This is the way to Trade Nifty Futures

Plot EMA 30 with High and Low lines on Nifty futures on 15 mintures Timeframe.

Buy = when the price closes above ema 30 high.
Short = when the price closes below ema 30 low.

Many wonder how this is going to work in sideways markets which whipsaws.

There is a way to counter this.

A bit of martigale method. Actual martigale requires unlimited capital. But this martigale is capped with limited capital. The flaw in martigale is removed.

Start the first trade with 25 qty. (It is going to be shortly 75, but for the sake of easy understanding I will go with 25).

If the first trade ends with loss, second trade will be 50 qty. If the first trade ends with a profit, the next trade will be of 25 qty again.

If the second trade ends with loss, third trade will be 75 qty. If the seond trade ends with a profit, the next trade will be of 25 qty again.

If the third trade ends with a loss, fourth trade will be 100 qty. If the third trade ends with a profit, the next trade will be 25 qty again.

If the fourth trade ends with a loss, fifth trade will be 100 qty (note that we have not increased the qty here......and the qty 100 will continue until you hit a profitable trade). If the fourth trade ends with a profit, next trade will be 25 qty again.

In a nutshell, with each loss you are increasing your lot size by 1 until 4 lots (maximum). If the loosing spree continues beyond 4 lots (ie 4 losses in a row), you will continue to trade with 4 lots until you hit a win trade.

Whenever you hit a win trade, your qty comes to default size ie 1 lot again for immediate next trade.

See yourself the backtested result for the same for last 3 months.

Required capital is 4 lots margin +40,000 ie Rs.1,20,000. You can expect a return of Rs.30 to 50,000 in a 3 months timeframe.

This system has generated a total of 67 trades in last 3 months period. I have deducted 6 points for brokerage and slippage for a round trade.

SEE THE ATTACHMENT FOR THE TRADE AND EQUITY CURVE.

What will be the exit rules ? Target and stoploss.

This Is some kind of revenge trading as you increase your lot size when ever you lose. And you do that four times in row when needed and then you post you stop with that when losing the fifth time. You suppose now that you not can lose any more with that kind of MM and never a "Black Swan" event happen when you are on your absolute limit with your kind of MM. This kind of trading is clearly for losers.

Agreed. One request. Give me any random three months data in a row of Nifty futures, let us check it out with the envisaged rules if it is a system of loosers. It seems you have not understood the way the lot size is increased. Its not the way martigale used to be. Revenge comes into play when you bet in the same direction (most probably) but this system is playing to be on the side of trend. The best way to start trading with this system is when you see a consecutive losses of 4 or 5. A cushion of margin takes care of a "Black Swan" event.

Let us see how this fares well in next 3 months. I bet I wont blow my account.

It is a system to be always in the trade either long or short.

Your money, your choice.

Good luck and I wish you only, and really only the best in the long run and as much money as you can make with your system.

Still: Calling it: "This is the way to Trade Nifty Futures" is absolute bold and in no relation to reality.

Such trades of increasing the Trade size with every loss for 3 consecutive losses is easier said than done.

Please check for the periods mentioned.

Feb-1 to April Expiry - 2012

15 Sep 2013 - 31 Jan - 2014

Sep01 -09 - 15 Aug 2010

confirming exit rules:

you won't book your profit on long trade unless you get a short signal and vice versa?

please keep the periods as 3 months. 2nd and 3rd periods are irregular. ie not 3 months periods.

I have checked up Feb to April 2012. What a wonderful period to check the system........a sideways market to whips heaven.

Anyway.....the system has ended with Rs.2800 profit at the end of the period.

Another period is from Sep to Dec 2009.(this is 4 months period not 3 months. even 3 months period from sep to nov ended with profit) The system has ended with Rs.38ooo profit.

This is what I am claiming.............you won't loose your shift in extreme sideways market also. More over if you can whither the extremes of sideways market, you are ripe to profit in trending markets.

Let me check with other periods as well.