SH's 315 Strategy - how to use if effectively

#31
OK chart this time.

I will talk you through the chart.

Please see first red up arrow .. a buy on 16th March, before the days close you can see 3 EMA clearly above 15 EMA you take your first lot long position before market closes on 16th March ie around 2770 (please note how we need to wait till the last moment of EOD candle close to ensure we have a confirmed crossover on EOD charts).

Wow - we have a secular bull swing going from that day which takes markets to 3500 levels.

Please see second red up arrow on 28th April. Markets corrects on this day and EOD candle touches (or gets very close to) 15 EMA. This is the point we 'Add' one more lot long just before th day closes at around 3350 levels. Now the fact is that our average price has become 3060 for 2 lots so even if next day we again have a down day and 3 EMA crosses and closes below 15 EMA we will still be able to get out at a level above 3060 and hence book profits. See how even after our 'Add' we have not increased our risk overall.

Wow - but markets go up next day and both our positions are in profits.

NOW, please see 4th May candle... Nifty gapped up by 5% and closed at 3658.This is our Exit candle since 3 EMA is not touching the body candle at all.

So we basically book both lots before market closes on 4th May at around 3650. So we have made 590 points profit per lot or total 1180 points profit.

We now want to renter again with 2 lots whenever EOD candle touches 3 EMA again. If you see on 6th May that happens and we again go long 2 lots before market close at around 3630.

Now, please see the third up arrow. Markets keep correcting and EOD candle again touches 15 EMA on 11th May. This is where we 'add' our 3rd lot at around 3550. NOw we hold 3 lots NF long with avg price 3600. We have already booked 1180 points so that is still acting as a buffer we have in case markets go down next day and our SAR is hit. We will still have overall profits.

But as luck had it .. our SAR is not hit since markets are rangebound waiting for election results.

Now please see 19th May Candle .. opened way beyond 3 EMA so clearly a profit booking zone right at the open. It was a volatile day, opened at 4600 and kept crashing to 4200 ...assume we exited at 4300. We made 700 points profit per lot on 3 lots or total 2100 points profit. Add that to 1190 points profit and we have made 3390 points profit.

As you can see, we reenter again after a couple of days as marked on charts.... Finally on 18th June we exit all longs and enter shorts (again 1 lot as start).

We add shorts at 25th June... we have a small whipsaw on a day before budget but after budget we get another sell signal and now we are short.

I will cover one more important aspect about 'Protecting Capital' in my next post. Please post any questions here in the meantime.

Cheers
SH:thumb:
 

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bandlab2

Well-Known Member
#32
thanks so much for the explanation SH.

Few requests/clarifications

1. if you find time pl post only 1 week chart around each 'action' point like entry, add, exit etc. just zooming to the local area to see more details

2. on entry day, we wait till last min to see if we have clear cross over and take the position. alternatively we can wait for next day open but gap up/down will cause issues. so better to take today itself. is that right ?

3. on 'add' , till we wait completely for the candle to finish to see if it is coming closer or touching 15 EMA ? Unless current candle doesnt close how do we know it is close ? or just take a chance to add at eod just like the initial entry ?

4. on 'exit', unless current candle closes we dont know if its not touching 3 EMA , again we take a chance and exit at the highest point of the day or wait till eod and take the eod price ?

5. how to handle the gaps ? for example on election day we are long so gap up worked in our favor. if it has gone down, then we would have reversed only next day becuase we get the signal next day. or shall we take on eod of we get the clear signal that day itself ? i know this is tricky but such big gaps can spoil the party

6. can u zoom in and show the whips in june-july ?

7. did u trade this method on nifty in the past ? how is your experience in live trades ?

8. if someone missed the SAR, the next best place to enter is at 'add' point ? can we add with more qty as if we added at the entry ?
 
#33
thanks so much for the explanation SH.

Few requests/clarifications

1. if you find time pl post only 1 week chart around each 'action' point like entry, add, exit etc. just zooming to the local area to see more details

2. on entry day, we wait till last min to see if we have clear cross over and take the position. alternatively we can wait for next day open but gap up/down will cause issues. so better to take today itself. is that right ?

3. on 'add' , till we wait completely for the candle to finish to see if it is coming closer or touching 15 EMA ? Unless current candle doesnt close how do we know it is close ? or just take a chance to add at eod just like the initial entry ?

4. on 'exit', unless current candle closes we dont know if its not touching 3 EMA , again we take a chance and exit at the highest point of the day or wait till eod and take the eod price ?

5. how to handle the gaps ? for example on election day we are long so gap up worked in our favor. if it has gone down, then we would have reversed only next day becuase we get the signal next day. or shall we take on eod of we get the clear signal that day itself ? i know this is tricky but such big gaps can spoil the party

6. can u zoom in and show the whips in june-july ?

7. did u trade this method on nifty in the past ? how is your experience in live trades ?

8. if someone missed the SAR, the next best place to enter is at 'add' point ? can we add with more qty as if we added at the entry ?

Hi Bandlab,

1. I have used EOD charts so this week we got only one entry signal on Tuesday the day after budget. The signal was to enter short since that day we could clearly see 3 EMA bearish crossover before the day closed.

2. Yes better not to wait for next day but to take position today itself before market closes.

3. We basically add as soon as we see candle touching the 15 EMA during the day. We dont wait for EOD closing time. This is becuase, lets say you are long, you will sometimes find 15 EMA supported the fall and markets moved up later closing and giving a bullish hammer on EOD, meaning you added at the days low. You dont want to miss that.

4. Yes, for EXIT we dont wait for EOD.. if we see the current price is way above the 3 EMA, we immidiately exit without waiting. Usually you may find you exited on highs of the days since markets corrected to come down and touch 3 EMA. As soon as this touch happens, its a signal for you to get back into the position. If markets dont correct and keeping moving away from 3 EMA .. you do nothing .. you are position less with some profits booked. You will wait until price touches 3 EMA even if it means waiting for 2-3 days.

5. Yes big gaps or sometimes Wide Range Bars against your position can spoil the party. You cannot control overnight movements but the good thing is most of the times you will find these gaps in your favour with occasionally going against your positions. If you see on Friday before budget day 315 gave a buy signal so we jumped on longs. On budget day morning it went up, but later came crashing down .. we couldnt do anything.. we held our longs until another day and shorted only next day when we could see a clear crossover. But these whipsaws are few and far in between.

6. I will post the zoomed charts tomorrow, though you can also see them clearly on whatever software you use. you just need to plot 3 EMA and 5 EMA.

7. Yes I trade based on 315 for swings/positionals and results are very good. Thats why I chose to post it here on TJ.

8. If someone misses the SAR, the best point is to get in at the first possible opportunity. Dont wait for the 'add' point to come.... what if the add point comes after Nifty has already moved 200-300 points as per 315? you enter next day even if you miss .. and normal add whenever the add opportunity comes. worst case you will short too low .. add higher .. get whipsawed but its worth the chance. If reversal happens and your SAR is hit .. so be it .. you hop on to longs.

Hope this helps.

Cheers
SH:thumb:
 
#34
By the way - If you check my post on 7th July morning I had mentioned that people should look out for a signal generated that day. That day a short signal was generated so shorted before days close at around 4190.

Nifty closed at 3993 today so the position is already 200 odd points in profit with no adds yet :)

Tomorrow if it gaps down and we see price not touching EOD 3 EMA, it will be our 'Exit - book profits and wait' moment. Alterntaively, if it gaps down and keeps falling... we can apply the mini flow formula.. put an SL (not SAR) at open price + filter and book when we feel it has fallen enough. Once we have booked profits, we will wait for the moment when we see 3 EMA touching EOD candle again.. as soon that happens we jump back in shorts.

Cheers
SH
 
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#35
Today another gap down and EOD candle has not touched 3 EMA while NF is at 3930 ... This is our 'book profit' point. Shorted at 4190 booked at 3930 is a clean 260 points profit ....

Now we have to jump into shorts at 3 EMA touch.

Cheers
SH
 
#36
Hi SH,
Please help clarify on following:

...
Entries
Entries are simple, you wait for a candle to close above 15 EMA, next candle to open and see if 3 EMA is above 15 EMA or not. If the answer is 'Yes' you go long. For shorts you need an exact opposite setup.
...
Cheers
SH:thumb:
1. So, its not plain 3ema crossover. Its more than that.
Is this to avoid any possible whipsaw in addition to 3ema?

...
a buy on 16th March, before the days close you can see 3 EMA clearly above 15 EMA you take your first lot long position before market closes on 16th March ie around 2770
...
Cheers
SH:thumb:
2. From the above post it looks like, you are taking LTP (last traded price) to calculate 3ema, 15ema.
Correct? If so, then we will need RT data.

...
NOW, please see 4th May candle... Nifty gapped up by 5% and closed at 3658.This is our Exit candle since 3 EMA is not touching the body candle at all.

So we basically book both lots before market closes on 4th May at around 3650. So we have made 590 points profit per lot or total 1180 points profit.

We now want to renter again with 2 lots whenever EOD candle touches 3 EMA again. If you see on 6th May that happens and we again go long 2 lots before market close at around 3630.

Cheers
SH:thumb:
3. Here, the exit is @3650 while [email protected] So, not much difference.
I think positional traders (esp part-timers like service ppl) can overlook this one and hold onto their positions.
Is that OK?

-ritesh.
 
#39
Dear Sir,

Very interesting setup indeed, but where to get RT EOD data?. Kindly enlighten.

Regards

Hi,

There are many brokers who provide free Real Time charts along with a trading account. I personally use Sharekhan charts (comes with Trade Tiger application). There are some online paid chart services available as well like Icharts etc which provides you real time charts for all stocks and futures.

Cheers
SH
 
#40
Dear Sir,

Thanks for your prompt reply. I have an account with Religare and I am using Odin diet. Can I see real time graph of eod data in obin diet.

Regards
 

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