Trade after 1hr strategy - Comments welcome

#11
It could be, depends on your trading style. Mostly its a intraday strategy. Most breakouts could be profitable if you book profit early enough. Please refer the Breakout methods in this forum itself for various timeframes and its method.

Which stock did you use for backtesting?
 
#13
Hi,

I also backtested the system using a 15min breakout time. The results are +ve only. The backtest period is between 1/6/09 to 24/8/09. I didnt want to include May due to the election result shoot up. Seems a decent one. See the attached file for more details on backtest using Amibroker.

Initial capital of 1lac, 1 Lot, commission 0.02, 5min candle, both long and short, etc are the settings.

I was not in the scence for quite some time and hence the late reply. The data used was on Nifty future, data downloaded from Investbulls.

kesk
 
#14
I think the idea of fixing a 15 point SL and 20 point profit is an erroneous strategy. The fix has to be made as a percentage of the NIFTY value. This way the SL and Profits will be triggered at the same levels (assuming same VIX) irrespective of whether Nifty is at 2500 or 5000.

If I were you, I would have chosen a 0.3% SL and a 0.5% profit. Therefore, for Nifty currently at 5000, the SL would be 5000 * 0.3% = 15 points and Profit will be booked at 5000 * 0.5% = 22.50 points. If the Nifty was trading at 3600, then SL would be 10.8 points and profit will be booked at 18 points.

I really wonder how the back test with this kind of a ORB strategy yield for Nifty Futures from 2005 onwards.

One thing to note is that based on one's capital, the number of LOTs traded in Nifty will differ. i.e., at Nifty 5000, one might simply trade 2 LOT on a capital of say 50K, but at Nifty 2500, you will have to trade 4 LOT on the same capital of 50K. Therefore this also needs to be taken into account while backtesting the result.

Hello fellow traders who made it big,

I started trading a year back without much knowledge on daily trading. During the initial period, without any tech analysis, charts, i was able to scalp a 50ps-2rs profit on some stocks. Was profitable too for some time. To earn more, started reading lot of books/videos and now have a grasp of TA, but started loosing money big time. My trading capital just down from 1.5lakh to 50K now. How i lost money: choosing to trade on the tips providers/broker calls. etc.

Now i want to start afresh and NOT to loose so much money. After analysing the chart for the past 3 months, have come to some trading setup which i give below:

1. No trades for the first 1 hr.
2. Note the High and Low within this period.
3. If market moves higher than High, then go Long with a 15pt SL and initially 20pt profit. and trail the SL.
4. If the low is breached, then short with the same MM.
5. If the market hovers within the High and Low even after 1.30hrs, then go long/short only when the High/Low is breached. If not no trades.

Does this sound practical. I couldnt write a suitable AFL in Amibroker and couldnt backtest. But on seeing the chart for 2 months, looks valid.

I would request experienced traders/strategist to comment on this.
 

trader.trends

Well-Known Member
#15
Kesk

Having the first target of 20 points and also a trailing SL is good in theory. What will you actually do when you hit 20 point? Wait or book profit? What happens if it hits 20 points and comes down to entry level and then goes down? Or becomes volatile at the 20 point profit level?
My suggestion would be, take three lots of MNF instead of one lot of NF. When you hit the 20 point exit one lot and trail the balance two lot at entry price. Even if the market reverses you would still be in profit. If it goes up 40 points then exit one more lot with 40 point profit and hold the balance one lot at SL 20 point profit area.

In any day trading strategy it would be important to book profits quickly and not allow a winning trade to turn a loser. Volatility is higher in shorter time frame. Shifting Sl to entry price once the trade goes in your favour will save a lot of money and heartburn.
 
#18
Good that this thread picked up some valuable comments. What I have observed with this method is, it works best in a trending market. In a choppy market, it will eat out the profits if we dont book it early enough. This is like the Moving Average behaviour. Lets see how far we go in this.
 
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