Day Trading with Pivot Points and MACD Indicator

[veluri1967]

Dear Friends,

I have been learning trading lessons on this forum for the last 1 and a half months.
I decided to start Day Trading with Pivot Points and MACD indicator.
I am starting with a initial capital of Rs.5,000/-.
I have an account with indiabulls and hence am going to use it for trading.
I prefer to use 1 min chart. MACD indicator does not show up until 10:30 in my indiabulls software as there is no backfill facility. So, my trading starts after that only. (I attach intraday chart everyday for easy viewing).

Strategy is very simple as many of you already know.

Draw Pivot Point, S1,S2,S3,R1,R2,R3 lines on the chart. (Thanks to Radha55 for making me to understand Pivots effectively).
Check as the line approaches any of the above line to cross over.
If the price is approaching the line from below, ensure that the MACD is already crossed up. Then take a buy position. (Thanks to many on Technical Analysis Thread for making me to understand MACD).
For sell position reverse is the case.

Exit whenever the price reached your target ie. 0.25 ps to 0.75 ps whichever u feel comfortable.

Book loss only when the price triggers STOP LOSS but not on reversal of MACD.

Position size will be my capital in the account * 10 times leverege.

Target is anywhere between 0.25 ps to 0.75 ps.
Stop Loss is fixed at 0.50 ps.

I am selecting a stock which is priced at Rs.200/- or below and have good volumes.
For example, Hindalco, Ambuja Cem, Idea, Sail.

I am starting the trade from tomorrow. Let us see how my trading account will grow (or diminish).

My request to all friends is not to trade with actual money based on this strategy. You might fall into heavy losses. About me, no worries even if i loose my Rs.5,000/-

thanks

 

[trader.trends]

Velluri
Some thoughts from my side. Since you will be trading stocks of different prices would keeping, targets and stops in % be useful?
How will you pick stocks? Will you make a list of X number of stocks to track and trade only in them when the signal is given?
Keep the investment in each trade a constant. This way you can compare the return and risk of each trade as the investment in each trade is constant.
Example: If investment is kept constant at 5000/- per trade, if the stock is priced at 100/- trade 50, if it priced at 200 trade 25 and so on. Define the amount of investment in each trade in the beginning. Perhaps you will define a consistent exit strategy later.

Maintain an excel sheet to track trades and the strategy tester sheet posted by AW10 in his NR7 thread it is very useful.

Good luck.

TT

 

[veluri1967]

Velluri
Some thoughts from my side. Since you will be trading stocks of different prices would keeping, targets and stops in % be useful?
How will you pick stocks? Will you make a list of X number of stocks to track and trade only in them when the signal is given?
Keep the investment in each trade a constant. This way you can compare the return and risk of each trade as the investment in each trade is constant.
Example: If investment is kept constant at 5000/- per trade, if the stock is priced at 100/- trade 50, if it priced at 200 trade 25 and so on. Define the amount of investment in each trade in the beginning. Perhaps you will define a consistent exit strategy later.

Maintain an excel sheet to track trades and the strategy tester sheet posted by AW10 in his NR7 thread it is very useful.

Good luck.

TT

Thank you.
I will open a maximum of 4 charts on the screen. Mostly the ones I mentioned in my first post.
Draw the Pivot Lines and Plot MACD.
Then go for the stock whichever has given me the earliest signals for trade. (Or with the stock I am comfortable with at that movement).
I will stick to it for the entire day unless for something else.
I am going to take maximum position possible in that particular trade. Suppose I want to take a position in a stock valued at Rs.80/-. My present capital is Rs.50,000/-(including 10 times liverage). Divide Rs.50,000 by 80 which gives 625. Round off to nearest lower figure here it is hundreds ie 600 which is going to be my first position.
No need of excel sheet for now atleast. I will be adding/deducting that days profit/loss to arrive at next days capital. I will also adjust for brokerage charges also.(My brokerage expenses are calculated as 0.137ps per 100).
Thanks for the suggestion. I will implement them if my capital base improves exponentially.

 

[columbus]

Dear Friends,

I have been learning trading lessons on this forum for the last 1 and a half months.
I decided to start Day Trading with Pivot Points and MACD indicator.
I am starting with a initial capital of Rs.5,000/-.
I have an account with indiabulls and hence am going to use it for trading.

I think 5000/- is too meagre.Even 10,000 and 20,000/-
may be of no use.Let the starting capital should not be less
than 50,000/-.Otherwise you find problems with margins which
are a bit difficult to manage with this amount.(Basically I am
talking about Nifty Futures).

 

[veluri1967]

I think 5000/- is too meagre.Even 10,000 and 20,000/-
may be of no use.Let the starting capital should not be less
than 50,000/-.Otherwise you find problems with margins which
are a bit difficult to manage with this amount.(Basically I am
talking about Nifty Futures).

Hi....columbus...
Infact, i didnot expect the attention of members like u with such a seniority at this movement. But it happend. I am very happy for your participation.

I am not going for Nifty Futures. I am just going for stocks ranging below Rs.200/- which are active on NSE and have high volumes like Hindalco, Ambuja Cements, Idea etc.

Thank you.. and Keep correcting me in future for which I am always thankful.

 

[columbus]

Hi....columbus...
Infact, i didnot expect the attention of members like u with such a seniority at this movement. But it happend. I am very happy for your participation.

I am not going for Nifty Futures. I am just going for stocks ranging below Rs.200/- which are active on NSE and have high volumes like Hindalco, Ambuja Cements, Idea etc.

Thank you.. and Keep correcting me in future for which I am always thankful.

Hi veluri,

Less capital and more margin is dangerous than More capital
and less margin money.Do not use all the margin money (exposure)
all the time.
The great thing about Stocks is that you can buy/sell in multiples
of ONEs,but futures are in either multiple of 20 or 50.

 

[munnabhai208]

Dear Friends,

I have been learning trading lessons on this forum for the last 1 and a half months.
I decided to start Day Trading with Pivot Points and MACD indicator.
I am starting with a initial capital of Rs.5,000/-.
I have an account with indiabulls and hence am going to use it for trading.
I prefer to use 1 min chart. MACD indicator does not show up until 10:30 in my indiabulls software as there is no backfill facility. So, my trading starts after that only. (I attach intraday chart everyday for easy viewing).

Strategy is very simple as many of you already know.

Draw Pivot Point, S1,S2,S3,R1,R2,R3 lines on the chart. (Thanks to Radha55 for making me to understand Pivots effectively).
Check as the line approaches any of the above line to cross over.
If the price is approaching the line from below, ensure that the MACD is already crossed up. Then take a buy position. (Thanks to many on Technical Analysis Thread for making me to understand MACD).
For sell position reverse is the case.

Exit whenever the price reached your target ie. 0.25 ps to 0.75 ps whichever u feel comfortable.

Book loss only when the price triggers STOP LOSS but not on reversal of MACD.

Position size will be my capital in the account * 10 times leverege.

Target is anywhere between 0.25 ps to 0.75 ps.
Stop Loss is fixed at 0.50 ps.

I am selecting a stock which is priced at Rs.200/- or below and have good volumes.
For example, Hindalco, Ambuja Cem, Idea, Sail.

I am starting the trade from tomorrow. Let us see how my trading account will grow (or diminish).

My request to all friends is not to trade with actual money based on this strategy. You might fall into heavy losses. About me, no worries even if i loose my Rs.5,000/-

thanks

hi friend,
Good luck for your trade.i am a newbie n still learning TA. i think you and vishal have learn it fast...I lost more than 50k in trading without any knowledge of TA. Then i found TJ in google and learning now.
anyway good luck....and one more thing ...dont forget to post the trade result tomorrow............:thumb:
rgds
muneer

 

[veluri1967]

hi friend,
Good luck for your trade.i am a newbie n still learning TA. i think you and vishal have learn it fast...I lost more than 50k in trading without any knowledge of TA. Then i found TJ in google and learning now.
anyway good luck....and one more thing ...dont forget to post the trade result tomorrow............:thumb:
rgds
muneer

I read somewhere that until and unless we actually trade with actual money we donot get the actual feel of the trading. Hence, this trial with Rs.5000/-. We have not yet mastered the market pulse. We are still learning.

Sure....munnabhai....i will update everyday...about my trades.

 

[veluri1967]

Today i have traded with Ambuja Cements.
pivots are
r3 -93.50
r2 -92.65
r1 - 91.40
pp - 90.55
s1 - 89.30
s2 - 88.45
s3 - 87.20

At about 10:30 the price was approaching S1 line from PP ie downwards, and MACD already crossed down. Hence SHORTED below S1 at 89.25 of 500 shares. The Target of 0.25 ps missed and the price reverted back. STOP LOSS hit at 89.75.

Another opportunity of SHORT came at around 03:00 pm for which i have not gone because indiabulls stalls intraday trading around that time.

Todays loss is 0.50 x 500 + .137 x 500 = 318.50 ps.(Actual figure will be known only when i receive contract note).

My capital is reduced from Rs.5,000 to Rs.4681.50 ps which will be my tomorrow's capital.

 

[AW10]

Veluri,
Just few question..
1) Have u backtested / paper traded this method with ZERO money.. or not.
Or are u testing the strategy with 5000 Rs. marked as donation to market.

2) Today, u have lost 350 rs on 5k account whcih is 7% of capital.. This is bit too much of risk from money mgmt perspective. If you want to ignore it, fine.. Nobody can stop u from that.. cause it is your money. Hope this does not train your mind with wrong trading practice..

My suggestion will be to treat each Rs with same seriousness (that shows our belief/attitude about money..and if that is not right, it is very unlikely that u will be able to make those Crores in this mkt)..

If I were to trade 5k acct, I will go ahead with 1% risk on each trade ..yes that turns out to be 50Rs. Not loose more then 150 rs in a day.. i.e 3% of my acct..
With stock, if I might buy 1 qty.. or 2 qty.. if thats what i can afford in 50Rs of risk.
My intention is not to make 1 lac with 5k..but to learn trading.. So better to learn RIGHT trading, rather then gambling with my money.

I believe stock trading gives u that flexiblity to buy 1/2 stock and still follow all the rules of trading that a professional trader will follow.. No need to run behind that home run in 1months time.. If you continue to take this much of risk, in 4 to 5 loosing days (and it is quite common in the market. We have to be prepared to take upto 20 loosing days in a seq to comeback and fight the next day in the market), you account will be down to half . Moreover it will leave very different mark on your trading psychology which you will have to correct/overwrite later.

One thing that I have learnt after paying huge price to the market - if you cann't reinforce right trading behaviour to your brain, then atleast avoid feeding it with wrong behaviour. This just makes our task lot more tough, when we get awareness of what trading is..
Might seem like gyan at this stage.. but just my experience is telling it.
That doesn't mean that u can't have different experience.. so feel free to do what u DECIDE to do.

hope this helps.. Happy Trading