Trading with AMA and price action- forward testing

[vijkris]

Final post for today:

Today i will try to teach you when to get into a trade when you spot a trend for minimum risk. (it can never be risk free as i do not have a crystal ball)

So the thumb rule i follow is when i see OBV breakout in any TF. I look for the best price to enter (in terms of minimum risk). OBV is always my navigator.

View attachment 22086

View attachment 22087

I hope you guys know now what to do after seeing this current divergence in BN.

View attachment 22088
These were all profitable trades using divergence.

The places to look for divergence is the tops and bottoms. Very easy to say right. Now which tops and bottoms. Look for opportunities in divergence trade in case of Gap ups and Gap Downs and also near 200EMA (of both Price and OBV). These are the vulnerable places for whips. (Whips very often give good trades on divergence)

You may understand the gap up or gap down but why 200EMA. Simple logic is everybody uses 200EMA which is meant to offer support to price or OBV. This is the best place for the operators to wrong foot you.

CRB - Closing Range BreakOut

x=Param("Min of CR:",30,0,375,1);
nd=Day() != Ref(Day(), -1);

crbh = ValueWhen(nd,Ref(HHV(H,x),-1));
crbl = ValueWhen(nd,Ref(LLV(L,x),-1));

Plot(crbh,"\nCRB H",colorBlack);
Plot(crbL,"\nCRB L",colorBlack);

if( ParamToggle("CRB cloud", "No|Yes", 1))  
PlotOHLC(crbl,crbh,crbl,crbl,"",ParamColor("R col",colorBlack),stylenoreScale|styleNoLabel|styleCloud,0,0,0,-7);
_SECTION_END();

Enjoy.....

CRB for Obv

_SECTION_BEGIN("CRB obv");[/B]
[B]x=Param("Min of CR:",30,0,375,1);
nd=Day() != Ref(Day(), -1);

crbh = ValueWhen(nd,Ref(HHV(OBV(),x),-1));
crbl = ValueWhen(nd,Ref(LLV(OBV(),x),-1));

Plot(crbh,"\nCRB H",colorBlack);
Plot(crbL,"\nCRB L",colorBlack);

if( ParamToggle("CRB cloud", "No|Yes", 1))  
PlotOHLC(crbl,crbh,crbl,crbl,"",ParamColor("R col",colordarkgrey),stylenoreScale|styleNoLabel|styleCloud,0,0,0,-7);


_SECTION_END();

Enjoy.....

View attachment 22090

Catching the bottom in Dr.Reddy.

View attachment 22091

And the top,

Vk Ji is this what you are referring View attachment 22093

Back to the drawing board. Remember the ribbons created by Happy ji in this thread. One simple way to find divergence would be to comapare the lows / highs of prices between two ribbons of same colour for both OBV and Price. For both of them to be in sync, we need both of them to make a higher low or a higher high in these 2 ribbon periods. If one does and the other does not, we may be in a position of a divergence or a developing divergence.

View attachment 22095

@doss186
thank u for sharing.
just one little suggestion.
to share or not to share is coders own right.

But the way i see it is
either you share or not share. nothing in between.

How do feel now to see this in thread tht out of ten 4 will talk on your system and rest will feel left alone.

I also do this private sharing. but do tht in PM(private message). and ask the person to not share even a picture of it.
tht way nobody feels left alone.

i respect your choice just giving suggestion.
have no other intentions.

I second Apache...One day I had asked one afl with some logic in the night mind it around 11pm I think...And when I was going to sleep I just checked at 1:30am and there was a like from MBji and later on in the morning there was the code ....I get amazed how much helpful and dedicated all of the guys here are ...Even extremistji was one night burning mid noight oil developing a code and testing and his calculation woke me up also from going to sleep ..

Just sometimes I think If i would have got this Traderji 10years back could have learned so much from our all wonderful friends

Thanks Everyone and Traderji its a nice family

Now they may claim that the inspiration came to them directly but we all know the truth. There are many red herrings amongst us.

View attachment 22107
See the simplicity and beauty of just trading the BO of CRB of OBV. You know exactly where to get in, where to add and where to trail your sl. Thank you Extremist ji and Money B ji.

Really bro...
i seen lot of people create threads or post images of AFL or systems here and there for lot of days; in the name of testing. once people develops interest in it they just become too concern about all of them "the system is under testing " and promise to share it when it is finished product.
ultimately nothing such happens and lot of people left disheartened. lot time wasted.
continuously begging for the system. and the so called proprietor boast on this fact that he is in too much demand.

View attachment 22108
This would make it clearer.

Auro Pharma.
CRB on price and OBV simultaneously.

Looking at this chart would make it so much clearer that what leads what. I always beleive that OBV is a leading indicator over price. I rest my long pending case.

Manish ji donot take it personally. I wrote that because i was hurt with that. Trading is not like any other run of the mill businesses where you do not share your trade secrets. What works for you can and will equally work for others without impacting your returns (profits). The AFL does not give you profits. It just catches the parameters set in it. Now just because X number of people know those parameters would not make the market change its course. It is like beleiving that your AFL is moving the markets. This arguement does not hold any water.

99.99% of the times it turned out in the end that starting idea wasn't good enough no matter how many filters are applied and so it dies a natural death.Its not because the person has found a holy grail.lol.
It is very difficult to develop a mechanical trading system.Most of the times it looks like a waste of time but its not.Remember how many time edison failed in making the ligh bulb.I don't have a fully mechanical system but i get to learn coding because i made all those failed attempts.It has made life easier for me as a trader.

Those who gone through such a pain get natural tendency to see others pain. and help without any condition. sometime people judge them as fools. but they know wht they are.
As i seen your code i understood tht you are a fighter like me who love fighting for his own dreams instead of taking lift.

Fulfilling my promise of telling my understanding

But as I read thread I came to see that VK ji and some other members have already found it so it's not a secret at all but still i will post it

Market is an unending flow of orders, its an auction process where buyers and sellers meet at an agreement of price but this order flow is not at all steady and equally same at all times, it's seen and understood that whenever the volume is low as discovered by lv bar concept by VK ji, it's because not many buyers or sellers think that that particular area is of value anymore so price has to go to some other area where it will find more takers and value for the auction process be better and smoother............. So when this low value area is identified then we have a good chance that price will move further away in some direction either up or down, sometimes we can change time frame to even 5 minutes with lvb afl to see the hidden area of low volume which is seen differently than 1 minute time frame but that also works good IMHO.

Thanks Varun ji for this new concept and thanks all the coders as well for tireless efforts MB ji, EXTREMIST ji, Manish ji, HAPPY ji and all others who did great job of helping all of us including me

Looks too good to believe..!
Not sure if it will work in live market..?

Sent from my iPhone using Tapatalk

Is it close to your method View attachment 22109

Its a Modified form of linear regression slope lines..!

 

[vijkris]

have you started trading or still learning. compiling of stuff is good but i dont think its gonna help you much as you need to zero down whether you trade a complete system or discretionary way. kichdi of both have not serve you well.

Hi sir, yes, I am trading.
Btw, I was just compiling those posts as I know, no one else will do.. And as usual some one or other will ask the same Q to @varunkochhar the rules, summary etc. Then it will spoil the mood of entire thread, so better at that time these posts will be of some use.

Frankly speaking I do not understand any of the methods. Most of the method creators are intelligent fellows, those following are also intelligent fellows.
Myself 60% marks fellow, I need different type of solution... One has to be consistant and disciplined though.

 

[XRAY27]

Hi sir, yes, I am trading.
Btw, I was just compiling those posts as I know, no one else will do.. And as usual some one or other will ask the same Q to @varunkochhar the rules, summary etc. Then it will spoil the mood of entire thread, so better at that time these posts will be of some use.

Frankly speaking I do not understand any of the methods. Most of the method creators are intelligent fellows, those following are also intelligent fellows.
Myself 60% marks fellow, I need different type of solution... One has to be consistant and disciplined though.

Good work !!!! vijay !!! anyways thread is running very fast indeed, i have added few of the points of OBV ,cannot allot time to study new findings...

 

[vijkris]

Adding few useful posts from TP ji's thread.

Yesterday's NIFTY EOD candle was nearly a DOJI, so was prepared for a big move either side @morning. Last two day was range bound market.
And today what market did, OPEN=HIGH.
-----
Most of the times we can make huge money just following such simple EOD based technicals.

OPEN=high/low should be seen only at opening time 9.15 or can it be seen at every opening/starting moment of a timeframe?

thanks

Open equal to high or low is used to assess momentum in first 5 to 15 minutes, can be very misleading. However in the direction of a strong trend, for e.g. open=low (in a strong uptrend) that is maintained at the end of first 5min. candle, one can consider taking half position long at the breakout of that candle.
But things can change very fast, if however the trend does continue for the rest of the day, that's possibly the earliest place one can enter.

Vivek

1. Use OPEN=HIGH/LOW along with other technicals on EOD Daily Chart analysis to get more benefit. When open=high/low followed by PREV DAY price band squeezed, hourly BB squeezed, eod doji, EOD Narrow range day NR3, NR5, NR7, from overbought or oversold zone etc.
2. OPEN=HIGH/LOW must be seen 1m, 3m, 5m &15m charts combinedly. Add ur positions with increasing size in the direction of the trend. Also book partial and hold the rest.
3. When we anticipated a big move is coming using technical analysis OR before any event days OR after overnight critical news/event and market react with OPEN=HIGH/LOW. It's an ideal time for small risk-high reward trades.

But just randomly scanning open=high/low and make trades based only on this information does not make any sense.

************
OPEN=HIGH/LOW is an additional confirmation when you anticipate a big movement is coming in either way. We can make a huge profit with big intraday leveraged position using a small stop loss. When trend goes one way in our favor, it's a jackpot trade. If we win only one with 3-4 such calculated low risk-high reward attempt, still we get huge profit overall. That's the magic of OPEN=HIGH/LOW.

 

[rjshem]

Hi sir, yes, I am trading.
Btw, I was just compiling those posts as I know, no one else will do.. And as usual some one or other will ask the same Q to @varunkochhar the rules, summary etc. Then it will spoil the mood of entire thread, so better at that time these posts will be of some use.

Frankly speaking I do not understand any of the methods. Most of the method creators are intelligent fellows, those following are also intelligent fellows.
Myself 60% marks fellow, I need different type of solution... One has to be consistant and disciplined though.

Others method may not work for u as each person is different.keep watching lots and lots of charts.U need to find what works for u and then stick with it no matter what .always try and keep it simple. Always remember trading is more than method .u should work more on improving ur reward in winning trades ie how to get bigger r taking into account ur expenses per trade.thats what matters most than method.so keep going all the best.

 

[vijkris]

saving Tuna's posts..

No comments from my side.

Don't want to discourage you guys as you are trying to build something different. But let me tell you one thing. In trading, there are two worlds :

1. Mechnial Trading
2. Discreationary Trading (with or without indicators)

- Both Regardless of the TF

Decide which side you want to join. if you say mechnical (anyting like CCI, STI, OBV, FCB blah Blah), create rule, create the AFL and run a 5 year back test, and share it.

Do it for 1 min to 1 hour (or 1 day) : Result will be in front of you, if it makes sense to track the system every minutes or occasaional view of 1 hour is enough.

On the other hand, if you have a system, but you take the liberty to make a entry (and saying I did this because, so and so and so), but there was no AFL trigger, buddy, you are as good as a non-mechnical trader. Don't give excuse of system in that case.

I belong to second catagory. I don't know about others. Being pure mechnical is my dream, but I never could build a system which gives a consistent profit like second cat of trader.

Issue with second catagory:

• There will be days you will make bad choices and suffer.
  
• You should know if you are seeing a lossing streak (weekly stop, monthly stop)
• You have to develop the ability of ending the day in loss and closing the terminal quitely

difficult part. You are the AFL here. And you will develop bug as you are not the same 'you' everyday. So I don't encourage anyone to opt for second catagory either till you have a profitable AFL. Second catagory is for the master leage and I am still in the level of a watchman, only good thing, I am inside the gate of the campus. LOL.

Anyone, telling his is using his system for trading - code ,backtest and share the result (5 years is a decent period). Let all see the winrate / rr and decide if it is good system to use.

The worst sin is fooling self and others telling I use a system, but actually taking discreationary calls. Don't do it.

Sorry for long post, but could not resist myself from sharing my view guys. The second post, please bear with me (hopefully the last one).

What is trading? It is 'Dhanda'. Business. Earning is difference between Entry and Exit + Direction being in your favour. The only thing (trust me), the only thing that holds good in trading always, is S & R --> Support And resistance. If you really want to build something, try this (You can use anything, CCI, OBV, STI etc):

1. Is there a disagrement between the price & your indicator (which is supposed to trade in direction of the price)
2. Is it happening near a known point of S & R (FCB is beautiful tool, EMAs can also be used, like Varun does)
3. Is the failure point clearly identified (the place where the SL should be)
4. Most important part --> the exit conidition, the biggest problem of code based system. You can try RSI ,50 cross to exit buy etc, but it is sub optimal. This is the most critical part. If you can address this. you are done. Entering the market is not difficult, the exit is where we get the 'Pitaji ki Maafi' from Market.

I am coder (my league hates to use this word, so they calls me technical specialist) for some 14 years. And probably explored all the avenue of code based trading I could have done. So I am aware of all the drawbacks I suffered.

The job is trading is "predict the future" & Repeatedly. And among all setup I have played, only 2 concepts shows maximum repeatibility:

1. A pullback during a strong trend, turning in direction of the trend, the pullback should stop pulling back further at the known areas of S&R, you enter and enjoy the wave3 of the trend

2. Divergence - Price should not agree with something - it could be volume(OBV, WADV), strength (RSI), Momentum (Stoch), Rate of Change (ROC, CCI) or Volume + Strength (MFI)

Babu Rao: Ye Tuna. Bas kar re baba. Aur ye baki log, next time mera system mera system kiya na, to back test ka result daalo. Live trade dikha raha bolke discreationary trade ko mechnical trade mat banao. On hinds eye everything is rossy, the real result of the code is in its executions. So banao AFL aur chalo Back test. Jab dil shaant ho jaye ki bhai bahut hua tab rok na.

This is what you will find (let Tuna Predict):

1. A system with high win rate & high frequency (more trades), will have low RR (lower profit on winning trade compared to loss on the losing trade)

2. A system with high RR and High Win rate will have low frequency (matlab, you need a job buddy or huge amount to play with so that even 3-4 trade a month can take care of your monthly expense)

3. A system with high frequency and high RR will have pathetic win rate (2 out of 10 trades are winner)

Ideal system (mechnical, if anyone disputes it, dont give excuse of trades on bloggs, show backtest result, in mechnical world, we are mehnical - no middle path plz):

Code based system (which can be back tested + 0 discreation) with High win rate / High RR/ High Frequency - does not exist.

Prove me wrong - I will quit coding and sell banana in front of laalbag.

This is what I meant

TF hourly. You can nail more trade in lower TF. But dont go by mere frequency, here we are lowering frequency to increase win rate (90% I guess) and RR. Few trades yielded 1.5k I guess.

Arugument could be made, why note to go long at the first green renco ->> you can, who is stopping you. But then see the number of whips you will get. Making money is about going for high probable trade.

If frequency sucks - go for lower TF, you will get more opporutinities.

Always remember - there are 3 things.

1. Win Rate - How many out of 100 traded you win, or simply win%
2. RR - what is loss you make when you lose compared to profit on winning trade
3. Frequency - How many time Babu Rao get a chace to drink, I mean trade

Do whatever, you have to sacrifice 1 of these to improve the other 2. This is the matrix of trading - considering your instrument is fixed (alway BNF, or NF).

What you can do - improve 1 & 2 and sacrifice 3, and scan for new instrument everyday for this setup. Cheers.

If someone says, he does all 3 in same instrument - he is making you something which starts to alphabet 'Ch'.

 

[vijkris]

another one:

Just reading is not enough! What have you learned? Pointed out? Started applying and finding out which one is working for you and which one is not?

It takes years to apply the knowledge successfully in trading, what we read in a book...

**************
YOU DON’T NEED TO BE SMART TO TRADE, U NEED THE TRADING SKILLS...

“I haven’t seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren’t. Many outstanding intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important.” – Mark Douglas

Mark basically highlights one of the misconceptions that people have about trading.
Mark’s quote states that intelligence has little effect on trading performance. Would either Einstein or Isaac Newton have made good traders? Maybe not.

“Forex trading requires the learning the type of skills that people just aren’t simply used to learning – Mental Skills.” – Mark Douglas

*******
Got the idea? You need something extra from inside, your edges...
some applied knowledge, experience, psychology, and skill...

My add on, Trading is about learning self-mastery....To learn trading skills, you need to spend at least 7000-10000 hrs of screen time in front of the terminal.
When u start applying the knowledge from the books in real life practicing and analyze the trades, ledger, emotion-psychology, reason behind entry-exit, cutting the risk....with every day u progress as a trader. Successful trading is a journey.. a process...
There is no short cut method...It takes years...
Best Wishes...

 

[vijkris]

Saving it here ,

Reply kal hi karne wala tha. But was stuck in traffic due to heavy rain. After returning home, was playing video game on Ami Broker. So anyways.

First congratulations for opening up. Jaruri hain. Always be like this, on the forum. Real life pe kiya to chappal padenge tumko bhi aur mere ko bhi (for encouraging you to speak up).

Now on Profit system (bold part) if 100% mechanical - No one, neither me will ever share the system which is our golden system for profit. No it is not about selfishness, it is about protecting this system. Do you know why? once you reveal a system specific to an instrument returning decent return with a proper backtest report, many will jump in. We may be feel TJI is a small place, but it is on the internet. And it does take time for folks to find out or spread it by word of mouth - money is addictive. And once it is done, the system is dead. It happened to many systems in past and will happen in future, especially the mechanical one.

What I did instead here, I gave you are concept based on which I build my system:

1. Trend days (always) - trade the pullback
2. Avoid Contra

Now many of us, like Varun and me are typically discretionary traders. We have a trading concept, we know where the trade can go wrong (to exit) and when to enter - that is the system. It is not AFL (like you see on my thread these days or on Varun's thread).

The issue in trading is - what you see on the price chart is just an advertisement - like the ticker you see on the television screen --" Kya aap motapan se padeshan hey...main bhi tha, fir maine ye belt try kiya'.

Now you can react to it, how you feel -
1. I am really getting fat, need to do something
2. F**K this, all bogus
3. change the channel

This is discretion. The ad does not tell you are fat or not. What you make out of the ad is the image of what you think inside your mind.

The market is just the mirror. It does not tell to buy or sell (you read it right). Otherwise, everyone will buy at 'perceived' bottom and there will be no seller. You still get a seller at the market bottom who feel it is not bottomed yet, right?

What we trade (discretion) is what your reaction to market movement - unless it is mechanical (100%), you use any damn thing like you are discretionary. The Same indicator can be interpreted differently by 2 different people and only 1 will be right.

1. RSI (14) - overbought, lets sell
2. RSI(14) - overbought, let hold, trend will continue

who will be right - God knows.

A discretionary trader can give you a high-level idea how he/she trades, but can never give rules which can be coded - cause he tends to feel the move, duck few signals, and bite the rest. This comes with confidence, which comes from past track record of trading this way, reflected on your P&L statement.

This is something impossible to teach, but to be self-taught.

The issue is (Driver for me to move to Mech, at least for MCX), is that- you are not in BEST form every day to pull off stunners. Does not work with me. And it is painful. Then again back to form, make up for the defecit, earn some extra flab.

The snake and ladder game was catching on my nerves for long and I finally gave up (MCX, not at Nifty, yet, still good there). Now moved to Mech. All Tested. At least, I dont have to blame myself for stupid entries. LoL.


Mechanical system - easily can be taught, but if the person will have the rigor to stick to it when P&L goes high, take dip or hit a drawdown - that is best left to person.

There are beautiful mechanical systems - but most profitable ones, best not be shared. will never be. I don't know about other, I will not share for sure (except with very few, who can keep secret).

 

[vijkris]

Copying posts abt investments

Hi vivek Bro
How do you track diffrent companies for investment? I am not much into investing right now as right now concentrating on increasing trading capital..
Bought Meghmani organics some 2 years back for longterm investing..now its 5 times of my cost price ...bought the trident also ..its also 5 times ...last diwali bought dhfl ..it also gives 70% appreciation..but couldnt invest much on those shares..otherise need of traing will be stopped..but I want to invest more in coming future but before that I want to learn investing..
Please share the learning process of investing
thanks

Well NT bhai I am too naive to guide you. I think I have troubled ST sir many times on this. So, its mostly his inputs I am putting briefly:
One way to spot emerging bluechips is to read Motilal oswaal wealth creation study that comes in december every year.
Few basic principles are:
1. Stay out of sarkaari companies.
2.Look for themes that are supported by government policies for e.g. housing and housing finance companies.
Ab ghar banega to electricity bhi hogi, then think of electric wire company, just an example why I wanted to invest in KEI cables.
3.Look around your market place, to find whats selling like hot cakes, then zero in on its sector, then find the best company in business.
4.Revenue growth YOY, less or no liabilities, good amount of liquidity in hand, good management (sanskaari company), no direct government interference are all desirable.
5.ROE of 25-50%
6.I firmly believe that core portfolio should mostly contain Large caps, no matter what happens they will be the first ones to shine when sun rises again. One can start an SIP for midcaps-like Mirae asset's emerging bluechip fund.
7.Diversify (but not too much), 12-15 companies in toto
8.Follow people who know what they are doing, I have a Smart_case :
HDFC bank
Maruti
Bajaj Finance
Asian paints
Dmart
Punjab housing finance
CDSL
CAPF
KEI

Bhai itne bahut hain, yehi khareedte khareedte paise khatam ho jaate hain