Mini Nifty Intraday - The Redline strategy

[rkkarnani]

Trading rules as understood by me :

01. RED LINE is simply previous days Close!!!
02. Go long or short at 0.1% above or below the Red Lines Level. Say Previous days close was at 5000 so we have the following for present days trades :

Enter Long above 5000+0.1%=5005
Entry SL at 5000 less 0.2% = 4990
Exit 40% at 5005+20=5025 SL remains at 4990
Exit 20% at 5005+40=5045 SL moved to 5025
Exit 20% at 5005+60=5065 SL remains at 5025
Exit 20% at close or SL


Enter Short Below 5000 less 0.1% = 4995
Entry SL at 5000+0.2%=5010
Exit 40% at 4995 less 20=4975 SL remains at 5010
Exit 20% at 4995 less 40=4955 SL moved to 4975
Exit 20% at 4995 less 60=4935 SL remains at 4975
Exit 20% at close or SL


Mini futures being used so that the Position size is not too big even when we trade the minimum required 5 Lots. One can trade the Nifty futres with minimum 5 lots.

We need to address the rules for the following :

Market opens with a gap above or below the Previous days close and keeps on going in that direction.
If it retraces back to the Previous days close, we may get a comfortable entry. On 8th October mkt opened above previous days close and drifted down and breached the Redl Line on the down side but did not triger Short. It moved back up . Here we take a long trade at our Level as per pur Rules. This portion is visible in the chart posted in Previous post.
Any other suggestion!!!
To keep it simple, the best is to trade ONLY when it comes back to our original levels or just stand aside!!


Please refer to Post 1 of the thread!! Trade details mentioned by me have some errors and may misguide you!!! Sorry for the confusion!!!Thanks TT for pointing it out!

 

[trader.trends]

Levels it seems you have given for Normal Nifty Futures and Not Mini!!!
I had back tested on Nifty Futures only. Trying to mpost a chart of Oct. in Meta Stock. Please share how do we handle the Gaps at opening : The price opens much beyond the previous close either High or Low!!!! As was the case on 1st September.

Yes, I have taken the levels of Nifty as normally there is not much of difference between the Nifty and Mini. For authenticity's sake, I will take the mini Nifty levels from Tuesday. Thanks for pointing that out.

 

[trader.trends]

Seems interesting strategy to me.. I like the exits mgmt in this..
Trader.trends, if I can make 2 suggestions then here they are
1) On your first post, if you can highlight/ color the definition of RED LINE, it will improve the readabilty.
2) On second post, for each trading day, If you can mention the RED LINE value.. (i.e value of prev days close).. then understanding the description may become easy.

Chk out if my suggestions makes sense and accordingly take action.
I will be following this thread to see the expectancy over a period of time. Outcome will reinforce my belief that exits can make the difference in outcome.. even for one of the simplest entry with no fancy indicators/criteria.

Don't know if you are logging all trades in excel sheet of your own or not.. else plz chk out the backtesting sheet that I have provided in NR7 thread.. in 4th/5th post there.



All the best and happy trading.

Dear AW10
Thanks for the suggestions. Makes sense. Will incorporate the same. I was searching for the backtesting sheet, thanks for pointing that out.

 

[trader.trends]

Hi Trader.Trends,
One needs to be careful in analysing the result. I was trying to have a look at the trades posted by you.
Just recheck 7th October trades. I am trying to post a chart in Metastock. Our SL gets hit after we have booked 2 lots at 20 points and 1 lot at 40 points. The SL after booking the 40 points profit is at our first target of 20 points which get hit before further targets are attained. Moreover the 60 points target was achieved in the last 5 minutes of trade.

Dear Karnani
Since I had looked at NF and posted, the difference could be there and you could be right. I really appreciate your efforts in guiding the strategy. I will change the figures for 7 October.

 

[columbus]

There are many good strategies for trading Nifty on this forum. Savantji's Pivots rocks as does Pride's ema cross overs, AW10's NR7 and Options strategies, Radha's various pivots, Dhiraj's 2652 and others I might have left out. I am adding one more to this list. Let me call it The Red Line Strategy.I don't know if other forum members have already explored it, if they have please point it out to me so that I can save the redundancy.

REDLINE strategy works very well in BULL market.

 

[rkkarnani]

Dear Karnani
Since I had looked at NF and posted, the difference could be there and you could be right. I really appreciate your efforts in guiding the strategy. I will change the figures for 7 October.

Trend,
The thread and strategy was of interest to me as I had at some time had a look at something similar.
Do comment for the sake of all whether my understanding of the strategy is correct as posted above.
The levels dont differ much in Mini and Normal lots. You seem to have just checked the Low and erred, and it could happen with any one. My reason for pointing it out was to emphasize on this point, that just by looking at Low of the day let us not infer that certain targets are reached becoz the Price had moved by X points in our direction.

 

[trader.trends]

Trading rules as understood by me :

01. RED LINE is simply previous days Close!!!
02. Go long or short at 0.1% above or below the Red Lines Level. Say Previous days close was at 5000 so we have the following for present days trades :

Enter Long above 5000+0.1%=5005
Entry SL at 5000 less 0.2% = 4990
Exit 40% at 5005+20=5025 SL remains at 4990
Exit 20% at 5005+40=5045 SL moved to 5025
Exit 20% at 5005+60=5065 SL remains at 5025
Exit 20% at close or SL


Enter Short Below 5000 less 0.1% = 4995
Entry SL at 5000+0.2%=5010
Exit 40% at 4995 less 20=4975 SL remains at 5010
Exit 20% at 4995 less 40=4955 SL moved to 4975
Exit 20% at 4995 less 60=4935 SL remains at 4975
Exit 20% at close or SL


Mini futures being used so that the Position size is not too big even when we trade the minimum required 5 Lots. One can trade the Nifty futres with minimum 5 lots.

We need to address the rules for the following :

Market opens with a gap above or below the Previous days close and keeps on going in that direction.
If it retraces back to the Previous days close, we may get a comfortable entry. On 8th October mkt opened above previous days close and drifted down and breached the Redl Line on the down side but did not triger Short. It moved back up . Here we take a long trade at our Level as per pur Rules. This portion is visible in the chart posted in Previous post.
Any other suggestion!!!
To keep it simple, the best is to trade ONLY when it comes back to our original levels or just stand aside!!

Dear Karnani
Perfect understanding. I could not have done it better. As for the mkt opening with gaps and moving in the direction of gaps, we do nothing. The signal to act is only when the red line is breached.
As for the behaviour of 8th Oct as it moved down just two points below the red line it did not trigger our shorts. As you mentioned the longs should have been initiated on the NF crossing the red line and the filter of .1%. Missed Trade!!

 

[trader.trends]

REDLINE strategy works very well in BULL market.

Dear Columbus
Red lines do get breached in all kinds of markets, don't they? So why should it not work in non-Bull mkt? On any day there are whipsaws around the Red line, we will suffer losses and go through anxiety. But then every system whipsaws at some point. Would love your elaboration.

 

[rkkarnani]

Dear Karnani
Perfect understanding. I could not have done it better. As for the mkt opening with gaps and moving in the direction of gaps, we do nothing. The signal to act is only when the red line is breached.
As for the behaviour of 8th Oct as it moved down just two points below the red line it did not trigger our shorts. As you mentioned the longs should have been initiated on the NF crossing the red line and the filter of .1%. Missed Trade!!

TT, On 8th, dont we go long when it move up from below!!!??? Red Line was at 4974.
Do you suggest for a bar to close below and then move up AND then only we take a long!!!
Do clarify your view on this!!!

Not sure becoz I do not have a lower time frame chart, but mayb be in 1 minute chart we might see a bar just above or below the Red Line and then triggered Long!!

 

[rkkarnani]

REDLINE strategy works very well in BULL market.

I would rather say it works well in "Trending Markets" as most of the TA based trading systems do, be it BULL or BEAR!!
All you need to do is get a RR in your favour!!