From My Trading system: 1-3 Day Trades

[prabhsingh]

Pankaj

Thanks for your message.

My system has NSE EOD data since May 1 2007. I do back test my algorithms. Nature of market changes from time to time. My approach is not indicator based and neither it runs same set of algorithms for every stock. Only common theme one can say is mostly going with the trend. Though occasionally I do have counter trend trades.

arvind

Hi Arvind,

Kindly can you upload somewhere NSE EOD SPOT somewhere from May,2007 till 31st MArch,2013.

 

[arvind61]

@PrabhSing

My database though built based on NSE daownloads uses a proprietary binary file system which is tailored for the application for speed and all the bonuses and splits etc. So I wont be able to help you on that.

I guess whatever EOD data is easy to build as per your requirement from NSE or yahoo finance etc.

 

[arvind61]

NIFTY has broken crucial 200 Day DMA and is now just placed above 50 week DMA. Tomorrow being Friday this support will work for sometime at least.

HCLTech was a sitting duck 2 days back hope some people traded the break down of double inside bar at the double top. It should now test its 50 day DMA at 730.

Ranbaxy range has been narrowing and has made an inside day today have feeling that below 444 it can crack few rupees very quickly.

Other sell on the rise ideas are -

short Indian Hotel 55.8-56.5 stop 57
short zeel 212.5 -213 stop 215

If today's low is not breached in first hour then worth buying some NIFTY calls
with todays low being the stop loss.

good luck

 

[arvind61]

NIFTY managed to keep its nose above 50 Week DMA. I was tempted to buy some NIFTY calls at the end but just could not pull the trigger. Double top zone of 5400 on weekly charts is close by. Just another day of weakness and we may be there.

Ranbaxy did slide quickly from break of 444 towards 441 in seconds Outside bottom of two inside bars. Quickly squired off once it stopped the slide. As short term trader it is important to walk away with small profits.

These inside bars and double inside bars at critical locations offer nice hit and run opportunities. I guess lot of programmed softwares look for this pattern and play it. It also provides tight stop loss.

There was another inside bar at NTPC yesterday which exploded downwards. NTPC generally keeps very narrow range so I did not mention it. Its location should not have been missed. In last two months it has closed above 20 Day DMA just twice. So it was obvious candidate for slide, but I missed it.

Shall run my system over the weekend and report .

Have a great weekend

 

[arvind61]

Where is the smart money moving??

There has been lot of efforts made by technician to detect from trading data where is the smart money and/or Insider money is moving? There are some indicators which are based on price moved on negative volume day. It was a thought process that when volumes are down dumb traders are not in the market so the move is indicative of smart money. Then it may not be reflected in cash data but in derivative data. Lot of us try to analyse FII activity in derivatives. There also if they sell in futures they would build counter positions in options for protection. Its too much muddy water. I am still researching it. If anyone has any opinion on it I would love to know it.

If we look any trending stock it would be so obvious that how can anyone lose money trading in those stocks. Yet we all lose money. I believe its pure psychology. Once we put money on in any trade the fear takes over. On little bounce against the trend we feel now this time its going turn the corner and we give up only to see the trade back in our direction when we had exited it.

I feel there are ways to deal with it. We need to first take a position where stop loss does not affect a great deal. For that it is important to enter at a level where stop loss is smaller. If some of you who are following my recommended trades would notice many times my trades don't trigger at all. Even though trading direction is correctly predicted. I write trades which I will take and entry is very conservative.

If we are trading in the direction of the trend and our entry is proper and our potential loss under control so that it does not wreck us mentally there is no reason why cant we make money. Greed has to be controlled. score lot of singles and twos occasional boundary would come.

 

[arvind61]

Here are some Lower top lower bottom formation trades -

watch nifty and trade in nifty direction - prices in cash

short TITAN on rise to 247-249 stop 253
buy biocon 277-278.5 stop 274
buy ongc 310-312 stop 307
short ptc 60.5-61 stop 62

Interesting Inside Bars -

RCOM breakdown of 62 sends it quickly towards 60. Get out ASAP when it stalls Upside breakout slightly unlikely but may happen beyond 66.2

IFCI will fall quickly below 26.9. May give a fake upside breakout first beyond 28.35


good luck use stops

 

[arvind61]

Dealing with Inside Bars

Inside bars set up is one of the important pattern to spot for short term/ day traders. Inside bars are not rare at all. So it is important to know which bars to trade if at all. Location , height and relative heights of the bars are to be examined.

Technically all it implies is nether bull nor bears were in control to push the range either way of yesterday. So a stalemate or a pause. But if you combine this with other features present that can help determine direction.

Few days back I had reported double inside bars at double top location for HCLTECH. There was a greater probability that once it breaks the range with volume there would be some slide.

It is easier if both the bars are of small range. Then break of outside bars can be kept as trigger and other end as stop and reverse trade point. Often times there would be a fake breakout in one direction.

If outside bar is of considerable height and inside bar is of small range then break of inside bar could be traded with near outside bar end as target.

Often times there would be range expended and then the price retreats. What happened with RCOM . It surges past the top of inside bar. Consolidated near top of outside bar broke it and then retreated back. Perhaps DMA50 wall just above prompted profit booking.

IFCI did similar thing on breakdown side.

In both cases the inside bar had much smaller height.

 

[arvind61]

NIFTY nose precariously under 50 week DMA. NIFY itself has made an Inside bar. Which way the cookie crumble?

Short IFCI on rise to 27.5-27.75 Stop 28

Short TataGlobal on stalling at about 135.75 Which is previous top and also DMA50 zone If it trades above let it go..

BHarti and satyam make a bullish 3 bar reversal shall watch that.

HindCopper makes double inside bar just below DMA 20. Worth shorting at 104-105 with tight stop.

TATASTEEL and SAIL are also poised at the bottom with double inside day.

Crompton min Range in 98 days.

Too many inside bars and narrow bars ... just listed a few

seem like a whipsaw day tomorrow try take small profits/loss and out

good luck

 

[arvind61]

So much cam happen in a day. With Narrow range Inside days lined up at NIFTY I was expecting some whipsaw motion. But had no idea which side would happen first and also if there could be reversal of the reversal. Reversal of reversal did not happen.

When it takes only couple of hours to break 2 days stalled range that two of an index one must look at the breakout sceptically. I have no perfect recipe for trading these inside range breakouts but now I don't trade the first one if its happening early in the day.

Other calls had come out quite well. IFCI bounced down exactly from the level. So did Tataglobal and hindustan copper.

I have a hunch that we could go to about 5400-5420 range on Wednesday and then try reclaim 50 week DMA of 5550 by Friday if global markets remain upbeat. The advantage of short term trader is There is not much downside if the trades are managed well. As I had written before in a post the days of investing in India in equities are gone. Once in few years one may be lucky to latch into a stock like Jubilant Food and make money over time.


Once people start losing out on gold and real state then only they will come to invest in equities. With all the black money sloshing around in Gold and real state those days are still far off.

Just look at the list of 'Big Cap' companies - God knows what would have happened to Mid cap small Cap.

Top 20 Gainers of the 6 Month

MCDOWELL-N 52.150547
L&TFH 44.32486
HCLTECH 33.39597
ESSAROIL 30.08264
BAJAJCORP 26.198774
IDEA 26.076693
WIPRO 22.8243
SUNPHARMA 22.126577
PEL 22.053352
ASIANPAINT 18.833633
UBL 17.881191
ADANIPORTS 16.357027
GODREJCP 16.049204
MOTHERSUMI 15.813526
MRF 15.376845
TCS 14.547075
KTKBANK 14.4045515
INFY 13.813197
DRREDDY 13.793002
GLAXO 13.603391

Top 20 Losers of the 6 Month

MMTC -69.161674
HINDCOPPER -61.225277
OPTOCIRCUI -56.72794
IVRCLINFRA -56.32563
HDIL -55.28686
WELCORP -43.97198
ABAN -42.162807
SINTEX -37.773075
ABB -36.67165
VOLTAS -36.658356
ENGINERSIN -36.562435
RPOWER -36.135693
MCX -34.194923
RELINFRA -34.187454
NMDC -34.17486
GVKPIL -33.916084
NATIONALUM -33.75734
SIEMENS -33.23644
LITL -33.227848
RAYMOND -32.77574

 

[arvind61]

Power cuts been terrible. Could not run the system yesterday.

Here are some quick points for the day -

short coalindia on rise to 308-309 stop 312
short bharat forge around 212.5-213 stop 216
buy cipla on dip 385-386 stop 382

PTC is a case of narrow range breakout/breakdown above 62 and below 60.5

ZEEL has shown resilience in falling market yesterday. Might have inside range breakout from 206.6

good luck