done even better than that.
A trend following system like mine performs best in liquid stocks that tend to trend in a relatively stable manner. The good liquidity enhances the effectivness of stop losses. (stops tend to become less effective in thinly traded stocks.)
The template I put on my WEEKLY charts is...
* 11 period ADX with a horizontal line set at 25.
* 3 period CCI histogram with a horizontal line drawn at the zero level.
* 13 week and 26 week EMA's.
Here's what I do in my once a week analysis each Saturday morning...total time spent is about an hour to analyse all blue chips that I follow
First, check the WEEKLY chart of the All Ords
If the 13 EMA is above the 26 EMA, both are rising and pulling further apart, and the tops and bottoms of the price action are getting progressively higher, then you know the overall market is bullish and you ABSOLUTELY MUST trade ONLY long positions.
The mirror image of these rules apply to identify a downtrend. If the overall market is downtrending, you ABSOLUTELY MUST trade ONLY short positions.
I cannot overstate the benefits of being in tune with the overall market...its VERY important.
With just a couple of mouse clicks the stocks picked by this scan can be put into a separate workbook. My weekly template is put on these stocks. Now I look at each stock one by one, but at this stage I'm only interested in the ADX, not the price action. As each chart comes up I'm looking at the bottom right corner of the screen to see if the ADX is above the horizontal line which is set at 25. It takes only a one second glance to check the ADX reading, and if its not strong enough, a further two seconds to put the next chart up on the screen. It sounds inconceivable that you can check out a new chart every three seconds, but remember that the process so far has been mainly to weed out the undesirables rather than to pick the winners.
If I come across a potential winner (one whose ADX is reading 25 or higher), I then check it's price action, Moving Averages etc, and if it shapes up OK in those areas I transfer it to a workbook which I've called 'Watchlist'....this takes just a couple of mouse clicks.
Out of my workbook of all blue chips the scanner usually finds about 10% - 60 odd stocks, that are giving the CCI signal. At less than 5 seconds per chart it doesn't take long to whiz through this list and cull most of them, and save the best 8 or 10 to a watchlist.
The final selection on the top 8 or 10 is purely visual. If the overall market is bullish I'm looking for the stock to have....
* Higher tops and higher bottoms, 13 EMA above 26 EMA, daylight (space) between the two MA's, both MA's rising and pulling apart.
* ADX reading of 25 or higher.
* Stock must be in the process of a pullback.
ENTRY...
Put a buy stop or a buy limit order 1 tick above the candle that pulls CCI below zero. Lower the buy order each week if necessary to just above the top of the last candle. If/when the uptrend resumes, your entry order will be filled.
OR
For a more conservative entry, put the buy order 1 tick above the first bullish candle following the pullback.
All buy orders are placed on a GTC (good till cancelled) basis.
STOP LOSS...
Attach an 'If done' stop loss order to your buy order. If your buy order is done (filled), your stop loss will automatically be put in place.
I like to place the stop somewhere between 8% to 10% from entry, but I've used a 5% stop on occasion. 8 to 10% gives the market a bit of room to fluctuate without stopping you out.
For long positions its prudent to pay a small extra charge to use a GSO (guaranteed stop loss order), if your broker offers this facility. A GSO is designed to protect you against a severe price slump that could gap past your stop loss order.
TRAILING STOPS.
As the trend moves in our favour we need to progressively lock in profit. I do this by moving my stop up to just below each swing low on the weekly chart. Each swing low is of course preceded by a swing high. When each pullback ends, and the revitalised uptrend moves above the last swing high, then and only then will I move my stop loss up to 2% under the swing low.
I repeat this process each time a higher swing low is made, until finally the trend dies and my stop is hit, and I'm taken out of the trade.
There's one other part to my trailing stop strategy....if a weekly candle penetrates the 26 week EMA, at the start of the next week I'll move my stop up to 2% below the bottom of that candle. A penetration of the 26 EMA can sometimes be a warning that the trend is getting tired, in which case its prudent to take the precautionary action of moving your stop up to just under that candle.
MONEY MANAGEMENT.
2% of my trading capital is the maximum I'm willing to risk on a trade.
SUMMARY.
Use weekly charts exclusively.
Once a week check the weekly trend of the overall market, and trade only in that direction.
Find stocks that are trending in the same direction as the market as a whole, but are currently retracing.
Use the ADX to measure the trend strength of these stocks.
Buy these stocks as they finish their retracement and resume their trend.
ALWAYS place a stop loss order, and make it a guaranteed stop loss if you're trading long.
Use trailing stops to progressively lock in profits as the trend moves your way, and to take you out of the trade when the trend dies.
Use the 2% money management rule to prevent serious depletion of your trading capital from a losing trade.
If the overall market is bearish, use the mirror image of the system to go short in bearish stocks.
CONCLUSION.
By cutting losing trades quickly and letting winning trades run as long as the trend remains healthy, by trading only in strongly trending stocks, and by trading only in the direction of the overall market, this system virtually ensures an acceptable ratio of winning trades to losing trades, and that the average profit will be considerably
I dont have separate formula for metastock. I am just applying the ADX, CCI, EMAs (sniffer system) AS explained by sanjaynjain in weekly chart. for your reference i am reposting the original here.
WITH REGARDS
Rajesh29
WITH REGARDS
Rajesh29
Thanks for your response. I did read sanjayjain's original post. Though I understand what he is saying I am not an expert to code the metastock and as such I am not able to scan for such conditions.
Would you mind given me the explorer formulas which would throw the scrips based on the sniffer system, then it would be easy I think to go to that particular chart and view them. Now I have to go one chart after another and it is very time consuming.
Thanks for your assistance.
Regards
Hi Rajesh/Novice
I too have done the same. What you see my chart is daily13 Ema(Blue) Daily 26EMA(Bright green) weekly EMA 13 in Yellow and EMA 26 Violet on a daily chart. In adddition you will see Hull moving average in white. If the price is above Hull MA it is a buy. More on this please read link given earlier
Regards
ken
I too have done the same. What you see my chart is daily13 Ema(Blue) Daily 26EMA(Bright green) weekly EMA 13 in Yellow and EMA 26 Violet on a daily chart. In adddition you will see Hull moving average in white. If the price is above Hull MA it is a buy. More on this please read link given earlier
Regards
ken
Code:
Ticker Date/Time FMA BUY Target1 Target2 Target3 Volume
EDUCOMP11/23/2007 3252.53 3300.90 3812.55 4179.53 4668.84 63377
HCLTECH 11/23/2007 295.99 302.75 323.68 340.54 363.02 631961
JINDALSTEL11/23/2007 10819.41 12105.40 14367.2616389.9419086.83 313315
ORIENTPPR11/23/2007 684.59 694.90 806.50 881.80 982.19 30674
REIAGRO 11/23/2007 799.68 801.10 918.66 993.35 1092.93 165747
STERLINBIO11/23/2007 166.16 167.65 183.93 194.53 208.68 362435I have coded based on my limited understanding.. AFL experts / seniors pls suggest to improvise the code for the sniffer system.
I usually apply this to the Derivatives list.. There will be differences to the list provided by kenneth. I am not sure whether some additional conditions need to be built to this oversimplified code. Suggestions from other experts are welcome to improve upon.
Kenneth pls suggest if any modifications to be done to this.
.......................
TimeFrameSet(inWeekly);
Cond1 = IIf(EMA(Close,13)>EMA(Close,26),1,-1);
Cond2 = IIf(ADX(11)>25,1,-1);
Cond3 = IIf(CCI(3)>0,1,-1);
TimeFrameRestore();
Buy= (Cond1>0 AND Cond2>0 AND Cond3 >0);
......................
John.
I usually apply this to the Derivatives list.. There will be differences to the list provided by kenneth. I am not sure whether some additional conditions need to be built to this oversimplified code. Suggestions from other experts are welcome to improve upon.
Kenneth pls suggest if any modifications to be done to this.
.......................
TimeFrameSet(inWeekly);
Cond1 = IIf(EMA(Close,13)>EMA(Close,26),1,-1);
Cond2 = IIf(ADX(11)>25,1,-1);
Cond3 = IIf(CCI(3)>0,1,-1);
TimeFrameRestore();
Buy= (Cond1>0 AND Cond2>0 AND Cond3 >0);
......................
John.
Code:
Ticker Date/Time FMA BUY Target1 Target2 Target3 Volume
BEML 11/26/2007 1708.34 1775.40 2001.92 2178.54 2414.03 85324
COLGATE 11/26/2007 389.12 394.00 429.34 452.79 484.07 143862
CROMPGREAV11/26/2007 420.29 434.00 496.86 544.54 608.12 816667
DEWANHOUS11/26/2007 143.75 147.70 168.95 183.15 202.08 128831
IDFC 11/26/2007 191.36 197.35 228.40 249.96 278.71 6780672
INDIABULLS11/26/2007 768.04 789.85 911.03 994.97 1106.90 2404519
INDIAINFO11/26/2007 1136.61 1153.65 1392.83 1546.30 1750.93 295675
JSWSTEEL11/26/2007 937.61 981.55 1075.89 1154.29 1258.83 593468
JYOTISTRUC11/26/2007 287.56 290.20 326.40 350.71 383.12 35978
KESORAMIND11/26/2007 560.41 574.20 666.04 727.63 809.75 50456
MYSORECEM11/26/2007 52.26 53.50 62.40 68.19 75.90 288725
NIITLTD 11/26/2007 125.36 131.55 145.71 157.50 173.22 426250
SAIL 11/26/2007 257.03 265.25 298.20 323.00 356.07 8677223
TATASTEEL11/26/2007 844.10 850.45 994.73 1089.51 1215.89 1699452
TITAN 11/26/2007 1520.60 1521.50 1690.29 1814.60 1980.33 101566
Ken Bhaiya
I Have Just Started Using Yahoo Finance Technical Charts For Trading .... But The Charts Are 15 Minutes Delayed ,can U Plz Suggest Something So That I Can Get Real Time Charts.. I Am Trading Thru Icici .. They Provide Intraday Live Charts .. But Not Techncal Charts
Regards
Tulika
I Have Just Started Using Yahoo Finance Technical Charts For Trading .... But The Charts Are 15 Minutes Delayed ,can U Plz Suggest Something So That I Can Get Real Time Charts.. I Am Trading Thru Icici .. They Provide Intraday Live Charts .. But Not Techncal Charts
Regards
Tulika
Regards
ken
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