Let us bet on Nifty Intraday Breakouts

[XRAY27]

Well, we have understood various Breakout bars. It is very personal to different people how to use these bars. My view is that it is better to discard weak breakouts because they are probably just like discarded boats which are on directionless sail.

We are aware that breakouts should have a proper follow through otherwise they are likely to fail. Failure of breakouts through at us an opportunity to play failed breakouts.

We are betting on either side of breakout bars in order to make a killing. So, our set up is the breakout bar, and the entry will be on break of either high or low of breakout bar. Exits are based on the style and appetite of the trader. A scalper can exit on seeing a profit of 6 to 8 points profit. The scalper can expect a high hit rate because of low target. On the contrary, the day trader can exit first lot on seeing a profit of 20 points and trailing the stop depending on pivots formed or 20 points trail whichever the trader is comfortable with on second lot. The hit rate is low of day trader and he makes up his profits on long run. The choice is upto the trader which type of trades he wants to make.

This setup is to see the traders can now not complain of making losses on a fairly long period. The setup is not intended to give windfall profits either.

Sirji,
you added great stuff of volume analysis...i have seen traders of two class/s
one is expert of Breakouts and another is expert of Breakout failures.. they have achieved there level of expertise in there setups...
in my opinon traders have to select his comfort zone BT or BTF..then trading will be easy..(BT:Breakout trader BTF:Break out failure trader)
it does'nt mean that they will not know other topic.... they only trade according to there comfort setup/s

 

[RockyRobust]

Hi,

Most of you are aware that I am a big fan of Pure Price Action breakouts without the use of fancy indicators. Many of you are aware that 5 minutes breakout on Nifty has not given much desired result. The fancy of trading Nifty has made me to think new way of trading breakouts.

I will post subsequently my throughts on Nifty breakout trades. This time I have compromised and started using volumes and MA embedded on volume.

I have not backtested this strategy except to roll out charts randomely to see where the trade succeeded and failed.

Hoping all of your participation to make it tradable profitably.

@ suri ,

This is another good initiative by you . Price Action Trading is the crux. :thumb:

 

[niftytaurus]

Breakout.

1. Let the first three 5 minutes candles close.
2. The bar which breaks either the high or low of these three bars collectively is the breakout bar. It is nothing but break of first 15 min candle high/low by 5 min candle.


Use of Volume

Notice the volume of breakout bar. It should be higher than previous volume bar. If the volume of the breakout bar is higher than MA(20), it is strong breakout. If it is lower than MA(20), it is moderate breakout. No matter whether it is strong or moderate, the condition that volume of breakout bar should be more than previous bar’s volume. If the volume of breakout bar is less than previous bar, it is weak breakout.

Hi
Thanks for this superb method ! I have tested it on last month data. & it works very well..
I have some queries.
If breakout doesnt happen in that 4th 5min candle of day..can we consider any candle which break out the range of 15 min first time in day ..as many times break out doesnt happen on 4 th candle of day...??
Thanks

 

[suri112000]

If breakout doesnt happen in that 4th 5min candle of day..can we consider any candle which break out the range of 15 min first time in day ..as many times break out doesnt happen on 4 th candle of day...??
Thanks

Yes. The breakout need not happen on immediate 4th candle. It can be any candle which breaksout.

 

[niftytaurus]

Breakout.

1. Let the first three 5 minutes candles close.
2. The bar which breaks either the high or low of these three bars collectively is the breakout bar. It is nothing but break of first 15 min candle high/low by 5 min candle.


Use of Volume

Notice the volume of breakout bar. It should be higher than previous volume bar. If the volume of the breakout bar is higher than MA(20), it is strong breakout. If it is lower than MA(20), it is moderate breakout. No matter whether it is strong or moderate, the condition that volume of breakout bar should be more than previous bar’s volume. If the volume of breakout bar is less than previous bar, it is weak breakout.

Thanks for this wonderful method..
does it work on other stocks also..or just in nifty alone?
I will do back test manually..I have just last 1 month data..so can do onl for that period..& inform u
thanks

 

[suri112000]

I used to trade this method a few years back. Even today, this method is as robust as it used to be. It has a high hit rate but RR is not favourable. Finally the high hits makes up for the weak RR. It is very suitable for the traders who cannot make out the technical jungle and want to have a very simple method to trade. Can I call it another method of breakout? You decide.:lol:

Let the first 15 mintues bar of Nifty close. Note down the close of it. Say it is 6269.50. Ignore fraction and round it off to main number ie 6269 (Let this be called "Decider'). Now add 10 points to the Decider which comes to 6279 (Let this number be buy trigger). Now subtract 10 points from the Decider which comes to 6259 (Let this number be sell trigger).

Now, place the orders at buy as well as sell triggers. Let us say buy triggers, the SL will be sell trigger. If sell triggers first, then the SL will be buy trigger.
The target for both buy and sell trades is 10 points. I used to trade only one trade per day with 2 lots. First lot exit at 10 points fixed. Second lot trailing by 20 points.

Here is the backtest report for Feb and Mar series.

Feb 2014

Trading Days : 19
Win days : 18
Loss days : 01
Hit Rate : 94%

Mar 2014(Till last trading day)

Trading Days : 11
Win days : 09
Loss days : 02
Hit Rate : 81%

Backtest it before you leap in.:thumb:

 

[suri112000]