1. THERE IS A VERY FAMOUS TECHNIQUE
CALLED 313 TECHNIQUE AND IS GENERALLY USED FOR SHORT OR VERY SHORT TERM TRADING UNDER THIS WE USE
1. 3 (EMA )(3 PERIOD EXPONENTIAL MOVING AVERAGE )
2.13(EMA )
3.34(EMA )
AND IT GENERATES SIGNALS UNDER FOLLOWING CONDITIONS :
1. BUY SIGNAL: 3(EMA) CUTS 13(EMA ) IN UPWARD DIRECTION , PROVIDED, 13(EMA ) IS ABOVE, 34(EMA )
2. SELL SIGNAL : 3(EMA) CUTS 13(EMA) IN DOWNWARD DIRECTION ,PROVIDED, 13(EMA ) IS BELOW , 34(EMA )
BENIFITS:
1. U WOULD BE IN EVERY BIG MOVE
AND WOULD GAIN HANDSOME PROFITS EVERY TIME
DRAWBACKS:
1. U WOULD NEVER GET PERFECT TOP OR BOTTOM
WHILE MAKING AN EXIT
2. IT MAY GENERATE LOTS OF SHORT TERM FALSE SIGNALS , WHICH WOULD ADD TO YOUR TRADING EXPENSES AND SMALL LOSSES .
3. DURING CHOPPY MARKET SESSIONS ITS PERFORMANCE WOULD BE WORST AND IT WOULD GENERATE SIGNALS EVERY NEXT DAY
MY TECHNIQUE
I FOCUSED ON THE DRAWBACKS AND TRIED TO REMOVE THEM AND FINALLY , I HAVE GOT A BETTER STRATEGY MIXED WITH THIS SYSTEM TO TRADE ,THIS SYSTEM STRANGLY REMOVES THE NOISE AND ALMOST ALL FALSE SIGNALS DUE TO CHOPPY PERIODS TRY THIS
REQUIREMENTS :
1.USE 315 TECHNIQUE
2. USE ADX(14) WITH NINE PERIOD SIMPLE MOVING AVERAGE
CONDITIONS:
SHORT WHEN:
1.3 PERIOD EMA CROSSES 15 PERIOD EMA IN DOWNWARD DIRECTION ,PROVIDED THAT ADX LINE CUTS 9 PERIOD MA IN UPPER DIRECTION I.E; (ADX CUTS 9MA FROM LOWER SIDE ,IN UPPER DIRECTION ) EVEN IF 315 TECHNIQUE HAS GIVEN SIGNAL SOME TIME AGO , DON;T WORRY JUST GET INTO POSITION (NOTE : NEVER IN CASE WHEN A ADX LINE CUTS 9 PERIOD MA FROM UPPER TO LOWER SIDE ) HOLD AND WATCH AND AS THE 9 MA CUTS ADX AGAIN i.e; FROM UPPER TO LOWER DIRECTION EXIT FROM THERE ,DONT WAIT FOR THE 315 TECHNIQUE TO GIVE SIGNAL JUST EXIT .
OPPOSITE IS ALSO TRUE
LONG WHEN :
1. ADX LINE IS CUTTING 9 MA IN UPWARD DIRECTION + 315 SYSTEM GENERATES A BUY SIGNAL OR IT HAS ALREADY GENERATES A BUY SIGNAL HOOOOOOOOOOOOOOOOOOOOOOOOOOOOLD AS LONG AS 9 PERIOD MA IS AGAIN CUTTED BY ADX LINE FROM UPPER TO LOWER SIDE
RULES:
1. MOST IMPORTANT ONLY TRADE (BOTH LONG AND SHORT ) IN UPTRANDING ADX : ADX LINE CUTS 9MA IN LOWER TO UPPER DIRECTION ,
2. NEVER TRADE IN CASE ADX CUTS 9MA FROM UPPER TO LOWER DIRECTION )
3. ALWAYS MAKE AN EXIT(IN BOTH LONG AND SHORT ) WHEN ADX LINE CUTS 9 PERIOD MA FROM HIGHER TO LOWER DIRECTION .
IT REMOVES EVERY FALSE SIGNAL AND THE BASIC IDEA OR PRINCIPLE I FOLLOWED TO DOVELOP THIS TECHNIQUE IS TO TRADE ALWAYS IN TRANDING MARKET ,AS WE ENTER IN LONG OR SHORT POSITION IN STARTING OF TREND AND EXIT BEFORE TREND ENDING SO WHAREVER IS OUR POSITION EITHER LONG OR SHORT WE WOULD BE IN COMPLETE BULL OR BEAR AND WOULD EXIT BEFORE THE TRANDING END SO WE WOULD ALWAYS MAKE A PROFIT AND PERHAVES NEVER A LOSS
IT CAN BE USED ON ANY SCRIPT OF YOUR CHOICE
BUT BEST IF TRADED IN INDEX LIKE NIFTY , NIFTY JUNIOR , DEFY ETC.
BELOW IS THE EXAMPLE OF NIFTY IN CHART USING THIS TECHNIQUE.
