20% ROI per month on captial above 1 Cr possible?

sridhga

Well-Known Member
Brother ....i repeat, you have to test it manually for 3-5 years...

It wont work just like take 5 stocks with gap up/gap down above PDH /PDL... Trade breakout..

And also if today is loss , its part of game..you cannot have no loss day in any trading system...

Do not take my trades seriously. I am aware that some days are going to be loss making. That is exactly why I am trading in small numbers. Ryan Jones once said this after introducing his options strategy, "This is where many traders say bet the farm, mortgage the house and go all-in. This is where many traders are foolish. There is a lot of room for error, but, there are also a lot of things that can prevent this from being quite as consistent as we would like."

Actually, I am following Toby Crabel's approach to ORB.
In his book, he gave statistical reports of both profit making days as well as loss making days. Most people here have modified their approach and do not follow Toby Crabel these days. One important deviation that members discuss both on this thread as well as in other threads is the time lag required after open before we make an entry. We discussed this over the weekend at length. But at least in a couple of chapters, Crabel states that one has to make the entry as early as possible. I would read that as a recommendation specific to those combinations discussed in those chapters. But his book is very detailed. He discussed about 35 different approaches/combinations with ORB. Practically we cannot follow all of them. It is easier to choose just one or two. One important thing to note is that he is a commodities trader. He did not research on individual shares.

An interesting discussion we had over the weekend is about applying Al Brooks' approach to ORB. Al Brooks trades S&P index. He is more engaged to his chart with his bar by bar analysis and is not just limited to ORB in his approach. Though he tries to instill his chart reading abilities in the minds of his readers, I did find some deviations between his books, his course and the power point that was presented here. For example in his course videos, he does not like Japanese candle stick based reversal patterns. He did not seem to mention that in his books. Nevertheless, I agree with him as I believe candlesticks reversal patterns occur too often and you cannot say how strong the reversal is going to be. Very often, the reversal is negated in the very next candle stick. To compare the ORB approach that we discussed here, we need to look for his discussion on the topic, "The First Hour". Here he states "the best trades are usually related to patterns from yesterday." "The set ups are the same as during any other time frame". "What is different is that the volatility is often greater, and therefore the patterns run further, and the reversals are often unexpectedly abrupt" But I feel, to apply Al Brooks to ORB approach, we need strong engagement with the chart and so we cannot trade 5 different stocks. We should then stick to the index.
 
Index does not sync well with ORB

If one is looking to trade only ORB, its better to avoid NF/BNF
as compared to them any high volume traded scrip will give you 10/15% better win/loss over an index
Of course one can easily run the numbers and see for themselves

.
 

rajesh.singh

Well-Known Member
Do not take my trades seriously. I am aware that some days are going to be loss making. That is exactly why I am trading in small numbers. Ryan Jones once said this after introducing his options strategy, "This is where many traders say bet the farm, mortgage the house and go all-in. This is where many traders are foolish. There is a lot of room for error, but, there are also a lot of things that can prevent this from being quite as consistent as we would like."

Actually, I am following Toby Crabel's approach to ORB.
In his book, he gave statistical reports of both profit making days as well as loss making days. Most people here have modified their approach and do not follow Toby Crabel these days. One important deviation that members discuss both on this thread as well as in other threads is the time lag required after open before we make an entry. We discussed this over the weekend at length. But at least in a couple of chapters, Crabel states that one has to make the entry as early as possible. I would read that as a recommendation specific to those combinations discussed in those chapters. But his book is very detailed. He discussed about 35 different approaches/combinations with ORB. Practically we cannot follow all of them. It is easier to choose just one or two. One important thing to note is that he is a commodities trader. He did not research on individual shares.

An interesting discussion we had over the weekend is about applying Al Brooks' approach to ORB. Al Brooks trades S&P index. He is more engaged to his chart with his bar by bar analysis and is not just limited to ORB in his approach. Though he tries to instill his chart reading abilities in the minds of his readers, I did find some deviations between his books, his course and the power point that was presented here. For example in his course videos, he does not like Japanese candle stick based reversal patterns. He did not seem to mention that in his books. Nevertheless, I agree with him as I believe candlesticks reversal patterns occur too often and you cannot say how strong the reversal is going to be. Very often, the reversal is negated in the very next candle stick. To compare the ORB approach that we discussed here, we need to look for his discussion on the topic, "The First Hour". Here he states "the best trades are usually related to patterns from yesterday." "The set ups are the same as during any other time frame". "What is different is that the volatility is often greater, and therefore the patterns run further, and the reversals are often unexpectedly abrupt" But I feel, to apply Al Brooks to ORB approach, we need strong engagement with the chart and so we cannot trade 5 different stocks. We should then stick to the index.
Must say Very Lucid & Apt post.
Small clarification with regards to Al comments on Candlestick patters, he is equally vocal in his books also, and if you read all his four books you find similar references throughout , but that’s not the point, what he mostly tries to reiterate through out his books or courses that one should put more emphasis on structure of the market rather than what we call them , as he always says anything that looks like a pattern will act like one, in respective of the name .
Coming back to ORB, I personally believe and mentioned couple of time here in the thread that trading Open is complete system in itself .
What I feel one can approach Trading Open as complete system( Personally belong to this school of thought) but learning curve will be quite steep and for sure will require immense amount of effort and time.
Second approach is just focus on ONE setup like ORB, and apply it on various instrument…that what mostly Muthu is doing, Here What I feel if someone is starting out, and to have better Probability then better to base his trading decision around OHLC & Trend Line & Trend Channel line, with simple reason OHLC will be same in respective of the trading system and many other system also follow these levels. Same goes for Trend Lines, it will be same in given timeframe in respective of the system. This will solve two purpose first the better probability to start with and second analysing failure will be easy ,as bad setups can fail anywhere and nothing to gain. Idea is that once we put a trade, either we should gain financially or gain in knowledge, something to analyse , trade should not be wasted.
Looking forward to your take on Toby Crabel.
 

niftytaurus

Well-Known Member
Trading Open, is bit complex and complete system in itself, just summarizing the thought process I follow to trade Open, and this is system neutral, in respective on trading style or system on follow. As few of you aware my trading style is entirely based on Al Brooks, and what I trade and sharing below are based on that.
In Open there are primarily three kind of setup & every setup is based on below three Parameter, and these parameters are universal in respective of the trading style one follow.
First is the Context. This is supreme, unless we read the context right, we can’t trade right. First thing here is Directional Correctness, followed by Market structure and then the setup.
Second is Location, the trade has to be at some obvious support either at Trend Line or Ema, or whatever way one can define S/R . Advantages of good Location we mostly get Low risk Setup, and most bigger swing move comes from these Location itself. so Location is the key for Setup and Stop.
And third one is strong Signal bar, Advantage of strong signal bar, even if setups fail it gives ample time to scratch. I use simple rule here, if the setup I enter on strong signal bar and entry bar is weak, I just look to bail, as if my read is right then it should be strong entry bar, if anything else means I am wrong with my read and if wrong then no point to wait for stop to hit. Strong signal bars enhance the Probability.
With experience quality of signal bar can be bit laxed provided overall context & Location in place.
So Once I read the context Right, and define Proper Location & Signal bar, following Setups usually I trade.
First one is First pullback(1Pb) after trend, this is best setup, There too first Deep Pullback, ( first 2-3 Leg Pullback after Trend), having around more than 70% probability. So if one need to focus & master then this is The SETUP. in fact, this one setup if one master one doesn’t need any other thing…more than enough for living. Great Math in terms of Probability & R:R
Second one is First Reversal, or Opening Reversal : (1 Rev) A strong reversal from High, Low or Previous close, or reversal from weak trend move in the Open, easy to read and trade again…. And if works goes big.
Point to note here, in Open be ready for Multiple reversals as how strong the move may appear there are more than 50% of Probability of at least 1-2 Reversals. Second Important point for Reversals, once you read that market is reversed, then look for pullback setups in the new direction only, as Pullbacks are the setups in the direction of trend.
Also, only trend can reverse, so no reversal setups in Trading Ranges.
Third one Is Failed Breakout,(Fbo) either failed break out of High-low or Swings on Trading Range days, here second failed Break out attempt will mostly be swing trade. This setup only in Trading Range Price Action.
Apart from the Setups I Guess couple of things if one follow and do religiously it should work wonder in respective of the system. First having the habit of drawing Trend Lines, and base most of the trading decision at Trendline, this itself will enhance Probability, as Trend Line to my understanding is most dynamic, easy and potent trading tool in respective of trading Style. Second counting the Legs, Either in Trend or Trading Range… Counting Legs, and anchoring trades based on it will solve dual purpose , First it will provide best setups to trade, along with work as filter to avoid many bad trades For example to avoid fresh entries or tightening the stop after 3-4 Legs in the given move.
Last the setups should to easy to read and trade in real time , as What I have experienced most big trades comes from most simple setups, and I use simple heuristic here, if any setup that needed effort to read, will not work or not go big. Best Setups mostly present itself. So just focus on couple of Pet Setups ,that should be easy to read real time, and just trade those only to start with. Idea is to have minimal moving parts or discretion, or friction real time. And once in trade, trade management should be mechanical based on the pre defined math and no discretion here, let the math works, in respective of the outcome on individual trades. Though easier said than done, but slowly mind will accept it.
I guess above mention points are central for any trading system.
Below is the Generic Market structure for Trading Open.
1. The opening bar
2. The opening range
3. Breakout and possible reversal of the opening range
4. The AM trend
5. Lunch consolidation
6. Breakout from lunch consolidation
7. The PM trend


All the Best.
Hi Rajesh Bro
Your this post was so informative.You were to share more your thoughts like this.It helped a lot.
Looking forward for remaining part of it.
Thanks
 

niftytaurus

Well-Known Member
Hi Rajesh Bro
Your this post was so informative.You were to share more your thoughts like this.It helped a lot.
Looking forward for remaining part of it.
Thanks
Hi
Please share something about Exit also
As you follow Albrook method, so you take entry on some signal candle.
So I have some queries related to EXIT?
a) Where is initial SL ? On some candle high/low or Swing high/ low ?
b) Do you put TSL on some candle high/low or some swing high/low?
c) Or If it is Predecided R:R target? how do we decide that shall we out after 1:2, or 1:3 or more?
d) how do you trade management objectively?

Sorry for asking so many questions.But making EXIT mechanical & objective is still my trading problem.what approach towards exiting will help when we trade some PA method?
thanks
 

rajesh.singh

Well-Known Member
Hi
Please share something about Exit also
As you follow Albrook method, so you take entry on some signal candle.
So I have some queries related to EXIT?
a) Where is initial SL ? On some candle high/low or Swing high/ low ?
b) Do you put TSL on some candle high/low or some swing high/low?
c) Or If it is Predecided R:R target? how do we decide that shall we out after 1:2, or 1:3 or more?
d) how do you trade management objectively?

Sorry for asking so many questions.But making EXIT mechanical & objective is still my trading problem.what approach towards exiting will help when we trade some PA method?
thanks
Entry & stop always beyond Signal bar, order type always SL-M. I exit in 3 Parts, 25% at 2R, 50% AT 4R, remaning 25% as Per Price Action, after first exit my stop goes to either at breakeven or beyond entry bar if entry bar is strong. If entry bar & followup bar is weak mostly I try to scratch or exit at least 50% depending upon Price Action, else usually no management, unless strong opposite side setup appears & trigger. R:R always on the basis of initial risk not the actual risk. Most of the time my initial risk in the range of 50-60 points, except open, where risk many time bit higher, so does the reward...
Hope this help.
 

VJAY

Well-Known Member
One can use these open information with their ongoing method...It will give more confident in your entries......New traders can use teaching/posts of rajeshji to start with one setup ...it will works as its have proper logic of PA....
For ORB...use simple rules for...scrip selection .entry creteria and trade management...even EOD exit is works...but you have to be ready for DD in simple methods...as we hardly use aggressive trade managements...also scrip limit also important otherwise ou can see execution problems too :)
 

Zerodha – Open Paperless Account

Open online account with Zerodha. Free delivery trading and Max Rs 20 for Intraday, F&O, Currency and Commodity Trading. Intraday High leverage with MIS, CO and BO.

Name:Phone:
Email:City:
State:
Are you a day trader?