Nifty Trading on price action

#1
I have been trading Nifty on the basis of pure price play i.e only high and low are basic parameters. No complex formulas and indicators which I am not comfortable and show lag

Logic - When Nifty is trending, it follows a pattern which is evident from the highs and lows. A downtrend has lower highs and an uptrend has higher lows.

Rules - Checks highs/lows for 1 day, 2 day and 3 day for confirmation of higher low or lower highs. When all three conditions satisfy then only we enter a trade

Stop Loss - SL for a trade is last high for a short trade and last low for a long trade

Target - Untill the lower high or higher low condition is broken.

Please share your thoughts and suggestions

 
#4
Examples

Long Trade
26th feb - Check 26th feb low with last 3 days low i.e 23,24 and 25 feb. all these days the current days low is higher than last days low. with three days higher low trend in place. we enter long trade. We keep the position open keeping stop loss as last day's low till 10 mar when the higher low condition is broken

Short trade

23rd feb - Check 23rd feb high with last 3 days high i.e 18,19 and 22 feb. all these days the current days high is lower than last days high. with three days lower high trend in place. we enter short trade. We keep the position open keeping stop loss as last day's high till 26 feb when the lower high condition is broken

File saved at 4shared.com/document/tJFL0PFz/Hilo_07042010.html

Hope this helps
 

trader.trends

Well-Known Member
#5
Examples

Long Trade
26th feb - Check 26th feb low with last 3 days low i.e 23,24 and 25 feb. all these days the current days low is higher than last days low. with three days higher low trend in place. we enter long trade. We keep the position open keeping stop loss as last day's low till 10 mar when the higher low condition is broken

Short trade

23rd feb - Check 23rd feb high with last 3 days high i.e 18,19 and 22 feb. all these days the current days high is lower than last days high. with three days lower high trend in place. we enter short trade. We keep the position open keeping stop loss as last day's high till 26 feb when the lower high condition is broken

File saved at 4shared.com/document/tJFL0PFz/Hilo_07042010.html

Hope this helps
Kumar

I find the strategy interesting. I have been looking at going long when a new high is formed at X days or shorting when a new low is formed at X days. Here you are looking at going long when today's low is the higher than the highest of last three days low and going short when today's high is lower than the last three day's high.

Couple of clarifications

Do you take the trade at EOD?
What is the policy for gaps opening against your positions?
The exit policy is a little hazy. Can you tabulate a few trades from the beginning of this year to clarify the exit strategy?
 
#6
I have been trading Nifty on the basis of pure price play i.e only high and low are basic parameters. No complex formulas and indicators which I am not comfortable and show lag

Logic - When Nifty is trending, it follows a pattern which is evident from the highs and lows. A downtrend has lower highs and an uptrend has higher lows.

Rules - Checks highs/lows for 1 day, 2 day and 3 day for confirmation of higher low or lower highs. When all three conditions satisfy then only we enter a trade

Stop Loss - SL for a trade is last high for a short trade and last low for a long trade

Target - Untill the lower high or higher low condition is broken.

Please share your thoughts and suggestions

How long have you been trading this and have you backtested this? If you have backtested it can you share some results please.
 
#7
Nifty breaks lower high trend today. last two days higher low has formed. Tomorrow one can go long keeping stoploss of 5324 which is today's low.



Thanks for the questions as it will help me fine tune the system for better

@deedeed
I have been trading this since last 6 months or so and have got good returns. I will surely publish key results in a day or two.. have been busy with office. File saved at 4shared.com/document/tJFL0PFz/Hilo_07042010.html if you want to check details

@trader.trends

I generally am alert when 1D and 2D show up some trend. 3rd day I take a position during day time depending on the markets or wait till EOD for full confidence. It takes 3 days to enter into a trade because of conditions and as such gaps against the trade are rare unless something panicky happens. As a rule the trade will end if it hits my stoploss. I will surely pick out trades and share. till that time if you want to go through the file then check yourselfs at 4shared.com/document/tJFL0PFz/Hilo_07042010.html
 

vinst

Well-Known Member
#8
Hello Kumaram,
thanks for interesting method. Your test file contains nifty spot data. Since the trade would be on futures, better to take NF data. conclusions can be different in several cases.

regards
vin
 

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