Stocks To Keep A Close Eye On

[asnavale]

Hi Anant

I need to say sorry for not adding this in my earlier post - the loss i made on National Alum i have already recovered from another trade taken purely through the triggers issued by your system - so there is absolutely no need to appologize.

I have high regards for the systems developed by you and Savant and have proudly shared these with some of my yahoo group members.

My main aim in taking this as a case study was purely to improve our probabilities in trading/investing.

Had mentioned sometime earlier too that getting signals from your system or any system for that matter is just the first hurdle the next hurdle is trading well and would be extremely grateful if you and Savant could give us some tips on that. (Am not touching money management & psychology etc at this point in time)

For instance what all aspects we need to keep in mind before we place the buy call the next day of the trigger - i.e. how to trade in case of gap up, gap down, open=high, open=low, size of candle on the day of the trigger etc purely from an entry perspective - any additional tools recommended for helping us in live markets.

Also, some tips on the triggers itself - for instance if the trigger is on a red candle then what should be our decision and so on and so forth.

RIC: Anant -

Dear Anant i guess we all are eagerly awaiting for you to reveal to us the modifications that you have been considering for the last couple of months for further filtering you trades - would request you to end the suspense on this front.

Also, would be extremely grateful if you could create a mirroring image of the present afl for trading the short side of the markets too on EOD basis - i personally tried it but with my limited knowledge on AFL's have ended up messing the whole thing.

I do understand that shorting can be done only on the futures segment and most of our members on this thread may not be interested in the same but if it is not too much of an effort then would sincerely request you for the same.

Thanks in advance
Regards
Floyd

Hi floyd,

I have seen this post but did not click the 'Thanks' button. Threrfore, it appears as if I have not seen it.

The system does not consider anything other than the price and the average. So, when a BUY is triggered it is to be executed next trading day as the trigger is generated after the closing of market hours. The execution does not depend on the type of the candle nor gap up/down etc. But as a thumb rule, execute the BUY only after the intraday price equals or goes above previous day's high(the day on which the signal was generated) and wait for a retracement. Then place the Buy order at a price which is acceptable for you. As these triggers are meant for short to medium term, a couple of rupees more or less in buying price will not matter much.

The filtering I am doing is manual. After the 20-MA system generates the triggers I take the EOD data for a couple of years for only these triggers and further proces them in Excel. It is difficult to code an AFL for it at present. It involves some mathematical calculations and I am using Excel for calculations and plot in excel itself. From these calculations I select only those triggers from the list which pass the calculations. I am trying to correlate these calculations with some of the known indicators so that I can substitute the calculations with the indicator and make the filtering easy and mechanical.

For short trading we have to trade only in F&O as it is not possible to short in cash market. But this restriction of F&O only makes it difficult to develop the system with 20-MA strategy. The reason is the F&O data is valid only for 3 months or 65 to 70 trading days. If we are using 20 MA system, the first 20 trading days (equal to almost the first month) are not useful as the first MA value is available on 21st trading day. It is quite possible that by that time the prices would have moved quite appreciably away from the ideal entry level. in cash segment the price data is continuous. But for F&O it is discrete in the sense it is in a set of 3 months data. Once the expiry is over, the data is of no use. Let us say we consider the far month NIFTY now, i.e. October. The F&O data for October series has started now. But we also have NIFTY F&O data for August and September expiry. So there are three sets of values available for NIFTY in August. But the data in August for Aug and Spt series will not be useful for October series. October series has its own data for Aug. This is not the case in cash market. The data in any month is useful in later months. This makes the valid available data for any F&O series limited to a small number and the MA calculation of 20 days further cuts down this by nearly 30%. To draw useful conclusions from such a small set of values is risky. Even back testing will not help as each series is independent and does not influence the others. Therefore a different approach is required. Probably shorter averaging period has to be used but it leads to more noise and whipsaws. Some inputs from veterans in F&O trading would help in formulating a strategy. And may be we have to move this dicussion in another thread where F&O is discussed.

-Anant

 

[fjl24]

Hi Anant

Thanks a million for your detailed response. Also, no issues regarding the new parameters that you are adopting am comfortable with what you have already shared with us all - it does an excellent job for us all.

I would nevertheless be following your existing AFL and also be keeping a track of your posts just to compare my entries.

I would once again like to take this opportunity to thank both you, Savant and Uma for all the efforts taken to help thousand's of members on this thread.

I have myself started trading seriously just lately and i can fully appreciate and understand the efforts involved in the process especially since trading is not my full time profession - So hat's off to you guys - Sorry if i sound too emotional.

I personally use a combination of Harmonics, VSA/VPA & Woodies to take a decision on which scrips to enter and which not once i get a trigger from your system.

RIC: Dear Savant: I guess no one better than you to address this query of mine purely because of the number of years you have been in the markets -

What happens during Bear Markets - I am requesting Anant for a solution to trade the short side of the markets too purely with a concern at the back of my mind that i should not be trading the long side of the markets in a bear market.

Based on your past experiences would you say that a trader/investor can do equally well if he only focuses on the long side of the markets irrespective of whether it's a bull market or a bear market.

I hope i have been able to convey my query/concerns clearly.

Thanks in advance
Regards
Floyd

PS: My query is for the long term and not concerned with the present state of the markets - as of now i am long in all my trades and am only trading the long side of the markets.

Hi floyd,

I have seen this post but did not click the 'Thanks' button. Threrfore, it appears as if I have not seen it.

The system does not consider anything other than the price and the average. So, when a BUY is triggered it is to be executed next trading day as the trigger is generated after the closing of market hours. The execution does not depend on the type of the candle nor gap up/down etc. But as a thumb rule, execute the BUY only after the intraday price equals or goes above previous day's high(the day on which the signal was generated) and wait for a retracement. Then place the Buy order at a price which is acceptable for you. As these triggers are meant for short to medium term, a couple of rupees more or less in buying price will not matter much.

The filtering I am doing is manual. After the 20-MA system generates the triggers I take the EOD data for a couple of years for only these triggers and further proces them in Excel. It is difficult to code an AFL for it at present. It involves some mathematical calculations and I am using Excel for calculations and plot in excel itself. From these calculations I select only those triggers from the list which pass the calculations. I am trying to correlate these calculations with some of the known indicators so that I can substitute the calculations with the indicator and make the filtering easy and mechanical.

For short trading we have to trade only in F&O as it is not possible to short in cash market. But this restriction of F&O only makes it difficult to develop the system with 20-MA strategy. The reason is the F&O data is valid only for 3 months or 65 to 70 trading days. If we are using 20 MA system, the first 20 trading days (equal to almost the first month) are not useful as the first MA value is available on 21st trading day. It is quite possible that by that time the prices would have moved quite appreciably away from the ideal entry level. in cash segment the price data is continuous. But for F&O it is discrete in the sense it is in a set of 3 months data. Once the expiry is over, the data is of no use. Let us say we consider the far month NIFTY now, i.e. October. The F&O data for October series has started now. But we also have NIFTY F&O data for August and September expiry. So there are three sets of values available for NIFTY in August. But the data in August for Aug and Spt series will not be useful for October series. October series has its own data for Aug. This is not the case in cash market. The data in any month is useful in later months. This makes the valid available data for any F&O series limited to a small number and the MA calculation of 20 days further cuts down this by nearly 30%. To draw useful conclusions from such a small set of values is risky. Even back testing will not help as each series is independent and does not influence the others. Therefore a different approach is required. Probably shorter averaging period has to be used but it leads to more noise and whipsaws. Some inputs from veterans in F&O trading would help in formulating a strategy. And may be we have to move this dicussion in another thread where F&O is discussed.

-Anant

 

[fjl24]

Re: Stocks To Keep A Close Eye On - Chapter II

Dear Savant

Till date i have managed to read only upto
http://www.traderji.com/equities/10035-stocks-keep-close-eye-431.html
of the mother thread.

Do not recollect having read anything on the 9/100 system and thus the request.

Any method by which we can run a search on the mother thread to find your post on the 9/100 system rather than troubling you time and again on the same matter.

Thanks in advance
Regards
Floyd

Dear Savant

For the benefit of all members could you please elaborate your personal observations and comments on how to trade the 9-100 SMA indicators.

What should one keep in mind or additional confirmations required for entries/exits once a cross-over happens - rather when should one enter.

What should be the stop loss, how should one decide on the target, do we apply mental trailing stops, when should one exit their positions and what is to be kept in mind then too.

How should one trade it if he/she had observed this cross-over at a later date in time. Any tips for late entrants.

Thanks in advance
Regards
Floyd

 

[SavantGarde]

Hi Floyd,

While One Can Do Just As Well In Bear Market As In Bull Market.... There Are Some Stark Differences That One Must Try & Understand.

a) For Equities Trader It Is Difficult To Do Well During Bear Market
b) While It Is A Lot Better For An Investor
c) For A F&O Trader, He/She Can Do Just As Well In Any Markets, But Real Statistics Is Far Away From What I Have Stated Here In Point (c).

a) For Equities Trader It Is Difficult To Do Well During Bear Market

It Doesn't Require Rocket Science To Understand This Point... Considering An Equities Trader Can't Remain Short Beyond The Trade Day.... I Know SLB Is Available....But Don't Really See Much Of Securities Lending & Borrowing Statistics.

b) While It Is A Lot Better For An Investor

While An Investor Can Sell His Portfolio & Buy Them Back Later, In The Process Can Have Excellent Returns Considering An Investor Will Be Able To Buy Lot More Quantities Or Buy The Same Quantity & Keep The Balance As Profit.

c) For A F&O Trader, He/She Can Do Just As Well In Any Markets, But Real Statistics Is Far Away From What I Have Stated Here In Point (c).

While An F&O Trader Can Remain Positionally Short For As Long As He/She Wants.
......But

Psychologically For 95% Of F&O Traders Who Have Made Their Money Being Long Is Difficult To Remain Short Or Even Take Short Positions For Intraday.

Trading Long Or Short With Equal Comfort Levels Is Where A Very Successful F&O Trader Distinguishes Himself/Herself From Other F&O Traders Who Are Most Comfortable Trading On The Long Side Only.


....And Whenever We Are Going To Witness A Biggish Correction... You Will Get To Know From Here....

Don't Worry, Be Happy!!!

Happy & Safer Trading

SavantGarde

RIC: Dear Savant: I guess no one better than you to address this query of mine purely because of the number of years you have been in the markets -

What happens during Bear Markets - I am requesting Anant for a solution to trade the short side of the markets too purely with a concern at the back of my mind that i should not be trading the long side of the markets in a bear market.

Based on your past experiences would you say that a trader/investor can do equally well if he only focuses on the long side of the markets irrespective of whether it's a bull market or a bear market.

I hope i have been able to convey my query/concerns clearly.

Thanks in advance
Regards
Floyd

PS: My query is for the long term and not concerned with the present state of the markets - as of now i am long in all my trades and am only trading the long side of the markets.

 

[PGDIMES]

Dear Sushilji,

In my short trading career I have found that I am equally good/bad in going long or short in equities and in FNO. But I have a serious problem in holding my profitable trading positions for many days (i.e. I do not follow the trend till the end) and take my profit off the table at the slightest bit of concern.

This month I rolled over my Tata Motors future from the previous month but squared off my position on Friday, even when I believe ( got the assurance of yours as well as Anantji to hold the position) it will see more upticks in the near future. But I held on to my 3 RIL 1050CA bought @ Rs.10 (average price) when the future was trading around 1020. Moreover I am trading in Punj Lloyd futures. (I think I am in love with it, shorted @ 128.20 & booked @120, shorted @ 124 & booked @ 114.50). Again shorted @ 115.50.

Sir, I would like to ask you 3 questions -

1) Is my behavior of taking profit too early, a sign of a bad/fearful trader? I really want to get the answer to this question as I want to be a successful trader & trade for a living in the future.

2) Shall I add on to my Reliance position if Reliance crosses 1000 mark by Monday?

3) Shall I rollover my Punj LLoyd position to the next month or square of in profit/loss at August expiry?

I would be highly obliged if you kindly answer even my first question only.

Regards,
PGDIMES

 

[SavantGarde]

Hi PGDIMES,

I Am Glad That You Are Equally Comfortable With Long/Short Positions, It's A Rare Quality That You Possess & Shows That Your Emotions Are In Check & This Same Quality Shall Keep You In Good Stead In The Long Run

Now Coming To The Other Point, Where You Think You Are Exiting Too Early...

Fear In My Opinion Is Better Than Greed... Especially In The Beginning Stages Of Becoming A Successful Trader....Therefore, What You Consider As 'A Serious Problem' Is Actually A Good Hallmark.

Trend Of Any Kind Rarely Takes The Path Of Least Resistance (Read As: Straight Line).... Take A Scrip Which Has Been In Uptrend, Notice How It Runs Up....Slows Down....Almost Not Moving....Or Having A Slight Downward Bias...& Then Again Resumes Its Uptrend With New Found Energy.

In The Early Stages Of Trading Activity...What Really Happens Is As Follows:

BUY @ 100 Exit 108
Re-Enter @ 110...Exit 114
Re-Enter Again @ 117...Exit @ 120

Now In The Example Illustrated Above One Has Given Up A Few Bucks With Every Subsequent Re-Entry.

As You Become More Confident & Are Able To Correctly Figure Out The Overall Direction Of The Market & The Scrip In Particular...Following Is What Will Happen...

BUY @ 100... Exit @ 108
Re-Enter @ 106...Exit @ 114
Re-Enter Again @ 112....Exit @ 120

I Have Taken For Purpose Of Illustration...Exact Points Of Exit From The First Example To Bring Through Several Points

a) Obvious One Being That You Have Made More Profit Than The Actual Move Of The Scrip In Absolute Terms...Which Amounts To Compounding Your Profit

b) One Is Able To Read When The Scrip Move Is Going Stall, Consolidate & Resume Its Uptrend.

c) It Is Honing Of Your Skill Of Reading Moves...& Therefore Second Illustration Gets You Extra Brownie Points & Pushes You Up By An Extra Notch
--------------------------------------------------------------------------

Now Coming To Your Specifics:

Looks Like You Got In Along With PT, RIL CA May Or May Not Give You Any Profit By Expiry...For You To Breakeven RIL Must Reach 1060 By Thursday (Expiry)

It Will Entirely Depend How Much Of The Short That Exists, Which Are Getting Covered....If The Shorts Get Converted To Longs Then Chances Of Making Some Profit For Your RIL CAs Are Bright.

PUNJLLOYD - Considering It Has Been Plagued By Many Quarters Of Bad Results...& Has Net Short Position... Chances Are It Will Move Up On Account Of Rollover Because Shorts Of The Current Series Needs To Be Covered.

I Haven't Been Tracking Punj But Will Check On The Charts Later To See If I Can Throw Some Extra Light...On What Is Happening With This Scrip.

Happy & Safer Trading

SavantGarde

Dear Sushilji,

In my short trading career I have found that I am equally good/bad in going long or short in equities and in FNO. But I have a serious problem in holding my profitable trading positions for many days (i.e. I do not follow the trend till the end) and take my profit off the table at the slightest bit of concern.

This month I rolled over my Tata Motors future from the previous month but squared off my position on Friday, even when I believe ( got the assurance of yours as well as Anantji to hold the position) it will see more upticks in the near future. But I held on to my 3 RIL 1050CA bought @ Rs.10 (average price) when the future was trading around 1020. Moreover I am trading in Punj Lloyd futures. (I think I am in love with it, shorted @ 128.20 & booked @120, shorted @ 124 & booked @ 114.50). Again shorted @ 115.50.

Sir, I would like to ask you 3 questions -

1) Is my behavior of taking profit too early, a sign of a bad/fearful trader? I really want to get the answer to this question as I want to be a successful trader & trade for a living in the future.

2) Shall I add on to my Reliance position if Reliance crosses 1000 mark by Monday?

3) Shall I rollover my Punj LLoyd position to the next month or square of in profit/loss at August expiry?

I would be highly obliged if you kindly answer even my first question only.

Regards,
PGDIMES

 

[SavantGarde]

Hi PGDIMES,

Just Had A Look At PUNJ, It Has Given A BUY Trigger On 17th With A S/L 113.50 In Equities... This Could Be Good For A Couple Of Weeks... Therefore Please Have A Re-Look At Your Short Position

Happy & Safer Trading

SavantGarde

 

[saivenkat]

Re: Punj loyd, IFCI

Hi PGDIMES,

Just Had A Look At PUNJ, It Has Given A BUY Trigger On 17th With A S/L 113.50 In Equities... This Could Be Good For A Couple Of Weeks... Therefore Please Have A Re-Look At Your Short Position

Happy & Safer Trading

SavantGarde

Savant ji, Yesterday's close of Punj loyd,115.85? can i enter at this point, On a six month perspective.. in which case What should be the SL?

Earlier i have asked about IFCI, i just want to re-confirm is it a good buy at these levels?

Thanks a lot ya.

saivenkat

 

[SavantGarde]

Hi Sekhar,

Please Check The Comment Below Each Scrip.

Sorry Savant sir for missing the required details.
I'm holding the mentioned stocks as below:
3i Infotech --> 85 @ 68.2

Another Couple Of Bucks Pain - HOLD For Sometime

CESC --> 32 @ 396

Book Profit Around 418-422.20

Graphite India --> 60 @ 102

Book Profit Around 107-108 & Re-Enter AtLower Levels Around 94-95

GSFC --> 35 @ 310

Book Profit Around 325-328.90

IRB Infra --> 35 @ 390

Your Entry Price Mentioned Is Wrong...It Maybe 290 Instead Of
390.... Hold Till Ocotber

Power Grid Corp --> 125@ 102

Is Almost At The Bottom There Is No Point Exiting Now.

Sesa Goa --> 50 @ 362

HOLD For Now & Let All The Bad News Play Out.

Shree Cements --> 20 @ 1925.

Temporarily One Can Exit Around 2015-2018.

Happy & Safer Trading

SavantGarde

 

[coolabhi99]

Hi floyd,

I have seen this post but did not click the 'Thanks' button. Threrfore, it appears as if I have not seen it.

The system does not consider anything other than the price and the average. So, when a BUY is triggered it is to be executed next trading day as the trigger is generated after the closing of market hours. The execution does not depend on the type of the candle nor gap up/down etc. But as a thumb rule, execute the BUY only after the intraday price equals or goes above previous day's high(the day on which the signal was generated) and wait for a retracement. Then place the Buy order at a price which is acceptable for you. As these triggers are meant for short to medium term, a couple of rupees more or less in buying price will not matter much.

The filtering I am doing is manual. After the 20-MA system generates the triggers I take the EOD data for a couple of years for only these triggers and further proces them in Excel. It is difficult to code an AFL for it at present. It involves some mathematical calculations and I am using Excel for calculations and plot in excel itself. From these calculations I select only those triggers from the list which pass the calculations. I am trying to correlate these calculations with some of the known indicators so that I can substitute the calculations with the indicator and make the filtering easy and mechanical.

For short trading we have to trade only in F&O as it is not possible to short in cash market. But this restriction of F&O only makes it difficult to develop the system with 20-MA strategy. The reason is the F&O data is valid only for 3 months or 65 to 70 trading days. If we are using 20 MA system, the first 20 trading days (equal to almost the first month) are not useful as the first MA value is available on 21st trading day. It is quite possible that by that time the prices would have moved quite appreciably away from the ideal entry level. in cash segment the price data is continuous. But for F&O it is discrete in the sense it is in a set of 3 months data. Once the expiry is over, the data is of no use. Let us say we consider the far month NIFTY now, i.e. October. The F&O data for October series has started now. But we also have NIFTY F&O data for August and September expiry. So there are three sets of values available for NIFTY in August. But the data in August for Aug and Spt series will not be useful for October series. October series has its own data for Aug. This is not the case in cash market. The data in any month is useful in later months. This makes the valid available data for any F&O series limited to a small number and the MA calculation of 20 days further cuts down this by nearly 30%. To draw useful conclusions from such a small set of values is risky. Even back testing will not help as each series is independent and does not influence the others. Therefore a different approach is required. Probably shorter averaging period has to be used but it leads to more noise and whipsaws. Some inputs from veterans in F&O trading would help in formulating a strategy. And may be we have to move this dicussion in another thread where F&O is discussed.

-Anant

Dear Anant,

I think I have a solution for this data problem of F&O stocks.

I have the data for each of the scrips in F&O right from the day they have been added to the F&O segment and would be more than glad and would feel honoured to be of any help.

Do let me know how do we take this forward??

Regards & All the very best....Keep up the good work......

Abhinay