All You Need For DayTrading

#92


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hi as i can see there are two price point target 2nd one is below and says midpoint and forward two more target points are given can u please tell me wat is the use of 2nd one and which shoul be consider for target points..i'm little confused
 

ajeetsingh

Well-Known Member
#93


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hi as i can see there are two price point target 2nd one is below and says midpoint and forward two more target points are given can u please tell me wat is the use of 2nd one and which shoul be consider for target points..i'm little confused
dont consider midpoints and its targets
 

ajeetsingh

Well-Known Member
#94
Dual Time Frame Momentum Strategy
By: SwingKing

Tools Candlestick/Bar Chart, Stochastic (8,3,3) Daily and Stochastic (8,3,3) Weekly

Trade Setup This setup was made popular by Robert Miner. The basis of this setup is to use momentum of 2 time frames to get into trades. Though Robert Miner also showed how to use E-wave and fibonacci with this setup, we will essentially stick only with the basic dual direction momentum setup.

Trading the Setup - Switch to the daily chart mode to use this setup. Below the main price window, you must have Stochastic (8,3,3) daily time frame and Stochastic (8,3,3) weekly time frame. It is absolutely essential to have both the stochastic windows (one for daily time frame and other for weekly time frame) on the same time. We enter the trade when the Weekly stochastic has crossed over in the oversold range (usually should have crossed around the 20-30 range) and is pointing up. We then pay attention to the daily stochastic and then buy when the daily stochastic crosses on the same mentioned range. When the daily crossover happens, the weekly stochastic should not be in the overbought range. Best signals in this setup occur when both the weekly stochastic and daily stochastic cross together. One such example, in the case of DLF has been explained below.

Target - Continue to hold the stock till the daily stochastic indicator does not signal a typical sell signal (that is, bearish crossover).

Stoploss - Stop loss in this strategy is fairly simple. Either this strategy works or it fails. Thus whenever the signal comes, do not take loss of more than 3% on the trade or keep stop loss of previous swing low. This strategy has a success rate of about 60%.

Note - This is not an investment strategy. Hence, do not continue holding the stock. This is pure momentum play. Buy it and exit once you get good gains and when the sell signal emerges. For better understanding I have cherry picked this example. Like all the strategies, even this is fallible.

Time Frames - You have to pick out proper pairs to execute this strategy. Here I have used Daily - Weekly pairs as I don't believe too much in shorter time frame trades. You can experiment by using 30 Min - 5 Hour pair or 5 Min - 30 Min pair. But bear in mind that there will be a lot many false signals as you continue to shorten the time frame.


 

ajeetsingh

Well-Known Member
#95
Swing System for Nifty and Bank Nifty
By: SwingKing


System Trading

Most of the traders who (un)intentionally develop trading systems have absolutely no idea of what they are doing. In other words, they are unaware of their systems risk, rewards, market suitability and other attributes which are absolutely essential for the systems to work. Unfortunately, most of the system developers intend to develop one universal system for all market types. For those who don't know, markets can be divided into broadly three categories; Bull, Sideways and Bear. Furthermore, markets can be sub divided into Volatile Bull, Volatile Sideways, Volatile Bear, Low volatile Bull, Low Volatile sideways and Low volatile Bear market. So essentially, we are dealing with 6 varied market types. How can there be one system which copes up with all these different market scenarios? The answer is, It cannot . A single Long term trading system can incorporate all these market types within itself, but a Swing Trading system cannot. Every time you start doubting what I have written here, ask yourself this. "If one short term system is suitable for all markets, then why aren't fund managers simply using that system? Why are they sitting behind their desks, trying to find the correct approach in the current market?" If you ask this question with complete honesty and objectivity, you will get the desired answer. If you still wish to stay in self denial, then its completely upto you to deal with what lies ahead. Keeping this in mind, we move to our objective of designing a simple system for Low Volatile Bull markets which will ensure we catch significant swing up moves and also ensure that we keep out of high volatile (Days/Scenarios).

Objectives

1) Building a Swing System for Low Volatile Bull markets which catches significant amount of swing up trends and leads to significantly lower draw downs.

2) Protection of capital due to increase in volatility. During periods of increase volatility, we intend to be out of the market.

3) Prevents us from Over trading. That is, keeps us in the market for fewer number of days.

Approach

Based on the objectives 1,2 & 3 we intend to use a technique which in itself can be used for short term trend following and can be used to incorporate the inherent volatility in the market. For this very reason, we will be using Bollinger Bands for swing trading.

Bollinger Bands are volatility bands placed above and below a moving average. Volatility is based on the standard deviation, which changes a volatility increase and decreases. One of the other great advantages of Bollinger bands is that they adapt dynamically to price expanding and contracting as volatility increases and decreases. Therefore, the bands naturally widen and narrow in sync with price action, creating a very accurate trending envelope. Bollinger Bands consist of a middle band with two outer bands. The middle band is a simple moving average that is usually set at 20 periods. A simple moving average is used because a simple moving average is also used in the standard deviation formula. The look-back period for the standard deviation is the same as for the simple moving average. The outer bands are usually set 2 standard deviations above and below the middle band. Settings can be adjusted to suit the characteristics of particular securities or trading styles.

Since our trading style is to have enough trades, to protect our capital by getting out on slight increased volatility and to keep a check on draw downs, we will use the Standard Upper Bollinger Band with average of 20, but will reduce the standard volatility to as low as 0.5. There are mainly two ways to use Bollinger bands. One is to Buy at lower band and sell at higher band (Side ways market) and other is to buy at upper band and remain in trades till the reversal comes (Trending market). Since we are aiming for Bull markets, we will use the latter approach. So essentially, when we identify a Low Volatility Bull Market, we will simply go long every time the prices close above the 20 period Bollinger Band with St deviation 0.5 and will exit if the price closes below the same.


System Statistics

I don't intend to self appraise this system and hence will not like to write the % profit, gross profit, draw down etc. Moreover, Profit and draw downs are directly proportionate to how aggressively one trades and hence it will differ for each trader. However, I will give some statistics which are more useful.

Total number of trades from 1995 are around 200. Out of which only 38% trades are winners. Average profit/loss % is 1.32. Standard deviation of the same is 4.9%. Average profit % is 6% and Average loss % is 1.33% and Profit factor is 3.38. Time spent in markets is at 53%. That is, 47% of time we remain out of the markets and hence whatever we make in profits is by staying in the market for only 53% of entire time. Rupee value calculated using lot size 100 of Average winner is Rs. 36,000 and Average loss is Rs. 8000. Rupee value of Average trade is Rs. 7950

Word of Caution

Most of you who have interacted with me know that I am not a systems trader. I had got many request for posting some system and hence I am doing the same. In no way is this system holy grail. Also, use, understand and test this system thoroughly before even trying to place bets according to this.

This system is only suitable for Low volatile Bull markets and will fail miserably in other market types. Please do not try to use this system in any other market type. If you do so, kindly modify based on your understanding. Lot of modifications can be undertaken and hence do it if you understand the same.

Contracts to be traded

Nifty and Bank Nifty.

For stock futures, this needs to be modified. I have not researched on the same and hence cannot advise on it.


Modification

I don't like spoon feeding any trader and hence this system is just a basic system which needs to be adapted to one's own needs. On the whole, anyone who trades this system in the concerned market type, should get good gains. But the one who understands this in or out, will know how to modify this system to take it to a completely different level.

Please understand, due to time constraints, I would not be justifying/clarifying any system statistic related doubts. This is mainly due to two reasons,

1) I have mentioned earlier that results are based on my sizing methods, risk profile and hence can vary according to what you chose.

2) System testing is itself a different ball game. Less than 5% of actual traders know how to test systems. It is not as simple as what Metastock/Amibroker dishes out. Hence, any genuine system related query would be answered. Rest I will choose not to comment on as that would require detail system analysis skills to understand.

Doubts related to system methodology are always encouraged.


AFL
I am not an expert in writing AFL's but I have provided the basic afl which is required to see how this strategy works. Anyone who is an expert in designing AFL's can modify this AFL and post it here. Typical modifications would include, telling the trader whether the position is on Buy, Buy hold, when to add the next lot and when to exit the lot etc. Similar to some thing what Anant has done for his positional system.


Code:
_SECTION_BEGIN("Price");
SetChartOptions(0,chartShowArrows|chartShowDates);
_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) Vol " +WriteVal( V, 1.0 ) +" {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 )) ));
Plot( C, "Close", ParamColor("Color", colorBlack ), styleNoTitle | ParamStyle("Style") | GetPriceStyle() ); 
if( ParamToggle("Tooltip shows", "All Values|Only Prices" ) )
{
 ToolTip=StrFormat("Open: %g\nHigh:  %g\nLow:   %g\nClose:  %g (%.1f%%)\nVolume: "+NumToStr( V, 1 ), O, H, L, C, SelectedValue( ROC( C, 1 )));
}
_SECTION_END();

Buy = Close > BBandTop(Close,20,0.5);
Sell =Close <  BBandTop(Close,20,0.5);

Buy = ExRem(Buy,Sell);
Sell = ExRem(Sell,Buy);

shape = Buy * shapeUpArrow + Sell * shapeDownArrow;


PlotShapes( shape, IIf( Buy, colorGreen, colorRed ), 0, IIf( Buy, Low, High ) );
 

MANISH_DAMANI

Well-Known Member
#97
hi,

Can you please be kind enough to send or upload "nse volatility calculator" shrividhya_123 at yahoo dot com

Regards....vidhya
Respected sir have you done srividya sidhi kya? Because this is one sidhhi in dus mahavidhya.:):thumb:
 

ajeetsingh

Well-Known Member
#98
RECTANGULAR PATTERN ON INTRADAY BASIS
By: SwingKing


This is the "heart" of my day trading. And I hope it will benefit all.

Tools Candlestick/Bar Chart (5 Minutes), MACD Oscillator with standard settings, Support and Resistance levels on 5 Minute chart

Trade Setup The basics of this setup is very easy to understand. All you need to do is monitor selective stocks (high beta high volume) or the Index. The pattern to look out is usually a horizontal range in which the particular entity trades and then gives a breakout in either direction. This pattern is extremely effective and has occurred nearly 70 times in the past 11 months on Nifty. On an average one can find at least 3-5 trading days in a month where this pattern forms. The average points to capture on one particular move are about 20-60. These figures on based on Nifty analysis. However, with 50 high beta futures stock, this pattern is bound to occur in many stocks on daily basis. Top 48 beta stocks exhibit this pattern atleast 1-2 times. So on different days you might get different stocks exhibiting this pattern.

Buy Setup A typical buy setup occurs when the entity breaks out on the upside after trading in a horizontal range for most of the day. Buy at the closing of the breakout candle and keep a stop loss at the low of the previous candle. MACD slope in this setup should largely be up. The risk reward ratio of this setup is extremely rewarding. Prior to the breakout ideally Nifty should have traded in the range of 25-35 points.

Sell Setup A typical sell setup occurs when the entity breaks out on the downside after trading in a horizontal range for most of the day. Short at the closing of the breakout candle and keep a stop loss at the high of the previous candle. MACD slope in this setup should largely be down. The risk reward ratio of this setup is extremely rewarding. Prior to the breakout ideally Nifty should have traded in the range of 25-35 points.

Important Notes Look at the slope of MACD when you enter the trade. Also, always take a note of where prices are trading with respect to their support and resistance.

Have patience and you will see this pattern occurring regularly.


I am posting two out of many examples I have for NIFTY alone. If you want to see this for individual stocks then let me know.



 

ajeetsingh

Well-Known Member
#99
Ascending Triangle on 5 - Min Chart
By: SwingKing


Tools Candlestick/Bar Chart and Volume(Color Coded). Since 5-min chart is extremely small time frame, I prefer not to use any oscillator or indicator.

Trade Setup The basics of this setup is very easy to understand. All you need to do is monitor selective stocks (futures based stocks) or the Index. The pattern to look out is usually a horizontal range on the top and higher lows on the bottom. This pattern is extremely effective and provides with good risk/reward ratio on 5-min chart. Essentially can be used as an effective swing trade strategy.Those with sizable cash in portfolios can choose futures stocks for this pattern (leverage advantage). I'll use a very recent example to demonstrate the use of the pattern.



Time Validity - I trade this pattern only on 5-Min chart. The reason behind this is based on my own research. Ascending triangles which occur on daily or weekly charts either dont complete fully or give false breakouts. On analyzing 5-min charts I found that these patterns are highly effective on this time frame.

When does it occur - This pattern can be found during consolidations when a stock pauses before moving higher. Higher bottoms in this pattern indicates bullish momentum being built up.

How to trade it - Refer to the chart below. What we see is that Aditya Birla Nuovo has recently finished a ascending triangle pattern. It formed a nice horizontal base (A,B and C) around 895 levels with it constantly forming higher bottoms (1,2,3,4,5,6,7). The stock eventually broke out from these levels and is trading at 909 currently. The ideal setup would be to buy on breakout only when there is huge increase in volume activity around breakout levels (refer chart).

Target - Add the range of the ascending triangle to the breaching level. In this case it would be the vertical distance between point 1 and A (roughly about 35 points).

STOPLOSS - Use point 7 as stoploss levels. We would ideally want the triangle to fall out completely before deciding that it is a false one.

Important Points - Along with the standard points mentioned above, there are a few points I would like to share in order to judge the strength of the pattern.

1) Strength of Horizontal Top Line - Ideally there should be atleast 2-4 points of contact made with the horizontal top line. In this case we have had 3 point of contacts marked as A, B and C.

2)Strength of Trendline - Number of point of contacts made with the trendline determine the strength of it. In our case we have 7 point of contact. This is brilliant. Ideally I would like to see 3-4 point of contact.

3) Strength of the points (A to C and 1 to 7) - We need to check whether these points are of any use or not. Plotting points is not difficult. However testing them is difficult and important. A simple way to do this is to monitor the volume activity. Look below each major point (1 to 7) how volume acivity picks up as soon as the price reaches the trendline. High volume at these points resemble force (demand) and hence make these points important. I have circled the volume activity underneath each point.

4) Strength of Pattern - When the above mentioned points are in place, then the only thing left to verify is the time of the breakout. Ideally the pattern must breakout before the lines converge. At point 7 the pattern is 70-75% complete and hence this is the right time of breakout.

Ultimately always remember that no pattern is fool proof. In this particular case we have found a very healthy pattern and we can just hope this blossoms into profit.


 

ajeetsingh

Well-Known Member
15- Min Breakout Setup
By: Swingking


Tools Candlestick/Bar Chart

Trade Setup This pattern is very similar to the horizontal intraday pattern discussed earlier. The difference lies in the time frame (15-Min). Since the pattern forms over 3-4 days, it is more reliable than the intraday setup. The pattern to look out is usually a horizontal range in which the particular entity trades and then gives a breakout in either direction. It is not necessary to select high beta stocks in this case. The pattern completes (breakouts) on a single day and the position for the same can be closed out as the day progresses.

Time Validity - Time validity of this pattern is extremely effective on 15- Minute charts. This range is built up typically every month on stocks which are seeing a consolidation or range movement. Once you get an eye for this pattern, you will see it occurring on a regular basis.


How to trade it - Refer to the chart below. ABAN gets in a range for 3-4 days continously. Then it eventually breaks out on huge volumes. This is a typical setup and the stock should be bought at the breakout. I have not used any indicator on purpose as there is no need to complicate the pattern.


Target - I dont believe in predicting the target. Hence, what I do is I square off my position once the stock moves 1-2%. For those who believe in targets, you can add the range of the pattern to the breakout point. The stock usually goes to that level. In ABAN's case, the range is 33Rs and it breaksout at 1186. Hence add 33 Rs to 1186 and that should be your target.

STOPLOSS - I would prefer not to refer to stop loss levels as every trader is different in having his own rules of money management. Please use your own rules for managing equity. I split the range of the pattern into half and the number of points I get is my stoploss.

Usage - This pattern is effective 15-Min chart. Every now and then you will find stocks which exhibit this pattern. I usually look at all the stocks that are in the futures segment.
 

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