SH's trading the 'greater fool' zone

S

SACH2000

New Member
#53
#53
Dear SH

Nifty 1m ( 30 min) in intraday time frame appears to be outside sma envelope( 17 sma # 1.5%). can we short now on intraday basis , based on greater fool theory
 
VJAY

VJAY

Well-Known Member
#55
#55
adityasaraf007

adityasaraf007

Well-Known Member
#56
#56
lvgandhi said:
There is an inbuilt indicator called percent bands in Amibroker which is based on SMA. However if we can code an afl to see How much % candles are inside bands/envelope it will be nice.
Click to expand...
I have been playing with this idea of Envelope for the past few days..... and I completely relate to the problem that many might be having of choosing a filter %..... I don't know how to code the above mentioned request into an afl.... But even if I did know, it would have been a futile exercise...... Have a look at the following image:



It depicts the average daily range of Nifty for the last 21 days (a month) in percentage terms...... It shows the cyclical nature of the market which we tend to forget very often..... Even if we code an afl which would help us optimize the filter % such that 95% of the candles are within that envelope, it would be useless in most of the circumstances.......

However, what I have observed is that if we use EMA15 and a filter which is 3 times the Avg. Daily Range of the past month, it works well....... We may try to optimize this...... I have eye-balled it on a lot of charts (Stocks as well as Nifty) and this seems to look good.....

If someone wants an afl for ATR on % basis.....

Code: 
_SECTION_BEGIN("ATR - % Basis");
periods = Param( "Periods", 15, 1, 200, 1 );
Value = 100 * ATR(periods)/Close;
Plot( Value, _DEFAULT_NAME(), ParamColor( "Color", colorRed ), ParamStyle("Style", styleThick) );
_SECTION_END();
 
NTrader42

NTrader42

Well-Known Member
#58
#58
Hello Aditya

Even if we code for 5% candles to be outside band and get a % number, how does that ensure it the best value?

SH has arrived at this figure of 5% candles by approximation, once you start coding who know if 4.5% or 5.5.% may be better optimization for the actual trading results . . .

So if any coding efforts has to be made that should be focused towards testing the concept and maybe directly arriving at the MA value & % value for envelop rather than trying to keep x% of candle out of the band

btw, Nice efforts, trading is about catching these Out-liners :)

Thanks
 
adityasaraf007

adityasaraf007

Well-Known Member
#59
#59
NTrader42 said:
Hello Aditya

Even if we code for 5% candles to be outside band and get a % number, how does that ensure it the best value?

SH has arrived at this figure of 5% candles by approximation, once you start coding who know if 4.5% or 5.5.% may be better optimization for the actual trading results . . .

So if any coding efforts has to be made that should be focused towards testing the concept and maybe directly arriving at the MA value & % value for envelop rather than trying to keep x% of candle out of the band

btw, Nice efforts, trading is about catching these Out-liners :)

Thanks
Click to expand...
Exactly..... It won't be the best value (I'm 100% sure about it :))........ Because of the cyclical nature of the markets..... Have a look at that ATR image..... The code would easily predict that the 95% of candles would fall within envelope when the average daily range of Nifty is around 4-5% and there you go..... we won't get a trade at all unless the average range of Nifty starts trading between 4-5%......

And you are right that SH Sir has arrived at the figure of 5% by approximation.... We must know the basic premise of what he wants to convey..... :)
 
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