Set-Ups disscused & practised @ Nifty Futures Trading Thread.

[tsunil4u]

Originally Posted by renu daga

sunil have u noticed inside bar logic in nifty chart eod

i till now recently havent noticed

renu

yes i have noticed... just go through EOD chart of SPOT for this year...
i m not sure when, but I have experienced the breakout result.. try to look in march & april...

Inside bars are rare in EOD chart... but easy things don't come in plenty in life, do they?

in today's 60 min & 30 min chart, not a single inside bar!!!!... but today's one way ride was also like once in a while thing

[tsunil4u]

TBQ : TSQ RATIO/DIFFERENCE

Trading mostly in nifty, I have this setup as default market watch window:

1. Sensex
<space>
2. Nifty SPOT
3. Nifty FUT - 1M
<space>
4. MiNifty - 1M (mini nifty)
5. MiNifty - 2M
<space>
6
7
8
etc have the top 15 of Nifty 50 heavyweights

In last column, besides TBQ (total buy quantity) and TSQ (total sell quantity), I have made this "formula-driven" column : TBQ-TSQ (ie diff between TBQ & TSQ).. use insert column feature.

This diff gives me a good idea of what's the mood of the market in colour coding form, w/o the need of manually calculating the difference.
Blue colour means more TBQ
Red colour means result is negative (More TSQ)

This needs more screen-watching time experience...
Generally, if after a gap up open, there's more TSQ, 9 out of 10 times, 1st hour would be of profit-booking downmove...
Vice-versa, in case of gap down & more TBQs..

take note of the difference of both Big Future and Mini Future...
From personal experience, I find Diff in Mini more reliable...
eg. when the difference in MINI turns positive from negative (ie suddenly more TBQs than TSQs) and this sustains for more than 5 minutes, more chances of upmove

This visual indicator is not needed all the while.. but after crossing certain key supports & resistances, the quantum & kind of difference provides a good signal of change in sentiment...
for eg, on crossing 4100, there are more TBQs and the difference keeps on increasing towards positive side, then one gets an idea to buy on dips/support levels

[vvvv]

inside bar is a range contraction strategy...tony crabel stuff..this was written long time back with huge backtest results provided.but as per sum guy these kind of stuff like opening range breakouts & all are not working in the us markets anymore.dont know abt indian markets.has any1 backtested this stuff.
an exploration can be made to find out inside bars for nse stocks in EOD & then take the trade in intraday..but the problem is wht do u do on gap days,& if no gap day when do u initiate the order.
as per toby crabel whose backtested on different tick sizes,% of wins & losses differ with diff tick sizes..also if inside day is traded with opening range breakout,% wins increases.but then wht is the opening range???is it of the 1st 5 min bar or 1 min bar or sumthin else???
also ull find such stuff in Linda raschke's book but do they work in indian markets & how well is the question

[deb99891]

fantastic explanations sunil
especially ur inside bar strategy
yes this is true tat if as a daytrader we get some points move in our favour then the game is easy for us......
coz we need to trail the stop (weather the target 1 achieved or not....
totally my personal opinion can differ from ne one).
as a day trader i need only few ticks/points in my favour ...after the trade is on.....
now say tgt 1 is achieved ....here what i do....i will unload half position before the exact point...reached.....
sorry though this is the setup thread i am telling the method i follow...
ne way loking forward more from u ...
keep it up n keep em coming
deb

[alex_laxya]

Posting about vix, ... (as i am here to learn,so plz comment seniors)
First about vix ,its volatility index started by nse from April 08 based on methodology of CBOE vix of American market.Why I use vix?answer is I regularly write options( on my dads long term invested stocks ..ex. ashok leyland,hll etc.. ) so naturally i was concerned about implied volatility,as its very important for option trader....so my lot of set ups are related with o.i.,vix,put call ratio along with age old indicators.And it gives pretty good idea where the smart money trading.
Basic idea of vix is using it against popular belief that low vix( aka fear index) means low fear and so healthy for markets and vice versa.I use exactly apposite of it.
My rough back testing results
1)As you can see in above chart when vix was at its highest ( in between 11/7/8 to 13/8/8)market made important bottom of 3800 at jul end which is still holding.
2)In btwn 20 aug to 28 aug vix also made a small spike,that time market made short time support of 4250,market bottomed out from 4250 and touched 4550,
3)Now i am waiting for vix to rise and give us a reliable base,but vix is not yet broke previous aug high.
Laymens logic about VIX ... When implied volatility or vix rises, it indicates the weak hands getting scared and getting out of market cuz of herd mentality/tall on patience/disbelief etc...and when those weak hands wiped out,what remain is a residue of strong hands and so market made a strong bottom.We call the VIX as shaking out index.
I have high regards for S.Patra( economic times )who using vix divided by put call ratio( not o.i. put call ratio,two things are very different)and made his own indicator and as by his indicator,i mailed him two three times but didnt get a reply
I also use vix in context of open interest and open interest in put call ratio( another time i will write about o.i. p/c ratio)
Now we havent broke the prev vix peak and its totally new for me how things will shape up, for me today i felt we saw enough of volatility and we may bit cool off,but while posting saw s & p closed 50 points up,dow 450 up,so a gap up tomorrow ( might be ideal short on 4250 level initiated).. interestingly US vix made year high of 39 yesterday and today we saw a huge rally in s & p, that means s & p made a bottom yesterday!!( sorry cant help looking at s & p as my cousin lives in US & he trade in s & p and i trade in crude oil, we usually linked )
Also it is applicable for top out.indian avtar of VIX wasnt present when we at 6k nifty levels around nov,des 07,but i bate vix must be at its highest level ( i remember once i wrote near month call at hopping 300 rs. !!!)and we saw a major top as weak shorts wiped out and market gone in to strong shorts( technically fii were not allowed to short at that time, so we can say unwinding of long positions by fii,dmi,hni)

[alex_laxya]

my eternal qs. to all ....does any one come up with problem we all facing about gap up or gap down in nifty? ( as we dance 80% in the tune of dow baba )i tried to hedge my open positions overnight by pair trading ..ex long on nifty short on junior nifty,short on put and short on call etc... but it incurred huge brokerage losses ...by now my sleeping pill is suffer brokerage losses or take contrast position in commodity .. any help is appreciated

[alex_laxya]

posting my old posts from random thoughts on ta



Those rounded in green numbers are highs of volatility index( vix),if we put those rounded numbers in chart,i can imagine it will create a spike...and those two rounded VIX figures are highest ever in 3 months,... VIX represents volatility,volatility in other way is representation of extreme natures and those spikes suggesting highest extremity,as markets fallen on those extreme vix numbers,scary weak hands moved out of market,and whenever this happens,usually market bottomed out ( topped out if market closes higher on volatility spike).

[alex_laxya]

detecting pitfalls of our option market

[alex_laxya]

above explaining my open interest put call ratio set ups and how they drastically different from illiquid stock to liquid options

[alex_laxya]

The basic concept of counter trading



p.s. i posted originally in random thought before lehman brothers fiasco ..now if u add lehman instead of enron in chart..picture wont change.