An Intraday Trading System that actually works - Use it if you like

[Rustom Fracis]

I'd been hunting for an intraday system that is consistently profitable for so many years and have tried my luck with dozens of them. I've learnt a lot from them and finally have designed one of my own over the last one year. It's made me money in both bullish and bearish markets. Hell, It actually even survived the test of the random whipsawing markets in Feb 2018 when the budget was announced. I'm posting it here for your benefit should you choose to use it.

The system is as follows:

Step 1: Determine if today’s market trend is bearish or bullish using the daily chart of the Nifty.

Perfect Bullish Condition:
The 14 period RSI of the Daily chart of the Nifty is above 50
Overlay a 5 period EMA on this RSI. Make sure that this EMA too is above 50.
Make sure that the RSI is above the 5 period EMA of the RSI

Perfect Bearish Condition:
The RSI of the Daily chart of the Nifty is below 50
Overlay a 5 period EMA on this RSI. Make sure that this EMA too is below 50.
Make sure that the RSI is below the 5 period EMA of the RSI

Step 2: Pick the stocks you will be trading for the day before market opens

If the daily NIFTY chart is in “Perfect Bullish Condition”, run a market scan for individual stock charts that meet all parameters of the “Perfect Bullish Condition” in the Daily timeframe as well. DO NOT SEARCH FOR STOCKS THAT ARE IN “PERFECT BEARISH CONDITION”.

If the daily NIFTY chart is in “Perfect Bearish Condition”, scan for individual stock charts that meet all parameters of the “Perfect Bearish Condition” in the Daily timeframe as well. DO NOT SEARCH FOR STOCKS THAT ARE IN “PERFECT BULLISH CONDITION”.

Take all your scanner results and create a watchlist for the day. Do not trade any stocks outside this watchlist.

Step 3: Trade Timing and Entry

When you are trading a stock that is in “Perfect Bullish Condition”, switch from the daily chart to a 10 minute chart and overlay a 21 period EMA to it. Then add the RSI indicator under this chart and overlay a 5 period EMA on this RSI. Take a long position when the price crosses over the 21 period EMA and the 5 period EMA of the RSI is greater than 50. Unless both these things happen, do not take a long position.

When you are trading a stock that is in “Perfect Bearish Condition”, switch from the daily chart to a 10 minute chart and overlay a 21 period EMA to it. Then add the RSI indicator under this chart and overlay a 5 period EMA on this RSI. Take a short position when the price crosses below the 21 period EMA and the 5 period EMA of the RSI is greater than 50. Unless both these things happen, do not take a long position.

Step 4: Target and stop loss setting:
Stop loss for long positions should be placed under the low of the previous swing on the 10 minute chart. Target can simply be 1% (OR) target can be set using Fibonacci levels (OR) profits can simply be booked towards the end of the trading session at 3:15 PM. Personally, I prefer setting a 1% target and squaring off the trade once this is achieved.

Stop loss for short positions should be placed above the high of the previous swing on the 10 minute chart. Target can simply be 1% (OR) target can be set using Fibonacci levels (OR) profits can simply be booked towards the end of the trading session at 3:15 PM. Personally, I prefer setting a 1% target and squaring off the trade once this is achieved.

Things to keep in mind when using this system:

Though this system rarely ever fails me, there are no guarantees in the stock market and you may suffer losses when you trade. One must be mentally prepared for this.

Being a successful day trader takes a great deal of discipline. Follow the rules of the system very precisely without any deviations if you hope to make any profits.

Do not trade unless and until all conditions mentioned above are met. There may be days when things don’t align and you will have to sit on the side lines and wait for the perfect conditions but if you are serious about making a living from day trading, understand that capital preservation is as equally important as making profits.

I have been using this system only on the NIFTY 50 stocks, I have no idea how well this will work on stocks outside of this watchlist.

Wish all of you guys the best of luck and good fortune!

Comment if you like the system and share it with as many people as you can once you are convinced that it is working for you.

Guys, as simple as this system may seem, this has taken hard work to formulate and I've put this out for everyone's benefit. If it has helped you, I am really happy for you but if you happen to be experienced and know of ways to improve this system and reduce the number of exceptions, I urge you to share and help all the people in this community out here. There is a lack of quality Indian content on day trading today, and its only people like us who can fix this.

Look forward to contributions towards improvement of this system on this thread.

Cheers

 

[Rustom Fracis]

so what was the list of stocks that shown bearish outlook as on today morning??

Sir, with all due respect, I'm not sure why you can't simply run the scanner and just see for yourself even after I've given you the AFL for it. But here, this is the list:

ACC, ADANIPORTS, AMBUJACEM, ASIANPAINT, AUROPHARMA, AXISBANK, BAJAJAUTO, BANKBARODA, BHARTIARTL, BOSCHLTD, BPCL, CIPLA, COALINDIA, DRREDDY, GAIL, GRASIM, HCLTECH, HDFC, HDFCBANK, HEROMOTOCO, HINDALCO, IBULHSGFIN, ICICIBANK, IOC, ITC, KOTAKBANK, LT, LUPIN, ONGC, RELIANCE, SBIN, SUNPHARMA, TATAMOTORS, TATASTEEL, TCS, ULTRACEMCO, WIPRO, YESBANK

Now I already know what the next question on this thread is going to be. "Why did so many signals fail today?" The answer is that the NIFTY hit a key support area (look at the daily chart) and had a bounce back from there.

Also, just so that we can avoid any further confusion on anything, would like to stress again on the fact that this system works MOST OF THE TIME and NOT ALL THE TIME. As a day trader, I try to ensure that on an average I am more right in my trades than I am wrong. This will mean that the profits are more than the losses on a monthly basis.

Please backtest this system with some paper trading on the last 6 months historical charts so that you guys get the hang of it. Measure the results. See how much you earned and how much you lost. Try to find ways to improve the system and filter out more losing trades, share it with this community for everyone's benefit.

Thanks

 

[sgsaurabh516]

hello bro please ignore the negative comments i personally have been working on your system and find it to be very good and simple with good rr ratio and thanks for sharing it with the community

 

[EXPLORER]

hi
we need to narrow down the script list 5 bullish and 5 bearish. the system is very good. some afl experts and technical people can improve the system I feel. those who don't like it pl stay away and concentrate on other postings.
explorer

 

[aimer]

Good work Rustom ji...Will try to backtest and see the results...

 

[marimuthu13]

Sir, with all due respect, I'm not sure why you can't simply run the scanner and just see for yourself even after I've given you the AFL for it. But here, this is the list:

Thanks

Reason is simple..because i never used AMIBROKER or even tried to use it.. I am using only MT4 from beginning of my trading in 2011.

also not trading NSE ..

if someone who is trading at NSE actively and using AMI too, can post list of stocks based on scanner results if possible.

 

[ramshirsath]

Is the system useful for nifty bnifty trading. Anyone tried?

 

[Rustom Fracis]

Guys, just tried something different today...noticed that several false signals from yesterday get filtered out if we use MACD and RSI on the 10 min chart to plan entry...you may want to look into this and see if this method is better and share your findings with us...

 

[Rustom Fracis]

I think the toughest part of trading is not understanding technical analysis but cultivating the discipline to actually follow a system without deviations and without letting fear of losses and failure get the better of you.

That being said, I think it really helps to keep a journal of our system's performance so that we learn to trust the system and ourselves more and can cultivate the cut-throat mindset that a day trader needs in order to succeed. I will be posting the trade results of this system everyday over here for you guys so that we can track things closely.

Assume that each entry you took was around Rs. 16K-17K, and you took almost all the signals that the system gave, your trade book today should have looked something like this (view the attached PDF)

Hope you guys made some money today? Let me know!

 

[Rustom Fracis]

Reason is simple..because i never used AMIBROKER or even tried to use it.. I am using only MT4 from beginning of my trading in 2011.

also not trading NSE ..

if someone who is trading at NSE actively and using AMI too, can post list of stocks based on scanner results if possible.

I think you would benefit tremendously from switching to Amibroker and started trading on NSE. Not simply for the sake of using this system, but in general. I think most people on this forum too would advise you the same. It may not be reasonable to expect people to keep coming here and posting scanner results everyday right?

I strongly urge you to enable yourself in this regard, Sir.

All the best.