SH's 315 Strategy - how to use if effectively

#1
Hi Friends,

I would like to use this thread to explain my 315 strategy along with some rules on how to trade it effectively for swings as well as positionals.

Cheers
Stockhunter (SH)
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Edited by Stockhunter on 11/08/2009

Hi Friends - since thread has become very long and my rules are thrown in between on different pages, I am giving the index of my important posts for anyone who sees this thread for the first time and wants to know the strategy.

For Basics and some Background on 315 - Please click here http://www.traderji.com/technical-a...rategy-how-use-if-effectively.html#post331535

For Entry, Pryramiding & Exits (profit booking) and re-entry rules - Please click here http://www.traderji.com/technical-a...tegy-how-use-if-effectively-3.html#post332954

Also click here to see explanation using a chart http://www.traderji.com/technical-a...tegy-how-use-if-effectively-4.html#post333264

For Stop Losses and protecting your capital - Please click here http://www.traderji.com/technical-a...tegy-how-use-if-effectively-7.html#post338314

Also, for more explanations and different SLs for a conservative trader and an aggressive trader click http://www.traderji.com/technical-a...egy-how-use-if-effectively-11.html#post347026

Cheers
Stockhunter (SH)
 
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ag_fx

Well-Known Member
#2
Hi Friends,

I would like to use this thread to explain my 315 strategy along with some rules on how to trade it effectively for swings as well as positionals.

Cheers
Stockhunter (SH)

Waiting for your posts SH. All the best.


Happy Trading
 
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#6
OK - so here we go.

The first step is to understand what is 315 .. its advatages and disadvantages.

The second step is to understand some rules I have derived to use it effectively. Rules are related to effective entries, effective SL management, effective profit bookings, effective re-entries and in the end effective money management or effective safeguarding the capital.

In this post I would focus on step 1 i.e what is 315 etc.

315 Strategy for swing trading

315 is a simple swing technique which tries to identify a trend very early. In this strategy we use only EMAs name EMA 3 & EMA 15 (hence the name 315).

People ask me why EMA 3 and EMA 15 .... for me last 3 days define the immediate average price ... to find the slightly longer term trend i use the factor of 5. This is becuase 5 has an interesting relevance to markets.... we have approx 5 hours of trading everyday, 5 trading days in a week, almost 5 trading weeks in a month .... So I simply multiple 3 by 5 to get my 15 EMA which defines my medium term average price.

Now in simple terms, if our immediate average price is higher than the medium term average price that means we are entering in a bull swing ... and visa versa. Hence the strategy entries are:

1 Enter Long when 3 EMA goes above 15 EMA
2 Enter Short when 3 EMA goes below 15 EMA

Advantages of following 315 strategy

1. A simple technique using just 2 EMAs, no other oscilattors or indicators required. NO advanced charting softwares required.

2. System is based on following the ULTIMATE indicator available i.e price action.

3. Keeps a trader in the trend, lets the full swing to complete. Never gets a trader against the trend.

4. Since we are just following price action, we dont need to worry about divergences etc.

Disadvantages of 315 Strategy

1. Works brilliantly in a trending market but can whipsaw in extremely ranging markets. However this can be overcome by certain rules and money management to be explained later in this thread.



So this is what the strategy is folks, do some chart reading and see how it works on EOD charts. Do post any questions you have here.

I will come back to talk about Step 2 again.

Keep an eye on Nifty charts, 315 is going to generate a signal soon... dont miss.

Cheers
SH:thumb:
 

bandlab2

Well-Known Member
#7
First chart predicted the buget crash yesterday and we are in sell right now

Second one is about the great uptrend from 2800 to 4500

We had a wipsaw before the budget crash. but the loss of wipsaw is not much whn compared to the gains

we need back testing in all market situations.

btw, i took EOD data
 
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