Hello frnds,
One of my trader frnd is using this stratergy (stated below). Wanted to know how this works out?
The stratergy is
He buys one lot of silver ( he is a commodity trader), if it goes down by certain range (he has this pre-calculated range) he buys two lots, again if prices goes down by that pre calculated range, he buys 4 lots. If the prices moves back up (with that range), he will square off the last lot which are bought(i.e 4 lots in this case). I'll illustrate this
Suppose the silver range he has calculatd is 400Rs
He willsee the pivot point, and if the prices are abv/below 400rs of the pivot, he will enter the trade.
let say prices are below pivot point ( 60000) down 400 rs.
Lot Buy Sell
1 59600
2 59200
4 58800
8 58400
8 58800 (prices moves back up)
4 59200
2 59600
1 60000
Now this is not the finish, here if the position are open in the EOD, he will carry on the next day with may be aslight difference in range, but will trade according to his buy/sell position ( and not the next day pivot level).
his stop loss is, if the prices goes below his 6th trade, i.e if it comesto 7th trade,he will square off all his position. This means that s/l will only hit if the mkts are up/down one sided, like the one happen in slver last week.
here i want to know is how dose he calculates the range?
many must be asking that you really want to trade on this stratergy, and i'll say yes, because range which he gets its almost perfect. and the mkts dosent always moves one sided, it will be ina zig-zag form.
One of my trader frnd is using this stratergy (stated below). Wanted to know how this works out?
The stratergy is
He buys one lot of silver ( he is a commodity trader), if it goes down by certain range (he has this pre-calculated range) he buys two lots, again if prices goes down by that pre calculated range, he buys 4 lots. If the prices moves back up (with that range), he will square off the last lot which are bought(i.e 4 lots in this case). I'll illustrate this
Suppose the silver range he has calculatd is 400Rs
He willsee the pivot point, and if the prices are abv/below 400rs of the pivot, he will enter the trade.
let say prices are below pivot point ( 60000) down 400 rs.
Lot Buy Sell
1 59600
2 59200
4 58800
8 58400
8 58800 (prices moves back up)
4 59200
2 59600
1 60000
Now this is not the finish, here if the position are open in the EOD, he will carry on the next day with may be aslight difference in range, but will trade according to his buy/sell position ( and not the next day pivot level).
his stop loss is, if the prices goes below his 6th trade, i.e if it comesto 7th trade,he will square off all his position. This means that s/l will only hit if the mkts are up/down one sided, like the one happen in slver last week.
here i want to know is how dose he calculates the range?
many must be asking that you really want to trade on this stratergy, and i'll say yes, because range which he gets its almost perfect. and the mkts dosent always moves one sided, it will be ina zig-zag form.
