Edge in Banknifty with a simple strategy

suri112000

Well-Known Member
#1
I have been backtesting Banknifty with a simple strategy in order to find an edge in probabilities of trading. My sole aim is to find a positive expectancy even if it a small one. If the strategy proves to have a positive expectancy we can increase lot size and increase profitability.

A minimum of 200 points is scored in a month. I find as much profit as 1500 points in a cool month. The drawdown in negligible. This strategy is only for intraday trades.

I have data from 05/2013 to 09/2013. I have backtested for the month of Jan 2014 banknifty futures on Sharekhan TT.

The results are as follows :-

May 2013 : +439 points
Jun 2013 : +240 points
Jul 2013 : +230 points
Aug 2013 : +1515 points
Sep 2013 : +1433 points

Jan 2014 futures till date : +315 points

Maximum two trades per day. No third trade under any circumstances.

Zerodha intraday margin (MIS) is Rs.9000/- approximately. Even if we trade with 3 lots per day, monthly profit comes to around Rs.5000/- (collectively on 3 lots because the strategy envisages so). On Rs.50000/- capital, we are able to earn 10% profit monthly.

Is it ok to start real trades or should I be missing something in testing the strategy?

Suggestions/Comments are welcome.
 
#3
It is good that you have given importance to backtesting. Although you have backtested on a small data as per standards of trading but still there is some good positivity which you have experienced. Much depends on your strategy and its application by you as a trader.

If you are quite satisfied with your strategy then you should surely go ahead with it on Live trading.
 
#4
I have been backtesting Banknifty with a simple strategy in order to find an edge in probabilities of trading. My sole aim is to find a positive expectancy even if it a small one. If the strategy proves to have a positive expectancy we can increase lot size and increase profitability.

A minimum of 200 points is scored in a month. I find as much profit as 1500 points in a cool month. The drawdown in negligible. This strategy is only for intraday trades.

I have data from 05/2013 to 09/2013. I have backtested for the month of Jan 2014 banknifty futures on Sharekhan TT.

The results are as follows :-

May 2013 : +439 points
Jun 2013 : +240 points
Jul 2013 : +230 points
Aug 2013 : +1515 points
Sep 2013 : +1433 points

Jan 2014 futures till date : +315 points

Maximum two trades per day. No third trade under any circumstances.

Zerodha intraday margin (MIS) is Rs.9000/- approximately. Even if we trade with 3 lots per day, monthly profit comes to around Rs.5000/- (collectively on 3 lots because the strategy envisages so). On Rs.50000/- capital, we are able to earn 10% profit monthly.

Is it ok to start real trades or should I be missing something in testing the strategy?

Suggestions/Comments are welcome.
I started trading in Banknifty options for the last 2 weeks..and I got 250 points till now for one lot only...I go for positional rather than intraday...Bcoz in Bank nifty gap down and gap ups are common...And important thing is if I have an amount for 2 lots I go for 1 lot only..i use second lot if and only if my trade got reversed...So don't put ur eggs in one basket
 

suri112000

Well-Known Member
#5
I started trading in Banknifty options for the last 2 weeks..and I got 250 points till now for one lot only...I go for positional rather than intraday...Bcoz in Bank nifty gap down and gap ups are common...And important thing is if I have an amount for 2 lots I go for 1 lot only..i use second lot if and only if my trade got reversed...So don't put ur eggs in one basket
Dear appajib,

I am scared of Gap Up and Gap Downs in Banknifty. If trading positional, gaps against the position are a sure way for disaster. It happend in the past and we cannot rule out in future too. Gaps in favour of the positions are bonus but that we cannot predict/discount into strategy in advance.

I am trying out what I am comfortable with. Let us see the outcome when I go in for real trades.

Thanks for the suggestion.
 
#6
The strategy which you have backtested has to be backed by your trading psychology in real market conditions.

I wish you luck for starting on with trading your strategy in Bank Nifty Futures. If the targets you have kept for yourself to be achieved, you are able to meet then it will surely boost your confidence.

Happy Trading.
 

hauler

Active Member
#7
I have been backtesting Banknifty with a simple strategy in order to find an edge in probabilities of trading. My sole aim is to find a positive expectancy even if it a small one. If the strategy proves to have a positive expectancy we can increase lot size and increase profitability.

A minimum of 200 points is scored in a month. I find as much profit as 1500 points in a cool month. The drawdown in negligible. This strategy is only for intraday trades.

I have data from 05/2013 to 09/2013. I have backtested for the month of Jan 2014 banknifty futures on Sharekhan TT.

The results are as follows :-

May 2013 : +439 points
Jun 2013 : +240 points
Jul 2013 : +230 points
Aug 2013 : +1515 points
Sep 2013 : +1433 points

Jan 2014 futures till date : +315 points

Maximum two trades per day. No third trade under any circumstances.

Zerodha intraday margin (MIS) is Rs.9000/- approximately. Even if we trade with 3 lots per day, monthly profit comes to around Rs.5000/- (collectively on 3 lots because the strategy envisages so). On Rs.50000/- capital, we are able to earn 10% profit monthly.

Is it ok to start real trades or should I be missing something in testing the strategy?

Suggestions/Comments are welcome.
I think you should be jumping in to market with your strategy. Back testing a strategy is no replacement to the live trading.
 
#8
Hi,
Is there anyone, who follows the Thomas DeMark strategy..? Is it worth applicable..?
Based on it, for today (20th Mon), I get Biocon, DLF, Ranbaxy, TataGlobal, OBC, Syndi and SunTV. Can anyone confirm it..?
 

sparun

Active Member
#9
I have been backtesting Banknifty with a simple strategy in order to find an edge in probabilities of trading. My sole aim is to find a positive expectancy even if it a small one. If the strategy proves to have a positive expectancy we can increase lot size and increase profitability.

A minimum of 200 points is scored in a month. I find as much profit as 1500 points in a cool month. The drawdown in negligible. This strategy is only for intraday trades.

I have data from 05/2013 to 09/2013. I have backtested for the month of Jan 2014 banknifty futures on Sharekhan TT.

The results are as follows :-

May 2013 : +439 points
Jun 2013 : +240 points
Jul 2013 : +230 points
Aug 2013 : +1515 points
Sep 2013 : +1433 points

Jan 2014 futures till date : +315 points

Maximum two trades per day. No third trade under any circumstances.

Zerodha intraday margin (MIS) is Rs.9000/- approximately. Even if we trade with 3 lots per day, monthly profit comes to around Rs.5000/- (collectively on 3 lots because the strategy envisages so). On Rs.50000/- capital, we are able to earn 10% profit monthly.

Is it ok to start real trades or should I be missing something in testing the strategy?

Suggestions/Comments are welcome.

can u share ur strategy here in this post waiting eagerly:clapping::clapping::clapping::clapping:
 

hauler

Active Member
#10
Hi,
Is there anyone, who follows the Thomas DeMark strategy..? Is it worth applicable..?
Based on it, for today (20th Mon), I get Biocon, DLF, Ranbaxy, TataGlobal, OBC, Syndi and SunTV. Can anyone confirm it..?
TDM has many strategies, which one you are talking about ? the most famous is the sequential. Can you post those charts here with your counts for the above mentioned stocks in sequential ?
There are many members here following TDM and also some threads devoted to it. give a search you will find out.
 

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