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Intraday trading strategies (formulae)

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  #1  
Old 27th June 2008, 07:25 PM
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Lightbulb Intraday trading strategies (formulae)

DIFFERENT TRADING STRATEGIES :-

We can categorize or divide our strategies as per different time frames & situations for better understanding.

1. MORNING 30-MINUTES STRATEGY.
2. TRADES AFTER MORNING TRADES.
3. TRADES DURING QUARTERLY RESULTS.
4. GAP OPENINGS OF MARKET.

* MORNING 30-MINUTES STRATEGY *

This strategy is based on understanding the moves of the BROKER. ( sentiments )
If you track the Close price you will wonder the Open price of the trade day is not always the same as that of the previous days Close price. It is because the major brokers (BIG TRADERS) according to the sentiments lay a trap in which small traders get trapped and run into losses. If we understand the brokers mind we can make profits 90 % times in normal market in the first 3 to 30 minutes of trading.( Remember you should close your positions in this time frame )

Take the following figures and trade plan with you on the basis of calculations given below. We will call it Brokers Strategy ( BS )

Difference between HIGH & LOW of previous day i.e.: D = ( H – L )

Now BS = D / 3

BUY PRICE = ( Pr. Close – BS )

SELL PRICE = ( Pr. Close + BS )

For understanding the BS one should understand the following……..
STRONG SHARE or STRONG CLOSE (close price is higher than previous close) &
WEAK SHARE or WEAK CLOSE ( close price is lower than previous close )
Now on the basis of above calculations you are ready with the figures i.e.: BUY PRICE, Pr. CLOSE & SELL PRICE of STRONG SHARE & WEAK SHARE separately.

Now on trade day if STRONG share opens anywhere between Pr. Close & BUY PRICE you can BUY first & keep for sell @ SELL PRICE as your target.
The Trap :- As the broker opens the share at a price lower than Pr. Close one gets the feeling as if the share has become weak and sells it, thus falling in the trap.

On trade day if WEAK share opens at or above SELL PRICE you can SELL first & buy later @ BUY PRICE as your target.
The Trap :- As the broker opens the share at a higher price than the Pr. Close one gets the feeling that the share has become strong and buys it thus falling in the trap.

Note: For this strategy Preferably take shares with high volumes & less volatility(not operator driven stocks). This strategy will not work in GAP OPENINGS. This strategy requires you to be very fast in taking decisions and accordingly positions. Furthermore One should compulsorily come out or close the position in the mentioned time frame. Life is not that easy and if you find that your position was wrong immediately square it ( close it)
REMEMBER TO CLOSE POSITION WITHIN THE TIME-FRAME MENTIONED
FEEDBACKS WELCOME



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  #2  
Old 27th June 2008, 08:06 PM
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Default Re: intraday trading strategies (formulae)

These Sound Good . I Was Searching For Something By Which I Can Be On My Own. I Will Paper-trade First And Definately Give You Feedback. Hope There Is No Need For Any Softwares For Your Strategies?
Thanks
Fd
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  #3  
Old 27th June 2008, 08:26 PM
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Default Intraday trading strategies(formulae)

STRATEGIES ( FORMULAE ) FOR INTRADAY TRADING
by………..intradaySuRe.

The intraday movements of share prices are generally governed by Support & Resistance levels. The intraday volume, OPEN, HIGH, LOW, CLOSE & previous CLOSE prices are very important & one should track these prices daily. Previous data of 3 to 5 days is what is to be maintained or tracked. And the intraday data prior to the trading day is important.

OPEN ( O ) : The opening price for the particular day.
HIGH ( H ) : The highest price for the particular day.
LOW ( L ) : The lowest price for the particular day.
CLOSE ( C ) : The closing price for the particular day.

We can calculate the support & resistance levels for the next trading day with the help of above prices. The basic formula to calculate the various support(S1,S2,S3) & resistance ( R1,R2,R3 ) levels is as follows :-

Support & Resistance Levels

R3 = H + 2 * ( B – L )

R2 = B + ( H – L ) or B + ( R1 – S1 )

R1 = ( B * 2 ) – L

BASE = B = ( H + L + C ) / 3

S1 = ( B * 2 ) - H

S2 = B – ( H – L ) or B – ( R1 – S1 )

S3 = L – { 2 * ( H – B ) }

Mostly traders’ worldwide use above formula of Support & Resistance both for intraday trading as well as Delivery based trading. The general intraday interpretation of these levels (also called as PIVOT POINTS ) is if the Share price(or market) is above the BASE one should take a Long ( i.e. Buy ) position with target of exiting (Selling) at R1, R2, R3 levels. Similarly if the Share price (or market ) is below the BASE one should take a Short ( i.e. Sell ) position with the target of exiting ( Buying ) at S1, S2, S3 levels.

YOU have to understand one more important aspect of these levels. As the price moves from one level to other the immediate lower level becomes support & immediate upper level becomes resistance. Suppose the price is above R1 than R1 becomes immediate support & R2 becomes immediate resistance of the price movement.

Before understanding the different Strategies, we will take a look at the results of a very long term study of more than 10 yrs.

Actual LOW is lower than S1.......... 43 % times.
Actual HIGH is higher than R1......... 43 % times.

Actual LOW is lower than S2......... 17 % times.
Actual HIGH is higher than R2......... 17 % times.

Actual LOW is lower than S3......... 3 % times.
Actual HIGH is higher than R3........ 3 % times.

Now just apply your mind to interpret the findings of above study to help you decide ENTRY & EXIT points for your BUY or SELL positions.

THIS FORMS THE BASIS OF YOUR UNDERSTANDING THE MARKET & INTERPRETTING IT BETTER & ALSO GRASPING MY DIFFERENT STRATEGIES.

POWER OF 3 :-
As a trader always remember 3 is a very important number.
3 sec., 3 min., 3 hrs, 3 days, 3 months , 30 % etc. and so on.

Some basics for a novice trader :
Intraday as the term itself is self explanatory is the position you take and clear on the same trading day.
As a general understanding of trading people feel that they have to first buy something to sell it later at profit.
But in intraday trading you can SELL a share even if you don’t have it with you. This is termed as SHORT SELL. i.e.: You sell suppose 100 XYZ share @ Rs. 250 , here if the price comes down to say 220 and you buy back the 100 XYZ shares. Your transaction is complete. 250-220=30. And 30*100=3000 Rs is your profit.
i.e.: Short sell is exactly opposite of the buy first and sell later transaction.
SHORT SELL transaction has to be compulsorily completed by buying back the equivalent no. of shares on the same trading day.

General but IMPORTANT for all :
REMEMBER INTRADAY TRADING IS A MINDGAME. There are many strategies one can apply to make profits daily in intraday trading as per my experience, observations & understanding. These strategies have been categorized or you can say designed on the basis of different TRADE TIMES, SITUATIONS, MARKETS, & SHARES. As discussed Mostly traders worldwide use above formula of Support & Resistance both for intraday trading as well as Delivery based trading short term & long term. So my advice would be to refer the support & resistance levels along with the various recommended strategies by me.
Although one can apply different strategies for different trades, I would suggest traders to select one strategy, which they are comfortable with, as per the mindset, personality & risk taking capacity.( i.e.: either BUYING strategy or SHORT SELLING strategy. A simple reason is that you cannot be two persons at one time, or you cannot have two views at a time.) Once you master one strategy, you can practice another and apply. YOU can also make profits forever by sticking to one strategy forever.
A little study or homework is compulsory to be successful and self sufficient, independent trader.
DIFFERENT TRADING STRATEGIES :-

We can categorize or divide our strategies as per different time frames & situations for better understanding.

1. MORNING 30-MINUTES STRATEGY.
2. TRADES AFTER MORNING TRADES.
3. TRADES DURING QUARTERLY RESULTS.
4. GAP OPENINGS OF MARKET.


* MORNING 30-MINUTES STRATEGY *

This strategy is based on understanding the moves of the BROKER. ( sentiments )
If you track the Close price you will wonder the Open price of the trade day is not always the same as that of the previous days Close price. It is because the major brokers (BIG TRADERS) according to the sentiments lay a trap in which small traders get trapped and run into losses. If we understand the brokers mind we can make profits 90 % times in normal market in the first 3 to 30 minutes of trading.( Remember you should close your positions in this time frame )

Take the following figures and trade plan with you on the basis of calculations given below. We will call it Brokers Strategy ( BS )

Difference between HIGH & LOW of previous day i.e.: D = ( H – L )

Now BS = D / 3

BUY PRICE = ( Pr. Close – BS )

SELL PRICE = ( Pr. Close + BS )

For understanding the BS one should understand the following……..
STRONG SHARE or STRONG CLOSE (close price is higher than previous close) &
WEAK SHARE or WEAK CLOSE ( close price is lower than previous close )
Now on the basis of above calculations you are ready with the figures i.e.: BUY PRICE, Pr. CLOSE & SELL PRICE of STRONG SHARE & WEAK SHARE separately.

Now on trade day if STRONG share opens anywhere between Pr. Close & BUY PRICE you can BUY first & keep for sell @ SELL PRICE as your target.
The Trap :- As the broker opens the share at a price lower than Pr. Close one gets the feeling as if the share has become weak and sells it, thus falling in the trap.

On trade day if WEAK share opens at or above SELL PRICE you can SELL first & buy later @ BUY PRICE as your target.
The Trap :- As the broker opens the share at a higher price than the Pr. Close one gets the feeling that the share has become strong and buys it thus falling in the trap.

This strategy requires you to be very fast in taking decisions and accordingly positions. Furthermore One should compulsorily come out or close the position in the mentioned time frame. Life is not that easy and if you find that your position was wrong immediately square it ( close it)

Note :- The BUY PRICE as per above calculation is approximately S1
& The SELL PRICE as per above calculation is approximately R1


* Some more morning strategies :……………….
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  #4  
Old 28th June 2008, 11:44 AM
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Default Re: Intraday trading strategies(formulae)

Hi.
Excellent posting.I am unable to understand that long term study.Kindly explain that and also in what way power of 3 will help us while trading sir?kindly help us to know other strategies mentioned by you.My email ID is chandrujimrc@rediff*********
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  #5  
Old 28th June 2008, 12:49 PM
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Default Re: Intraday trading strategies(formulae)

many sites offer ready made calculators for intraday supp & res for free.....& many SMS services offerings charge hefty amounts for the same in the name of magic formulas as lay traders r not aware of the same......

http://www.indiabulls.com/equities/m...pportEntry.asp
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Old 28th June 2008, 03:44 PM
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Default Re: intraday trading strategies (formulae)

HI

Also waiting 4 ur rest 3 strategy and be sure that iam going to evaluate all this in differnt mkt cond nd give u the feedback, but only after receiving all 4 strategy.

waiting 4 that

avijit
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  #7  
Old 28th June 2008, 04:32 PM
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Default Re: intraday trading strategies (formulae)

sounds gr8!!!

thnx...
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Old 28th June 2008, 04:38 PM
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Default Re: intraday trading strategies (formulae)

Quote:
Originally Posted by intradaysure View Post
DIFFERENT TRADING STRATEGIES :-

We can categorize or divide our strategies as per different time frames & situations for better understanding.

1. MORNING 30-MINUTES STRATEGY.
2. TRADES AFTER MORNING TRADES.
3. TRADES DURING QUARTERLY RESULTS.
4. GAP OPENINGS OF MARKET.

* MORNING 30-MINUTES STRATEGY *

This strategy is based on understanding the moves of the BROKER. ( sentiments )
If you track the Close price you will wonder the Open price of the trade day is not always the same as that of the previous days Close price. It is because the major brokers (BIG TRADERS) according to the sentiments lay a trap in which small traders get trapped and run into losses. If we understand the brokers mind we can make profits 90 % times in normal market in the first 3 to 30 minutes of trading.( Remember you should close your positions in this time frame )

Take the following figures and trade plan with you on the basis of calculations given below. We will call it Brokers Strategy ( BS )

Difference between HIGH & LOW of previous day i.e.: D = ( H – L )

Now BS = D / 3

BUY PRICE = ( Pr. Close – BS )

SELL PRICE = ( Pr. Close + BS )

For understanding the BS one should understand the following……..
STRONG SHARE or STRONG CLOSE (close price is higher than previous close) &
WEAK SHARE or WEAK CLOSE ( close price is lower than previous close )
Now on the basis of above calculations you are ready with the figures i.e.: BUY PRICE, Pr. CLOSE & SELL PRICE of STRONG SHARE & WEAK SHARE separately.

Now on trade day if STRONG share opens anywhere between Pr. Close & BUY PRICE you can BUY first & keep for sell @ SELL PRICE as your target.
The Trap :- As the broker opens the share at a price lower than Pr. Close one gets the feeling as if the share has become weak and sells it, thus falling in the trap.

On trade day if WEAK share opens at or above SELL PRICE you can SELL first & buy later @ BUY PRICE as your target.
The Trap :- As the broker opens the share at a higher price than the Pr. Close one gets the feeling that the share has become strong and buys it thus falling in the trap.

Note: For this strategy Preferably take shares with high volumes & less volatility(not operator driven stocks). This strategy will not work in GAP OPENINGS. This strategy requires you to be very fast in taking decisions and accordingly positions. Furthermore One should compulsorily come out or close the position in the mentioned time frame. Life is not that easy and if you find that your position was wrong immediately square it ( close it)
REMEMBER TO CLOSE POSITION WITHIN THE TIME-FRAME MENTIONED
FEEDBACKS WELCOME
It is all very interesting. I didnot know there are technicques that can be used for intra-day. The only tecnique I know is to follow my nose. But still here there are traps in your traps as you mention. I think I will try out real time without money ( only on paper). Once I gain confidence I can get in with money.

It is indeed kind of you to come out and teach. Many people donot want to expose their strategy. They should understand that they will continue to roll in money while teaching others who will be ever grateful to them for reducing their losses or making some money.

Simple language without jargons as you put it is most welcome.

Awaiting eagerly for the remaining strategies, slowly please one at a time.

Thanks a million.

VPS
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  #9  
Old 28th June 2008, 05:59 PM
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Default Re: Intraday trading strategies(formulae)

I am confused about CLOSE PRICE and PREVIOUS CLOSE. I was looking at Reliance Industries. If today is 27th June, can you please explain these figs by taking values from archives of NSE? Pl do this favour. Pl work out your entire strategy mentioned. I am not testing you and your strategy but trying to understand reference points

vps
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  #10  
Old 28th June 2008, 06:06 PM
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Default Re: Intraday trading strategies(formulae)

CLOSE ( C ) : The closing price for the particular day.

You mean closing price of yesterday which appears in today's morning papers. Am I right
Because todays closing price you will know only after day ends-- See my brilliance!!!!

vps


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