Stress Less and Dynamic Intraday Strategy

[suri112000]

It is designed for trading in SBI and Yes Bank. I donot know about other pairs. If anybody interested can test on other pairs as well.

You should be long in one and short in another.

The strategy throws atleast one chance in a day to close the position in profit.

It is very simple to understand and easy to implement.

Diversifying into two scrips and hedging them with each other to reduce risk.

Minimum suggested capital is Rs.50,000. It can be traded with even with less capital but recovering cost of trade becomes difficult if capital is less than suggested.

 

[suri112000]

SBI and Yes bank to be traded in 100 : 40 ratio for a capital of Rs.50000 and it is purely intraday. That is to say.... SBI to be traded with 100 qty and yes bank to be traded with 40 qty.

You should go long on higher priced share ie on Yes Bank initially.
You should go short on lower priced share ie on SBI initially.

Both trades are to be initiated at 0930 hrs.

You stop loss for the trade is Rs.500 on MTM basis. If stop loss is hit, just reverse the trades and wait for the trade to come into profit. If it hits stop loss, just reverse the trades and wait for the trade to come into profit. Even if 3rd trade hits stop loss, pack up for the day.

I am running 2 days model trades to understand the strategy well.

 

[suri112000]

06.9.2016 time 0930

Buy Yes Bank @ 1405.35 Qty 40
sell SBI @ 258.40 Qty 100

Exactly at 1045

Yes bank quoting at 1422
sbi quoting at 258.55

Profit on yes bank is 16.65 points x 40 qty = Rs.666
Loss on sbi is 0.15 x 100 qty = Rs.15

Profit is = Rs.651. (Please adjust for brokerage and taxes)

 

[suri112000]

07/8/16 time 0930 hrs

Buy Yes Bank @ 1428.95 Qty 40
sell SBI @ 261.90 Qty 100

Exactly at 1115

Yes bank quoting at 1418.70
sbi quoting at 263.50

Loss on yes bank is 10.25 points x 40 qty = Rs.410
Loss on sbi is 1.60 x 100 qty = Rs.160

Loss is = Rs.570 on MTM basis.

So, we have to reverse the trades.

Sell Yes Bank @ 1418.70 (80 Qty) Net holding 40 qty
Buy SBI @ 263.50 (200 Qty) Net holding 100 qty.

At 1330 hrs

Yes bank quoting at 1413
sbi quoting at 270.10

Profit on yes bank is = Rs.228
Profit on sbi is = Rs.660

Profit is = Rs.888 on MTM basis.

Setting off earlier loss, the profit is Rs.318

 

[dipendu]

Missed your thread earlier.

Will watch from tomorrow.

Thanks for sharing this good technique.

 

[nazimrushda]

It is designed for trading in SBI and Yes Bank. I donot know about other pairs. If anybody interested can test on other pairs as well.

You should be long in one and short in another.

The strategy throws atleast one chance in a day to close the position in profit.

It is very simple to understand and easy to implement.

Diversifying into two scrips and hedging them with each other to reduce risk.

Minimum suggested capital is Rs.50,000. It can be traded with even with less capital but recovering cost of trade becomes difficult if capital is less than suggested.

R u still using this setup , any initial stop loss ??

 

[tradingstudent]

It is designed for trading in SBI and Yes Bank. I donot know about other pairs. If anybody interested can test on other pairs as well.

You should be long in one and short in another.

The strategy throws atleast one chance in a day to close the position in profit.

It is very simple to understand and easy to implement.

Diversifying into two scrips and hedging them with each other to reduce risk.

Minimum suggested capital is Rs.50,000. It can be traded with even with less capital but recovering cost of trade becomes difficult if capital is less than suggested.

Hi Suri,

Could you shed some light on why you chose Yes bank and SBI. If diversification was the criteria, it could have been say HDFC and SBI?

Thanks

 

[suri112000]

R u still using this setup , any initial stop loss ??

Read post no.2 for asked details.

 

[suri112000]

Hi Suri,

Could you shed some light on why you chose Yes bank and SBI. If diversification was the criteria, it could have been say HDFC and SBI?

Thanks

Did you see that SBI and Yes Bank is not of equal quantity? The trick is striking the ideal ratio.

If you like HDFC and SBI combo, do some research and find out ideal ratio to trade. Also let us know the ratio.

Further, when we initiate the trade in SBI and Yes Bank, the difference between the two scrips should widen to profit. The difference increases when both scrips move in the direction of each trade. Or one scrip stagnates and other scrip moves in its direction. But if both scrips reverses direction, or one scrip stagnates and other scrip moves in opposite direction of the trade, we close the trade on SL and reverse it. Here again the idea is - we are just following the rule of widening the gap.

Sometimes it so happens that both converge relentlessly and does not give us room to widen the gap. The SL protects us in such situations.

 

[nazimrushda]

Read post no.2 for asked details.

Hi suri ,

U know sudden spike on some days likes results , repo rate change , any global negative news land us in huge losses if stoploss is not placed .