Trading Strategies Using Technical Analysis
- Thread starter SwingKing
- Start date
- Tags trading strategies
Hi Raunak,
I have worked on my positions as below.
Market was finding resistance in the range of 5470-80. Hence I sold my 5400call @117. This has given me 7points gain as my earlier buy was @110.
Again at the end of the day I baught it at 100.
So now my position at weekend is NF short @5445 & 5400CE buy @100.
I am sure there may be better ways to deal with positions. Appreciate your comments.
I have worked on my positions as below.
Market was finding resistance in the range of 5470-80. Hence I sold my 5400call @117. This has given me 7points gain as my earlier buy was @110.
Again at the end of the day I baught it at 100.
So now my position at weekend is NF short @5445 & 5400CE buy @100.
I am sure there may be better ways to deal with positions. Appreciate your comments.
You could've shorted one more lot i.e. if you were feeling confident and then squared it off at a lower rate .. that would have given you some leverage points against your existing short.
Alternately, if you feel that we may not move down at all and simply range .. then you can sell PE and eat premium BUT that is still some time away, time decay period is still 15 days away
Albeit, if you feel mkt may move against your position now .. then you can buy next month Futures and keep holding till you feel that it no longer will move up. Then exit that.
Alternately, if you feel that we may not move down at all and simply range .. then you can sell PE and eat premium BUT that is still some time away, time decay period is still 15 days away
Albeit, if you feel mkt may move against your position now .. then you can buy next month Futures and keep holding till you feel that it no longer will move up. Then exit that.
Fellas,
Since this thread is related to trading strategies, I would like to share my collection which I consolidated from different books... Kindly experiment at your own risk...
Currently I am researching on use of ADX/DMI. I have selected ADX/DMI because it is not so widely used and popular and hence cud give very effective signals. I wud surely share my study after sometime.
Buy Set ups
1 2 3 4 Method
1. ADX must be greater than 30
2. 14 days +DI reading must be higher than 14 days DI reading
3. Wait for the market to have 1 2 3 correction i.e. 3 consecutive intraday lower lows or 2 lower lows and one inside day
4. On day 4 only, buy 1 tick above day 3 high
5. Initial stop loss should be placed day 3 low.
Volatility Observations
1. Whenever 10 days volatility is 50% or less than 100 days volatility, large move is likely to occur
2. The longer the time frame a historical volatility remains under 50%, the larger the move will be
3. When these occurs look for the larger bar within last 9 days and trade in the direction of larger bar
The 8 day low reversal method
1. Day one must be 8 day low
2. Day two must trade above day one high
3. Day three or four or five or six must trade under the low of day two (this can be new low)
4. When condition 3 is satisfied, we buy one tick above day two high within next four trading sessions
5. Stop loss goes one tick below day two low
Spent Market Trading Pattern
1. Today it must make 10 period low
2. Todays trading range must be the largest range in last 10 trading sessions
3. Todays close must be in top 25% of the days range
4. Tomorrow or day after, buy one tick above todays high
5. Stop loss goes one tick below todays low
Sell Set ups
1 2 3 4 Method
1. ADX must be greater than 30. Higher the ADX is better
2. The DI must be greater than +DI
3. Wait for 1 2 3 rally i.e. three higher highs
4. On day 4, sell 1 tick below day three low
5. Keep stop loss near day three high
Double Volume Topping Method
1. Stock must be trading near or at three months high
2. Todays volume must be double the 15 days average volume
3. Either today, tomorrow or next day, stock must close below its open
4. When rule 3 is met within next 2 days, sell under the rule 3 day low
5. Initial Stop Loss should be placed at top of rule 3 bar
The 8 day low reversal method
1. Day one must be 8 day high
2. Day two must trade below day one low
3. Day three, four, five or six must trade above day two high (this could be new high)
4. When condition 3 is satisfied, we sell short one tick below day two low within four trading session
5. Stop loss is high of day two
Spent Market Trading Pattern
1. Today it must make 10 period high
2. Todays trading range must be the largest range in last 10 trading sessions
3. Todays close must be in bottom 25% of the days range
4. Tomorrow or day after, buy one tick below todays low
5. Stop loss goes one tick below todays high
Still student,
Apurv
Since this thread is related to trading strategies, I would like to share my collection which I consolidated from different books... Kindly experiment at your own risk...
Currently I am researching on use of ADX/DMI. I have selected ADX/DMI because it is not so widely used and popular and hence cud give very effective signals. I wud surely share my study after sometime.
Buy Set ups
1 2 3 4 Method
1. ADX must be greater than 30
2. 14 days +DI reading must be higher than 14 days DI reading
3. Wait for the market to have 1 2 3 correction i.e. 3 consecutive intraday lower lows or 2 lower lows and one inside day
4. On day 4 only, buy 1 tick above day 3 high
5. Initial stop loss should be placed day 3 low.
Volatility Observations
1. Whenever 10 days volatility is 50% or less than 100 days volatility, large move is likely to occur
2. The longer the time frame a historical volatility remains under 50%, the larger the move will be
3. When these occurs look for the larger bar within last 9 days and trade in the direction of larger bar
The 8 day low reversal method
1. Day one must be 8 day low
2. Day two must trade above day one high
3. Day three or four or five or six must trade under the low of day two (this can be new low)
4. When condition 3 is satisfied, we buy one tick above day two high within next four trading sessions
5. Stop loss goes one tick below day two low
Spent Market Trading Pattern
1. Today it must make 10 period low
2. Todays trading range must be the largest range in last 10 trading sessions
3. Todays close must be in top 25% of the days range
4. Tomorrow or day after, buy one tick above todays high
5. Stop loss goes one tick below todays low
Sell Set ups
1 2 3 4 Method
1. ADX must be greater than 30. Higher the ADX is better
2. The DI must be greater than +DI
3. Wait for 1 2 3 rally i.e. three higher highs
4. On day 4, sell 1 tick below day three low
5. Keep stop loss near day three high
Double Volume Topping Method
1. Stock must be trading near or at three months high
2. Todays volume must be double the 15 days average volume
3. Either today, tomorrow or next day, stock must close below its open
4. When rule 3 is met within next 2 days, sell under the rule 3 day low
5. Initial Stop Loss should be placed at top of rule 3 bar
The 8 day low reversal method
1. Day one must be 8 day high
2. Day two must trade below day one low
3. Day three, four, five or six must trade above day two high (this could be new high)
4. When condition 3 is satisfied, we sell short one tick below day two low within four trading session
5. Stop loss is high of day two
Spent Market Trading Pattern
1. Today it must make 10 period high
2. Todays trading range must be the largest range in last 10 trading sessions
3. Todays close must be in bottom 25% of the days range
4. Tomorrow or day after, buy one tick below todays low
5. Stop loss goes one tick below todays high
Still student,
Apurv
Last edited:
Rrmhatre,
It is good to manage risk in markets. One way to do is with options (like you are doing) and the other way is to do it through low risk - high reward entry. This does apply to forex more where we don't have issues of gap up/gap down, But it works just fine in case of Stock Indexes.
One of the negative aspects of dealing in options to protect risk is that your profit potential gets limited. One really needs great deal of experience to know when to close an option leg so as to increase the profit points. But the point is, how many people know when to do that?
What I usually do is I prefer to enter in situations where i see a low - risk high reward trade. Say for example the current situation, I know the market is lacking momentum and hence any upmove is going to be slow. However, on the downside as the volatility picture is suggesting, Index could move down at a much faster pace. Hence, for me this is one of the parameters which makes it qualify as a low risk trade. Hence, I take positions according to my risk profile and forget about being right/wrong.
Hope this is of help to you.
Tc
It is good to manage risk in markets. One way to do is with options (like you are doing) and the other way is to do it through low risk - high reward entry. This does apply to forex more where we don't have issues of gap up/gap down, But it works just fine in case of Stock Indexes.
One of the negative aspects of dealing in options to protect risk is that your profit potential gets limited. One really needs great deal of experience to know when to close an option leg so as to increase the profit points. But the point is, how many people know when to do that?
What I usually do is I prefer to enter in situations where i see a low - risk high reward trade. Say for example the current situation, I know the market is lacking momentum and hence any upmove is going to be slow. However, on the downside as the volatility picture is suggesting, Index could move down at a much faster pace. Hence, for me this is one of the parameters which makes it qualify as a low risk trade. Hence, I take positions according to my risk profile and forget about being right/wrong.
Hope this is of help to you.
Tc
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