Thoughts on Day/Swing Trading Part 2

[Smart_trade]

Dear Smart_Trade

I am paper trading one of your methods that you have elaborated on some other forum.

I am doing the following:-
1. Spot Bani Nifty charts. 30 period MA, 5 min charts.
2. I treat gap days same as non gap days.
3. If prices under MA and MA falling, I short the break of pivot lows, previous PH is my Stoploss.
4. In the attached image, I have shown Adds as a new trade.
5. I am taking 2 Adds even for buys.
6. My risk per trade is Rs 1000 which is 1% of my portfolio of 1 Lakh.
7. Even for my Adds, I am taking the quantity based on risk of Rs 1000. I understand that when I have 3 open positions (original position + 2 Adds), my risk per trade is more than 1000Rs, but by the time I take the 2nd Add, the SL level is moved in my favour so the total risk is very less than 3000Rs even though slightly more than Rs 1000 but please ignore this for the moment.
8. I understand that bank nifty can be traded only in futures and the quantities I have shown are not possible in reality but please ignore this point for the moment.

In the past 3 days my total returns (paper trades only) for a risk per trade of Rs 1000 (1% of 1L) are Rs 31000 i.e. 31%.

At the end of the first day in which the returns were 9%, I was saying to myself that even if I get 1 such day in a month and for all the remaining days I am able to break even, its good enough.

I am trying to use this strategy in nifty, Tata motors and DLF but find it very difficult and rather very easy doing it on bank nifty.

I have following questions which I request you to answer:-
1. Am I missing something, are the returns 31% really? I have charts for these 3 days as well which I can attach.
2. Why it is easier to trade BNF than NF or other stocks?
3. Can you please recommend a couple of stocks on which I can use this strategy so that I dont have to start my trading in futures initially and I can day trade (long or short) individual stocks.

I plan to paper trade this strategy upto August end and begin trading from September. Your reply will help me a lot to do any fine tuning in this period.

Please be assured that I have read all threads started by you on both the forums I dont know how many times.

I have printouts of your strategy and the charts and I am helping my wife teach to understand this strategy with the explanation of pivots etc.

I have a lot more to write but I dont want to elongate this post of mine and dilute it.

I request you to reply.

Regards,
ptk

Could you please post charts for 3 days showing trades, stoploss and profit taking levels along with adds ?

Smart_trade

 

[ptk]

Dear Smart_Trade,

Please find attached the links:-

http://img39.imageshack.us/img39/6032/525.png

http://img17.imageshack.us/img17/3826/l2kt.png

http://img4.imageshack.us/img4/9948/hmll.png

Regards,
ptk

 

[Smart_trade]

Good trades ptk....

The return is 31 % as you caught some good moves with 2 adds....very good.

The method will work on any scrip which has a large daily range and works well on pivots.

Well done....keep it up.

Smart_trade

 

[Gaur_Krishna]

ST da,

Sorry for reposting the same. Plz answer when you have time.

Regards,
Gaur_Krishna

ST da,

Thanks for sharing trades on charts as well. I have some doubts:

1. Like SWIFT, if we have to plot MA line to indicate long term trend, what MA (I mean 60MA , 30MA etc) is OK for hourly candle? (This is positional)

2. Can these trades be taken mechanically? I mean, as we know previous pivot low, can we just place a buy order below the PL (+filter of 5 in BNF) and once it is filled, place SL at previous PH?

3. How to avoid getting into ranging period, because if place order during formation of hourly candle and if BNF getts rangebound, are we supposed to continue till trend resumes or SL hit?

4. Also, thanks for input on ADX above 20 to mark trending period. Do you use default period of ADX(14) for 5 min, hourly & daily?

5. How to handle GAPS: If its against, do you exit immediately if the SL is broken? I think YES! Plz confirm.

6. Does 21SMA (holy grail) work for hourly candle as well? In that case 60 SMA would be fine to indicate LT trend?

Sorry for too many questions.....

Regards,
Gaur_Krishna

 

[trade4joisar]

Hello ST sir,

Whenever you have time, please update TDST system and its status.

 

[ritesh.bafna88]

hello,

can anyone explain what is pipvot high and low?

 

[timepass]

hello,

can anyone explain what is pipvot high and low?

A recent post on pivots..Thank Anil_s_trivedi for it.
http://www.traderji.com/general-trading-investing-chat/60900-timepasss-notes-8.html#post834180

Also, look up "Teach a man to fish..." thread.
http://www.traderji.com/technical-analysis/6072-teach-man-fish.html

 

[midas touch]

Bank Nifty charts. 30 period MA, 5 min charts.

is that 30SMA or 60 SMA for BNF,ST Da ?

tnx

 

[ptk]

Good trades ptk....

The return is 31 % as you caught some good moves with 2 adds....very good.

The method will work on any scrip which has a large daily range and works well on pivots.

Well done....keep it up.

Smart_trade

Dear Smart_Trade,

Thanks a lot for your reply. You have no idea how much your reply has helped me. My confidence has got an immense boost. I have been struggling for so many years with the stock market in general.

I am based in Pune and I work in IT. These days job market isn't that good and its been there on my mind for quite sometime to have a secondary source of income and stuff like that.

I in fact lost quite a lot of money in stocks by doing all the wrong things...traded options futures paid people for calls...you name it I have done it. Finally I stopped everything in 2007.

Came across reading about Warren Buffet through a friend. Read all his annual shareholder reports countless times. Things got a lot clear about the long term. Devised a strategy by 2008 end for investing (roughly its to buy at nifty PE ratios of around 10-12 when stocks are available at book values lump sum and then buy every month till the PE is under 15. Sell everything when the PE is higher than 25 and sit out of the market with the money parked in FDs). I thought (and still think) this strategy will work decently in the long run but I am still waiting for the right time..

This was about long term, and I have kept some money aside for the above after taking care of all the expenses retirement etc, in short, even if the above money becomes 0 I will not bleed. And if Buffet is to be believed the returns will be far higher than 0 is my belief.

But I continued to have nightmares about job loss and secondary source of income etc. Then I came across Traderji, I read various articles...but somehow did not trade...then I came across that other forum and read various articles from Saint and you. No doubt Saint has helped immensely to clarify various aspects of short term trading, it were your posts with which I connected a lot better. To this day, I do not understand DERL, ERL VPH, VPL and that Level 2 stuff even after trying some many times.

I focused on your threads. Read oscillators thread, read money management ideas in these threads (read that 20 wins / 20 loss game) everything made so much sense. Read your replies to people who were literally criticizing you for having copied stuff etc...your replies were so positive, got so much respect for you.

You have made a permanent impact on my life through your postings in a similar way that Buffet has made through his writings. It has gone beyond making money and more about philosophy.

These days I have some thread from you open and an annual latter from Buffet open and I keep reading either stuff when I get some free time.

Tried to send you a PM but I am not allowed to do that, I don't know why.

It is now hard to imagine my trading life without you and I really hope that you remain active on this forum(unlike the other one) and I request you to share some contact information of yours where I can get in touch with you (even an email ID is fine).

I had said in my earlier post that I have a lot more to write, and its about all this.

I went home yesterday and told my wife that I have got a reply from you about my trades and that I am on the right track and we were so happy to get an acknowledgment from the Guru himself.

Sorry for being lengthy. Thanks a lot and be assured that there will be so many guys like me who have your impact on their lives even though they haven't explicitly made a mention about it.

Thanks again,

Regards,
ptk

 

[VJAY]

Dear Smart_Trade,

Thanks a lot for your reply. You have no idea how much your reply has helped me. My confidence has got an immense boost. I have been struggling for so many years with the stock market in general.

I am based in Pune and I work in IT. These days job market isn't that good and its been there on my mind for quite sometime to have a secondary source of income and stuff like that.

I in fact lost quite a lot of money in stocks by doing all the wrong things...traded options futures paid people for calls...you name it I have done it. Finally I stopped everything in 2007.

Came across reading about Warren Buffet through a friend. Read all his annual shareholder reports countless times. Things got a lot clear about the long term. Devised a strategy by 2008 end for investing (roughly its to buy at nifty PE ratios of around 10-12 when stocks are available at book values lump sum and then buy every month till the PE is under 15. Sell everything when the PE is higher than 25 and sit out of the market with the money parked in FDs). I thought (and still think) this strategy will work decently in the long run but I am still waiting for the right time..

This was about long term, and I have kept some money aside for the above after taking care of all the expenses retirement etc, in short, even if the above money becomes 0 I will not bleed. And if Buffet is to be believed the returns will be far higher than 0 is my belief.

But I continued to have nightmares about job loss and secondary source of income etc. Then I came across Traderji, I read various articles...but somehow did not trade...then I came across that other forum and read various articles from Saint and you. No doubt Saint has helped immensely to clarify various aspects of short term trading, it were your posts with which I connected a lot better. To this day, I do not understand DERL, ERL VPH, VPL and that Level 2 stuff even after trying some many times.

I focused on your threads. Read oscillators thread, read money management ideas in these threads (read that 20 wins / 20 loss game) everything made so much sense. Read your replies to people who were literally criticizing you for having copied stuff etc...your replies were so positive, got so much respect for you.

You have made a permanent impact on my life through your postings in a similar way that Buffet has made through his writings. It has gone beyond making money and more about philosophy.

These days I have some thread from you open and an annual latter from Buffet open and I keep reading either stuff when I get some free time.

Tried to send you a PM but I am not allowed to do that, I don't know why.

It is now hard to imagine my trading life without you and I really hope that you remain active on this forum(unlike the other one) and I request you to share some contact information of yours where I can get in touch with you (even an email ID is fine).

I had said in my earlier post that I have a lot more to write, and its about all this.

I went home yesterday and told my wife that I have got a reply from you about my trades and that I am on the right track and we were so happy to get an acknowledgment from the Guru himself.

Sorry for being lengthy. Thanks a lot and be assured that there will be so many guys like me who have your impact on their lives even though they haven't explicitly made a mention about it.

Thanks again,

Regards,
ptk

Too emotional post ptk...same feeling happened in me when I got reply from saint sir 4 year before ....yes ST da is one nice humen being who helped a lot many newbies from his posts and personal replys...Its st da's help which am now feel like a trader...Thanks ST da for everything.....:clapping: