Supersonic Intraday Trading

SUPERSONIC INTRADAY TRADING

The term SUPERSONIC refers to speed. Intraday trading demands decisions with supersonic speeds. Certain personalities absorb speed with much ease and come out with colourful results. Speed decision making is certainly an advantage to those who are capable of handling lightening speed decisions.

How about the people who are less capable when it comes to speed. Should they be left out for their own without the advantages of speed decisions. Here comes the "supersonic intraday trading" strategy to their rescue.

I would like to caution that this strategy results in profits or losses with lightening speed. Try this only when you are capable of withstanding such bulging or depleting trading account. I also caution those who are with heart ailments, tensions etc to skip this strategy right away.

Preliminary
Buy low and Sell High...Book profits. That's it.
Just kidding....

I presume that the concepts of stop loss, trailing stop loss, profit targets need no further explanations. This strategy strictly follows these concepts hence no doubts should exist about these.

Its based on randamisation i.e. price moves up/down for reasons unknown.

Plot MACD indicator to guage trend changes. Crossovers help to catch the trends. (MACD crossover is discussed in the following link http://www.traderji.com/day-trading/34577-day-trading-pivot-points-macd-indicator.html). The use of MACD is just an added advantage but not consider it as compulsion. Alternatively, plot 3 and 15 period SMA, take longs when 3 SMA crosses up above, 15 SMA and go short for reverse.

As in any strategy, our first step would be either to go LONG or SHORT a scrip. So, select a script. Go LONG or SHORT. For convenience, let us say we have gone LONG.

Profit Targets

Fix your profit target @ 0.55%. Round off to nearest tradable price which should be away from the traded price.

Stop Losses/Trailing Stop Losses

Fix your Stop Loss @ 0.27% (If the trade is in profit, a trailing stop loss @ 0.27%) Round off to nearest tradable price which should be towards the traded price.

Position Sizing

Start with a lot consisting of 10/20/30/50/100/500/1000 scrips. (As per your convenience).

Pyramidizing

Add 50% of the original position when profit target is hits. If Profit Target gets hit consequitively 3 times, Add 100% of the original position.

Risk/Money Management

The strategy is inbuilt of risk/money management.

Execution of Strategy

Discussed in the next post

Our trades should fall into any one of the following six scenerious.
Abbrevations : B/S - Buy or Sell ; T - Target ; TS - Trailing STOP ; SL/R - Stop Loss and Reverse; SL - Stop Loss.

Scenerio 1
B ***** T **** T ***** T (Ride the run until Trailing Stop Loss hit)

Example Trade :-

Buy 100 shares. Target is hit. Pyramidize - Buy another 50 scrips. Target hit. Pyramidize - Buy another 50 scrips. Target hit. Pyramidize...Third Target Hit in a sequence means Buy 100 scrips (ie original position size)(Ride the run until Trailing Stop Loss Hit).

Scenerio 2

B **** T *** T *** TS

Example :-

Buy 100 shares. Target hit. Pyramidize - Buy another 50 shares. Target hit. Pyramidize - Buy another 50 shares. Trailing Stop hit. Book profits by selling all 200 shares.

Scenerio 3

B **** T *** TS

Example :-

Buy 100 Shares. Target hit. Pyramidize - Buy another 50 shares. Trailing Stop hit. Book profits by selling entire 150 shares.

Scenerio 4

B **** SL/R *** SL

Example :-

Buy 100 shares. SL hit. Reverse the position by doubling the lot i.e. Sell 300 shares. SL hit. Book losses by buying entire 200 shares.

Scenerio 5
B **** SL/R *** T *** TS

Example :-

Buy 100 Shares. SL hit. Reverse the position by doubling the lot i.e. sell 300 shares. Target hit. Pyramidize - Sell 50 shares. TS hit. Book profits by buying entire 250 shares.

Scenerio 6
B **** SL/R *** T *** T (Ride the run until Trailing Stop Loss hits)

Example :-

Buy 100 shares. Stop Loss hit. Reverse the postion by doubling lot i.e. sell 300 shares. Target hit. Pyramidize - sell another 50 shares. Target hit. Pyramidize..... (Ride the run until Trailing Stop Loss hits)

How does this work?

Discussed in the next post

The Scenerios are divided into 2 Sets. Tgt Sets from 1 to 3 which are profitable. SL Sets from 4 to 6 which are potentially loss making.

Take position either LONG or SHORT. Now there will be two outcomes i.e. SL hit or Target hit.

If SL hit, we fall into SL set( ie from 4 to 6)
Action. reverse the trade and revise the SL and Tgt.

Now if SL gets hit, we fall into Scenerio 4.
Action. Square off the positions and book losses.

Now, if Tgt gets hit, we fall into Scenerio 5 & 6.
Action. Pyramidize and revise TS and Tgt.

Now, if Tgt get hit, we fall into Scenerio 6
Action. Pyramidize and revise TS and Tgt and keeping going like that until TS gets hit.

Now, if TS gets hit, we fall into scenerio 5
Action. Square off the positions and book profits.


If Target is hit, we fall into Tgt Set (ie from 1 to 3)
Pyramidize and revise the Tgt and Trailing SL.

Trade only as per the scenario and square off the positions when the chain ends.

Scenario 4 results in maximum draw down. Scenario 3 & 5 may result in losses if the brokerage rates are high. I suggest that on any particular day if any two initial consequitive trades fall into Scenerio 3, think its not your day and just quit the trading gently for the day. Until then, keep trading ...trading...trading. We can effectively remove scenario 3 & 5 from the list of risky ones, if this strategy is implemented on low brokerage trading accounts. (Go for trading a/cs like zero brokerage a/cs on fixed monthly charges just as offered by RK Global). This strategy is the best when the brokerage rate is less than 0.02%.

Keep a track of position size vigilently. This is particularly very very important because any fault in this respect may result in heavy losses. BE cautioned.

A watch on the direction of the trade is also important particularly when we are reversing the trades.

Strategy is built up with all money management techniques. However, if you are able to trade a stock in line of its trend, profits pour in as if the cloud is burst. I suggest use of MACD indicator to look for change of trends on crossovers. Its only a suggestion and not compulsion.

Identify your position quickly with the above scenerios, act accordingly. Change to be above scenerios is not recommended as it would impact adversely risk reward ratio adversely.

Donot continue the trades by clubbing the other scenarios. Whether profits or losses just close the trade when you reach the end of scenario chain.

Finally, it takes time to adjust with this strategy. But the fruits are so sweet worth a try.

All the best friends.

Hi..friends
When finished reading the strategy, doubts are bound to come up.
I welcome doubts which I am ready to clarify.

Very interesting.

In my paper trading I have found that in a crossover uptrend, targets are almost always hits with 0.50% up and stoploss hardly go below 0.68%.

I know risk to reward ratio is very high, but I just suggest you do some paper trading with these figures (in historical charts with 5min timeline). Probability suggests that small targets are reached before large stop losses are hit, in a moving uptrend with at least two indicators suggesting so.

Friend..
Target 0.50% - I understood this. However, I suggested 0.55% profit target.
Stoploss 0.68% - What is this? I have talked about 0.27% stoploss (Trailing Stop). It seems there is some difference in understanding of setting stoplosses. Please clarify.

I have set large targets and small stoplosses. That is 0.55% and 0.27%. Your observation is that small targets hit most than large stop losses.
What about large targets and small stoplosses. I would be grateful if you could share your experiences here. Also mention what are the indicators you have used.

However, thank you. I would be doing mock trading to check this strategy.

Using 0.50% target and 0.27% stoploss makes perfect sense..

I am in no position to argue with you otherwise.

Its just maybe that I think its better to hit a lot of small 0.50% and sometimes hit a big 0.68%, then to hit a lot of 0.27% and few 0.55%

All a matter of prespective I guess, and both are fine. I also dont trail my stoplosses as of yet... I would rather not even look at the quotes after placing my orders

As a matter of fact, I only do paper trading as of now. Will start real trading soon enough. Weird aint I. Just preparing myself to take my trade as unemotionally as I can.

I use EMA(13,5,5m) and FSTO(8k,3d) ((curtosy, Pride)). As a rule I never 'trade' unless both these indecators are in green in upward trend.
Only few trades have been lost, and most have shown positive results. Overall it added up to profit.




Anyhow, sorry to hijack your thread.
What terminal do you use for trading? perticularly for this type of trading...

Hi ,

I used to trade like this but i keep both sl & target of 0.5% but i wont add more when it hit target but i will trail the stop loss by 0.5 %

But sratergy in this have two problems

1.Brokerage ofcourse you have discussed but if u calculate 0.02 % it would be 0.8 - 0.95 in the end both buy,sell & taxes

2.when the equity moving very fast you can't put order in that when it hits the sl ,i even faced in 0.5 % but you said 0.27% ofcourse its for sl only but even that when it hits you have to place two orders sl & target doubling

Now i have doubts

1.Are you using this method if it is how is your profit ratio

2.I have got profit if it is up\down by 1.5 % but when it is sideway definete loss

But overall it is Good but some finetuning required

what you think am i wrong or right

Regards,
Venkatesh

Hi Velluri,
Quite an interesting one using 3 and 15 sma.. but how is it diff from SH315 method..
I am tracking your other posts and graphs. Why not a graph for this supersonic.. this would certainly help to understand this better.
Hope to see something like this in a chart will cerainly help to understand better..
Also, can this be used for NF??

Your participation is enough. I use Power Indiabulls.

Yes...venkatesh...you are absolutely right.
Selecting proper stock the speed of which we are able to respond is the key.
I have not done actual trades using this strategy. On keen observation, what i understood is that it works well when we target STOP LOSS hits than profit target hits. Does it sound strange? But its true. Take any chart. Just put trade against the trend. You will land in big profits. I bet it does. I am just kidding.....donot do it.

About brokerage, 0.02% is fine with this strategy.... it works.

True. Its similar to SH315 but not exactly the same. Its just a crossover thats all what we look for here.
I will post a chart as it would be more useful.
This strategy does not restrict itself to stocks. It can be applied to any one. But only after a mock trade.