30m 20 sma

DSM

Well-Known Member
#1
Why this thread? Though I am tracking Nifty and BankNifty basis 30M Supertrend in a separate thread, http://www.traderji.com/general-tra...supertrend-nifty-bank-nifty-5.html#post889147 this thread is just a small attempt on my part to help traders to gain insight into simple trading techniques that can WIN without trying to be smart or outsmarting the market and WITHOUT using complicated analysis or indicators.

Though this is not my focus, Will post and update this thread from time to time. Any questions, I will try to answer.

What's required to trade 30M 20SMA?
Take a trade with the trend. Keep max SL of 20 points.
To trade overnight or not, is your choice. (Why fear Gap.? It can work to your advantage or against you. Over the long run, both should either be neutral - the market has nothing against you. But rather as you are trading with the trend, you should be in positive. This assumption needs to be verified)

The rules?
1. Long after 20M SMA turns green and the 30M price bar is above the SMA.
2. Short after 20 SMA turns red and the 30M price is below the SMA.
3. SL rule : Max SL 20 points. Wait for next reversal signal.

Chart of Nifty attached with notes.
Trade 1 +54
Trade 2 + 9
Trade 3 - 10
Trade 4 + 88
Total Trades 4 / Wins 3 / Loss 1 / Draw 0 :) :) :)
Total Win : 151 points Total Loss : 10 points Net Win 141 points Over 8 days, with single lot.

What's required is discipline and patience. Ofcourse besides following the system and doing proper money management.

Have posted basis my understanding as an insight to study simple systems, but this is no Holy Grail. Trade basis your understanding and analysis.

 

avny

Well-Known Member
#2
good initiative DSM

one suggestion,include one more indicator and use them in confluence

for ex, use stochstic

initiate trade as stoch is reversed from OB/OS zone and price is closed above/below the 20 SMA

u may avoid some whipsaw

will post a chart as time permits later in the day

thanks
 

DSM

Well-Known Member
#3
Thanks Avny. Please post your charts, will get some additional insight. Am posting chart studies since so that it can provide an insight into how stocks run up quickly, not giving an opportunity to trades who think to enter. (Had posted my friends observation on the same in Market & After hours thread) Unfortunately while we require a simple system to understand the trend, many traders fear to enter thinking the market has run up. Why fear, when you have SL in place? Assuming even if we are wrong 50% of the time, the RR ratio is much, much favourable.

The idea is :

To follow a system with discipline.
To trade with minimum analysis.
To trade without thinking.
To trade with strict SL.
To not fear the markets - SL 40/50 for BankNifty, SL 20/25 for Nifty.
To remove subjective entries and exits.
To inculcate rule following.
To have patience to wait out of the system, and not get chopped out in a flat market.

The trade is in direction of the trend, so mostly it should be safe. Additional insights can be obtained as we go along and get feedback and observations from members. The best part is we do not think what the market will do - but just go along with the FLOW.

My 2C

good initiative DSM

one suggestion,include one more indicator and use them in confluence

for ex, use stochstic

initiate trade as stoch is reversed from OB/OS zone and price is closed above/below the 20 SMA

u may avoid some whipsaw

will post a chart as time permits later in the day

thanks
 

rkkarnani

Well-Known Member
#4
good initiative DSM

one suggestion,include one more indicator and use them in confluence

for ex, use stochstic

initiate trade as stoch is reversed from OB/OS zone and price is closed above/below the 20 SMA

u may avoid some whipsaw

will post a chart as time permits later in the day

thanks
Dont mean to offend or argue, however I differ from this suggestion for "this" thread !
The very purpose is defeated.... DSM wrote in his "opening" :

WITHOUT using complicated analysis or indicators.
So no harm in using the very simple SMA cross with MA moving in the direction of the trade.
This suggestion can surely be tried and can improve the results, but that can be or should be the subject of some other thread 'preferably' !
 

whisky

Well-Known Member
#5
I agree with rkkarnani, the subject, objective & the process is complete mismatch though the idea is good.
 

DSM

Well-Known Member
#6
RKK Sir,

Your thinking and mine is on the same page, and having seen it all, can only come to the conclusion that trading simple is better. Having said that I presume Avni is trying to give us another insight, and as the purpose of the thread is being open to ideas. Let's consider what Avni can bring to the table. If it is simple and helpful at the same time, we can use it as 30M 20 SMA - Modified, and compare results.

But as of now for most part, let us prove the validity of the 20SMA system till 31st Dec., explore and get some insights.

AM OPEN to maintaining another XL tracker for this system as well. We can then compare AAS and 30M20SMA or 30M20SMA Modified and see what is the best way and what we learn with live tracking of these systems.

So will make another XL tracker for this system as well. For better comparison should we go with yesterday's signal as given so that entries on both systems are matched? If yes, the signal entry for Nifty was signaled at 6,138 for BankNifty @ 10,880


Dont mean to offend or argue, however I differ from this suggestion for "this" thread !
The very purpose is defeated.... DSM wrote in his "opening" :


So no harm in using the very simple SMA cross with MA moving in the direction of the trade.
This suggestion can surely be tried and can improve the results, but that can be or should be the subject of some other thread 'preferably' !
 

avny

Well-Known Member
#7
Dont mean to offend or argue, however I differ from this suggestion for "this" thread !
The very purpose is defeated.... DSM wrote in his "opening" :


So no harm in using the very simple SMA cross with MA moving in the direction of the trade.
This suggestion can surely be tried and can improve the results, but that can be or should be the subject of some other thread 'preferably' !
no offence taken dear rk

we all are here to learn and share

using a single indicator is prone to give more whipsaw

that is my understanding,

please carry on with the good work

thanks
 
#8
Hi

A trader starting with a simple system, trying to optimize the performance, usually starts making it more and more complicated :D

In the above system without introducing a new indicator we can make it quite complex so much so that the number of choices becomes so high,
resulting in trader freezing up at execution . . . :)

For e.g. let us consider the degrees of variability . . .

1. Play with the MA Length
2. Instead of just the close above/below let the complete bar clear the MA
3. Instead of MA of close lets introduce the MA of H/L for Long/Short
4. Play with various combinations of Stop Loss / Profit Stop Values

Now do all the above with different types of MAs :D

Of course, if someone can write an AFL for all of it then testing everything becomes so much easy . . . soooooo easy to the extend of the original idea becoming useless.

We all talk about KISS but when it comes to trading . . . . some how our mind tricks our-self into thinking that KISS = more complex the better :thumb:

When I write code for others, many times I wonder if I am really helping them out or just it ends in making them more confused . . .

Anyway, I have faith in DSM that he can steer around his followers on this thread in-spite of the multiple options available and focus on trading the markets . . .

For those who like to test, here's the code with 4 different trading logic's and variable length, and Stops with optimizer . . .


Code:
Len = Optimize("LENGTH",Param("LENGTH",5,2,95,1),5,90,5);
e = MA(C,Len); eH = MA(H,Len); eL = MA(L,Len);
C15 = IIf(e > Ref(e,-1),colorBlueGrey,colorRed);
Plot(e,"MA-C",C15,styleThick); Plot(eH,"MA-H", C15, styleDashed); Plot(eL,"MA-L",C15,styleDashed);
Cond = 1; 
Cond = Optimize("Condition",Param("Condition",1,1,4,1),1,4,1); // Choose Trading Logic
     if (Cond==1) {Buy = e > Ref(e,-1) AND C > e;	Sell = e < Ref(e,-1) AND C < e;}
else if (Cond==2) {Buy = e > Ref(e,-1) AND L > e;	Sell = e < Ref(e,-1) AND H < e;}
else if (Cond==3) {Buy = e > Ref(e,-1) AND C > eH;	Sell =	e < Ref(e,-1) AND C < eL;}
else if (Cond==4) {Buy = e > Ref(e,-1) AND L > eH;	Sell =	e < Ref(e,-1) AND H < eL;}
Buy=ExRem(Buy,Sell); Sell=ExRem(Sell,Buy); Short=Sell; Cover=Buy;
PlotShapes(Buy+2*Sell,colorWhite,0,IIf(Buy,L,H)); SetPositionSize(100,4);
//ApplyStop(stopTypeLoss,  stopModePoint,Optimize("StopLoss",Param("StopLoss",20,10,100,10),10,60,10));
//ApplyStop(stopTypeProfit,stopModePoint,Optimize("Profit",  Param("Profit",200,40,500,10),50,500,50));
Last few months on 30 Mins, MA 5-10 seem to perform better,
trading logic 2 & 3 do better with smaller values of Length and
Logic 1 does better with higher values of Length

Cheers

:) Happy
 
Last edited:

umeshmandal

Well-Known Member
#9
RKK Sir,

Your thinking and mine is on the same page, and having seen it all, can only come to the conclusion that trading simple is better. Having said that I presume Avni is trying to give us another insight, and as the purpose of the thread is being open to ideas. Let's consider what Avni can bring to the table. If it is simple and helpful at the same time, we can use it as 30M 20 SMA - Modified, and compare results.

But as of now for most part, let us prove the validity of the 20SMA system till 31st Dec., explore and get some insights.

AM OPEN to maintaining another XL tracker for this system as well. We can then compare AAS and 30M20SMA or 30M20SMA Modified and see what is the best way and what we learn with live tracking of these systems.

So will make another XL tracker for this system as well. For better comparison should we go with yesterday's signal as given so that entries on both systems are matched? If yes, the signal entry for Nifty was signaled at 6,138 for BankNifty @ 10,880
I am sure Avni has all the good intention to give some positive input, but I still feel that there are N threads here trying to improve the results with additional indicators, so let us try to keep it simple, atleast for the starters.... if we find over a period that this simple strategy is not working... well then we would need people like Avni to give their input for improvement.
 

whisky

Well-Known Member
#10
Hi

A trader starting with a simple system, trying to optimize the performance, usually starts making it more and more complicated :D


We all talk about KISS but when it comes to trading . . . . some how our mind tricks our-self into thinking that KISS = more complex the better :thumb:

Well said, Happy Bro. In objective of becoming Imran Hashmi (Kiss approach) we end-up back to Shahrukh Khan (Ra-One approach).:thumb:
 

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