Conservative strategy

Discussion in 'Futures' started by suri112000, Jul 26, 2016.

  1. suri112000

    suri112000 Well-Known Member

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    Sold 1 lot of 8600 CE Aug series @ 190.

    Margin blocked Rs.52K (appr). Capital set aside for this strategy Rs.1.56 lakhs.
     
    Last edited: Jul 28, 2016
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  2. Rish

    Rish Well-Known Member

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    8600 or 7600 ?
     
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  3. rip07

    rip07 Well-Known Member

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    It takes time to rewire, but as method explained by Suri you can try it for next 30 trading days and it will ingrained in your mind as new habit takes time.

    It has been explained in Elder's books as well by referring AA (alcoholic anonymous), "I am an alcoholic, I am powerless over alcohol." --for trader "I am a loser, I am powerless over losses." The moment you will recognize that you are powerless over losses, you start taking steps towards it. "Today I will not loose more than 1-2% of my trading capital. Only for today." If you say this phrase for next 30 days, and follow it, you will survive.

    Thanks
    rip07
     
    Last edited: Jul 29, 2016
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  4. Happy_Singh

    Happy_Singh Well-Known Member

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    Nice thought experiment :thumb:

    Hope to see this thread alive and ticking at least for next 30 days :)

    Happy :)
     
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  5. suri112000

    suri112000 Well-Known Member

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    This is the second AFL. Save it as "short swing" and overlay on the chart of Supertrend.

    What is the maximum stop loss in each trade we can have in Nifty futures trade in 5 min TF? 10 points or 20 points.
    How many trades we can have in Nifty per day? 2 or 3 maximum.
    What is the profit target for each trade? 30 or 60 points.
    How many trades we can withstand which go into loss consecutively? 20 or 30 trades.
    How many months loosing months we can withstand in a row? 2 or 3 months.

    Once we find answers to these questions,

    we can calculate the base capital for the strategy.
    we can calculate the profit target for a week, for a month.
     
    Last edited: Jul 29, 2016
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  6. suri112000

    suri112000 Well-Known Member

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    Rules.

    1. when trend is up
    2. Go long above latest Red candle high. (When trend is down go short below latest green candle)
    3. stop loss 10 points
    4. profit target 30 points.
    5. no trailing stop. Slide the stop to breakeven when trade moves 20 points in favour. Donot close the trade even if the signal flips until either SL or profit target or breakeven hits. Enter next trade only when either SL or profit target is hit. In case of BE trade, the next trade is to be initiated only when the price hits SL or profit target. If the signal flips after hitting SL or profit target, next trade should be as per new trend.
    6. maximum 3 trades per day ie 30 points maximum loss per day. We keep trading until following profit target is met.
    7. if 150 points profit is made within 2 days we donot trade for next 3 days. Similarly, if profit target is met in 3 days we donot trade for next 2 days. if profit target is met in 4 days, we take a break for 1 day.

    A specimen trade with trade marked on 29/07/2016 nifty futures chart is pasted below.

    We start our journey of 30 trading days from Monday ie 01/08/2016.

    [​IMG]

    Broader Plan

    We will have a maximum of 90 trades in next 30 trading days.
    Even if we consider 30% strike rate, we will have 27 winning trades fetching us 810 points, and loosing 63 trades results in 630 points loss, thus giving us 180 points profit.
    There will be trades which do not fetch us full profits. Likewise there will be some trades which does not hit stop losses. This is the result of intraday restricted timings.
    There will be trades which trigger but immediately reverses and hit stop loss. We have to live with such trades.
    Let us suppose all the 90 trades hit stop loss, so the maximum we loose is 900 points ie Rs.67500. suppose if we include brokerage it comes to around 1080 points ie Rs.81000.
    So, our capital outlay should be a minimum of Rs.1,21,000.
    Profit target is anywhere between 150 to 900 points. ie from Rs.11250 to Rs.67500. So, our effort should result in between these extremes.
    We will evaluate the system after 30 trading trades and if any changes required we will impose them as the need dictates.

    So, let us be ready to loose Rs.81000 in the next 30 trading days.:D
     
    Last edited: Jul 30, 2016
  7. Purushotham

    Purushotham Well-Known Member

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    Hi Suri garu,

    Shall I manually back test with Jul Fut and post the charts.
     
  8. suri112000

    suri112000 Well-Known Member

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    Sure. It helps to understand the strategy well.
     
  9. Purushotham

    Purushotham Well-Known Member

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    Last edited: Jul 30, 2016
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  10. Purushotham

    Purushotham Well-Known Member

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    Chart of July 04

    [​IMG]screengrab

    1st July Loss -10
    4th July 2 trades +5
     
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