Day Trading Strategy which actually works

[technical2016]

I am new member in the forum. This is my first post. I hope you find this post helpful.

I am giving one simple day trading strategy which actually works. I have achieved success in 8 out of 10 trades. This is not a new strategy but I have added few filters for increasing success ratio.

The best part of this intraday trading strategy is you don't have to be in front of the system all the time. Only 15-20 minutes time is required to do analysis.

Start doing analysis at 10 am. Check the overall Nifty trend up or down.
When Nifty in uptrend find stocks which open = today's low. This is a powerful indication that today's buyer are fully in action and sellers are unable to break the open price. Many software’s like sharekhan allow to export data to Excel. This makes easier to sort the data.

After getting the list of shares do apply below filters to it. (Number 2 filter is my observation).

1) ADX(14) on 5 minutes chart should be above 20 and in rising direction.
2) Positive ADX(14) should be more than 10 points than Negative ADX(14) line.
When Nifty in downtrend then check for short opportunities, open=high.
1) ADX(14) on 5 minutes chart should be above 20 and in rising direction.
2) Negative ADX(14) should be more than 10 points than Positive ADX(14) line.

Stop loss is 10 % of the invested capital.

There is no target. The MIS entry will get squared off by the end of the day.
Before risking your actual money, please do paper trade for minimum 1 week to check this strategy.

 

[goldenedge]

I used ADX before but I have found two serious problems with it. The more I used it, the more I realized that I don't really need it.

In a nutshell: ADX measures the trend strength and momentum of a trend.

1) ADX is a lagging indicator.

A lagging trend indicator is a nightmare. What's the point of using an indicator to find the trend if it lags?

Hunting for breakout candles and trading in their direction is a better solution than using a lagging and complex indicator like ADX. In fact, MACD also does a better job and is simpler.

2) ADX is a mess.

To calculate it's value, you must first find the average true range and then find the value of plus and minus DI's. Then you divide those DI's with the ATR value we know. Then you find the difference between the DI's, smooth the result and display.

Finding the average true range(ATR) itself is a mess. ATR = (previous ATR * 13 + current TR) /14.

So, what's the point of using a complex indicator with a lot of variables?


Now looking at the strategy you mentioned, I smell something - It's too simple to be true. Trading is complex and requires lots of work.

The reason why your strategy works is because it's seasonal and not universal. I mean, it might work right now(because of current market conditions) but I'm pretty sure that it will not work if your time period is over a year.

I will even tell you why it wont work in the long term. Your strategy is a trend hunting one. Based on the research I know, Trend hunting systems are right only around 30% of the time. So your trend system works more than 70% of the time?

This implies only one thing. You're sacrificing a lot of move and capturing the small amount of profit. And you're also lucky because the market conditions favor you.

 

[technical2016]

@ goldenedge Yes, I have also experienced the same issues with ADX indicator.
Can you please suggest any alternative to ADX indicator which can capture strength of the trend?
Also any strategies which will capture all the moves and huge profits?

 

[timepass]

In intraday trades, very often the big move happens in one bar and then it spends 2-3 hours consolidating around it. This makes the indicators go haywire. Something else is needed along with the indicators to tell you that the move/trend has more legs to go.

 

[TracerBullet]

In intraday trades, very often the big move happens in one bar and then it spends 2-3 hours consolidating around it. This makes the indicators go haywire.

You can consider moving to higher timeframe.
If move is possible climax, then probably wait for CT setup to form or look at another scrip

Something else is needed along with the indicators to tell you that the move/trend has more legs to go.

New Momentum H/L in recent history(that is not climax) and a controlled pullback could point to one more leg. See here and here. He has nice book too

Also tp sir i will suggest again, consider reducing your trading size until you are consistently profitable, Why loose money when learning? GL

 

[sumeetsj]

Indicators that are derived from the price will be too erratic in such short time frames. If you want to successfully trade intraday try looking for something that analyses only Price action

 

[doss186]

After lot of mess and puss and trading wrong way many months finally
developed my own Trade Wave System taking bits and pieces of gems from great trading masters. Finally it's giving me decent profits and not touching my emotions anymore. Show here is last Friday (04/11/16) trade in AxisBank.

 

[davincy]

Just two indicator working in day trading for me. that's 50ema and rsi14.

 

[vik_kkl]

well let everyone explain their own convenient methods, but i feel copying here doesn't lead to any success. i am following my own methods here failed most of the time, quieted intra day for ever and very successful in short to medium term positional trading as never before. now i am more relaxed and happy and satisfied when i count my profit.

 

[travi]

well let everyone explain their own convenient methods, but i feel copying here doesn't lead to any success. i am following my own methods here failed most of the time, quieted intra day for ever and very successful in short to medium term positional trading as never before. now i am more relaxed and happy and satisfied when i count my profit.

True, its about individual edge, scalping works as good as swing works. Its just whats best for one.