Thoughts on Day/Swing Trading
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Not the usual island reversal which you see in TA books, Murthy....this is a bit different.
In the above 60 min NF chart I have marked 3 places where there is no overlap between the two bars or in other words light passes through them.....when you have such bars there is a good possibility that overlapping sideways action is over and the trend is starting. If any subsequent bar on closing basis closes this gap, then this indication is negated. I used to call them " Key Hole Bars" ...but Island bars looks to be a better term......
When you get such bars after the move has run its length, or it is near some support/resistance or TDST points.....we get a double confirmation on our view on the market .Avoid temptations of applying this to each and every bar.
But does this work 100 % ? No way as nothing in the market works 100 % time. But once you have direction on higher timeframe, you can zoom in on smaller timeframe and take trades with tight stops.
@ Others : Please do not use this as a stand alone trading system.......
Smart_trade
Not the usual island reversal which you see in TA books, Murthy....this is a bit different.
In the above 60 min NF chart I have marked 3 places where there is no overlap between the two bars or in other words light passes through them.....when you have such bars there is a good possibility that overlapping sideways action is over and the trend is starting. If any subsequent bar on closing basis closes this gap, then this indication is negated. I used to call them " Key Hole Bars" ...but Island bars looks to be a better term......
When you get such bars after the move has run its length, or it is near some support/resistance or TDST points.....we get a double confirmation on our view on the market .Avoid temptations of applying this to each and every bar.
But does this work 100 % ? No way as nothing in the market works 100 % time. But once you have direction on higher timeframe, you can zoom in on smaller timeframe and take trades with tight stops.
@ Others : Please do not use this as a stand alone trading system.......
Smart_trade
in first and third example ,no over lap is clear to me where you have used three bars
but in middle example,it looks four bars are over lapping each other and you have used four bars to show no over lap
if four bar are permitted to check no over lap zone
or i am doing some mistake in reading above chart
if you clarify i will be obliged
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Demand Bar & Supply Bar Trading
Below is a Chart of NIFTY Hourly (GCI) reason I put GCI within brackets is because I am not sure about their Nifty Data and since their Sever Time is set to NY Time (EST) we will have Candles which are different from those that are formed based on IST. Noticed this anomaly creates quite a bit of price/bar splits especially troublesome for the higher TF 30 & 60 minute.
Having got the anomaly out of the way.... Here is an exercise for those interested to try & identify 'Demand Bars' & 'Supply Bars' on the chart below with reasons either annotated on the Chart or in the post
Demand Bars & Supply Bars do give extremely juicy Entries & Exits & surely there will be failures in the conditions hence the S/L ...
1) Entry Points
2) Exit Points
3) Where to Keep the Initial S/L
SG
Here is the same Chart with Demand Bars & Supply Bars marked with A Green & Red Dot respectively
Can you find 'Why' those Bars are singled out for Demand & Supply
SG
'Qualifiers' To Single Out The Bar For 'Supply Bar'
Immediate Candle on the Left & Right of the Supply Bar Should Have Smaller Top Wick Than The Supply Bar & Both Candles On Either Side Should Have Made Lower High
'Qualifiers' To Single Out The Bar For 'Demand Bar'
Immediate Candle on the Left & Right of the Demand Bar Should Have Smaller Lower Wick & of course Both Wicks on either side should be Higher Than the Demand Bar Low
Low Of The Demand Bar is not the Correct Initial S/L for Long Entry & Similarly High Of The Supply Bar is not the Correct Initial S/L for Short Entry
SG
.....Thought someone would be able to point out that all the SB & DB marked on the Chart do NOT meet the 'Qualifier' Conditions.....
SG
There is some obvious advantages to trading, with this simple identification of SB & DB is...
a) Reward To Risk is better
b) Percentage of Winners improve squeezing out lot more juice from the Trade
c) Failure of DB & SB is much Less
d) Gets one out of a losing trade faster
&
e) False Breakouts & Break Downs which many new traders fear so much is well taken care of through this Identification of DB & SB
Next post will tackle the Initial S/L & Trailing Exit
SG
Yes Bala...you can...!!! Test it on some charts that you have for smaller TFs like 5 min.
Depending on what the 2 previous bars have done & if it looks like the current bar is going to qualify for DB/SB based on the previous 2 bars...then take the Trade in the last 15-25 second before the 5 min. Bar closes....for other TFs like 10 or 15 min. you can enter perhaps even 30-45 seconds before the bar closes.
Do Keep the 'Qualifiers' in front for a few days till it becomes second nature.
SG
Bala,
Had an idea...if you have Ami then use the Bar Replay....to test it out for different TFs and S/L & Trailing Exits.
SG
Someone asked me if we can have an afl for these Supply and Demand Bars as introduced by Sushilji......
So, here you go....
Below is a Chart of NIFTY Hourly (GCI) reason I put GCI within brackets is because I am not sure about their Nifty Data and since their Sever Time is set to NY Time (EST) we will have Candles which are different from those that are formed based on IST. Noticed this anomaly creates quite a bit of price/bar splits especially troublesome for the higher TF 30 & 60 minute.
Having got the anomaly out of the way.... Here is an exercise for those interested to try & identify 'Demand Bars' & 'Supply Bars' on the chart below with reasons either annotated on the Chart or in the post
Demand Bars & Supply Bars do give extremely juicy Entries & Exits & surely there will be failures in the conditions hence the S/L ...
1) Entry Points
2) Exit Points
3) Where to Keep the Initial S/L
SG
Here is the same Chart with Demand Bars & Supply Bars marked with A Green & Red Dot respectively
Can you find 'Why' those Bars are singled out for Demand & Supply
SG
'Qualifiers' To Single Out The Bar For 'Supply Bar'
Immediate Candle on the Left & Right of the Supply Bar Should Have Smaller Top Wick Than The Supply Bar & Both Candles On Either Side Should Have Made Lower High
'Qualifiers' To Single Out The Bar For 'Demand Bar'
Immediate Candle on the Left & Right of the Demand Bar Should Have Smaller Lower Wick & of course Both Wicks on either side should be Higher Than the Demand Bar Low
Low Of The Demand Bar is not the Correct Initial S/L for Long Entry & Similarly High Of The Supply Bar is not the Correct Initial S/L for Short Entry
SG
.....Thought someone would be able to point out that all the SB & DB marked on the Chart do NOT meet the 'Qualifier' Conditions.....
SG
Here is the same Chart with Demand Bars & Supply Bars marked with A Green & Red Dot respectively
Can you find 'Why' those Bars are singled out for Demand & Supply
SG
Can you find 'Why' those Bars are singled out for Demand & Supply
SG
a) Reward To Risk is better
b) Percentage of Winners improve squeezing out lot more juice from the Trade
c) Failure of DB & SB is much Less
d) Gets one out of a losing trade faster
&
e) False Breakouts & Break Downs which many new traders fear so much is well taken care of through this Identification of DB & SB
Next post will tackle the Initial S/L & Trailing Exit
SG
'Qualifiers' To Single Out The Bar For 'Supply Bar'
Immediate Candle on the Left & Right of the Supply Bar Should Have Smaller Top Wick Than The Supply Bar & Both Candles On Either Side Should Have Made Lower High
'Qualifiers' To Single Out The Bar For 'Demand Bar'
Immediate Candle on the Left & Right of the Demand Bar Should Have Smaller Lower Wick & of course Both Wicks on either side should be Higher Than the Demand Bar Low
Low Of The Demand Bar is not the Correct Initial S/L for Long Entry & Similarly High Of The Supply Bar is not the Correct Initial S/L for Short Entry
SG
Immediate Candle on the Left & Right of the Supply Bar Should Have Smaller Top Wick Than The Supply Bar & Both Candles On Either Side Should Have Made Lower High
'Qualifiers' To Single Out The Bar For 'Demand Bar'
Immediate Candle on the Left & Right of the Demand Bar Should Have Smaller Lower Wick & of course Both Wicks on either side should be Higher Than the Demand Bar Low
Low Of The Demand Bar is not the Correct Initial S/L for Long Entry & Similarly High Of The Supply Bar is not the Correct Initial S/L for Short Entry
SG
Depending on what the 2 previous bars have done & if it looks like the current bar is going to qualify for DB/SB based on the previous 2 bars...then take the Trade in the last 15-25 second before the 5 min. Bar closes....for other TFs like 10 or 15 min. you can enter perhaps even 30-45 seconds before the bar closes.
Do Keep the 'Qualifiers' in front for a few days till it becomes second nature.
SG
Bala,
Had an idea...if you have Ami then use the Bar Replay....to test it out for different TFs and S/L & Trailing Exits.
SG
Someone asked me if we can have an afl for these Supply and Demand Bars as introduced by Sushilji......
So, here you go....
Code:
_SECTION_BEGIN( "SG's Demand and Supply Bars" );
TopWick = IIf( Close > Open, High - Close, High - Open );
BotWick = IIf( Close > Open, Open - Low, Close - Low );
SBCond1 = TopWick > Ref( TopWick, -1 ) AND TopWick > Ref( TopWick, 1 );
SBCond2 = High > Ref( High, -1 ) AND High > Ref( High, 1 );
SBCond3 = Ref( TopWick, -1 ) > 0.009 AND Ref( TopWick, 1 ) > 0.009;
DBCond1 = BotWick > Ref( BotWick, -1 ) AND BotWick > Ref( BotWick, 1 );
DBCond2 = Low < Ref( Low, -1 ) AND Low < Ref( Low, 1 );
DBCond3 = Ref( BotWick, -1 ) > 0.009 AND Ref( BotWick, 1 ) > 0.009;
SpplyBar = IIf( SBCond1 AND SBCond2 AND SBCond3, shapeSmallCircle, shapeNone );
DmndBar = IIf( DBCond1 AND DBCond2 AND DBCond3, shapeSmallCircle, shapeNone );
PlotShapes( SpplyBar, ParamColor( "SupplyBar Color", colorRed ), 0, H, 10 );
PlotShapes( DmndBar, ParamColor( "DemandBar Color", colorGreen ), 0 , L, -10 );
_SECTION_END();
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