SH's MArket Correction Prediction Strategy

[Tradewithhunter]

Thanks SH..

It looks like almost for 4 weeks, nifty didn't touched 15 EMA...
should we start going long targeting 15EMA now?
or we should wait for one more week(i.e 5th week) ?

What your take on this SH?

Nifty tested 15 EMA on 13th May so we are just in the second week now.

Cheers
SH

 

[register1803]

nice thread man

 

[manoharpillai]

15 ema at 5613 i think that is important level as per weekly chart to watch out for

 

[trade4joisar]

Today 3 EMA correction strategy worked seamlessly in MenthaOil (Commodity market).

 

[manoharpillai]

Watch 5513 level for tomorrow closing

 

[Piuvbn]

Nifty tested 15 EMA on 13th May so we are just in the second week now.

Cheers
SH

SHji all your strategies are money-able(money make-able=money can be made).All can be used together.Thanks a lot

 

[sunny_cool]

OK dude - here you go.

How to earn 25% to 50% ROI per trade twice every year


First of all, the trades are done in options. If you invest 50K in buying options, you can expect the options to become 60K to 70K within a month (sometimes more!) and hence 25% - 50% returns on investment. Anyone ready to invest larger amounts, My suggestion would be to start booking gradual profits starting from 10% onwards.

Success Ratio is again above 90% (based on my backtest which is usually pretty RAW since I dont know how to build AFLs etc). I am more than happy to be standing corrected if success ratio is lower than that.

This is also a market neautral strategy i.e it doesnt matter whether market goes up or down .. a trader will still earn.


Trade Setup


Ok - I have already explained how NIfty Futures likes to return to some key EMAs within a definite period of time.

One of the key EMA is 100 EMA which Nifty has to retest within 6-7 months. HOwever please note .. Nifty HATES 100 EMA ... i.e it doesnt like to stick around 100 EMA for long. It will either shoot back towards the main trend after getting resisted/supported by 100 EMA or if its a reversal it will shoot off in the opposite direction.

The key word is it 'shoots off' in one direction or the other but in no way it will stick around 100 EMA for long.

Now once we know this, how do we exploit this knowledge to our advantage?? Simple... As soon as Nifty touches 100 EMA ... we buy OTM (out of money) calls and puts both and hold until one of them becomes ITM (In the money). As soon as one of the option becomes ITM .. it will give you 25% to 50% returns over investment (even if the other option leg is expiring worthless).

For eg look at 3rd Nov candle which retested 100 EMA at 4650 odd levels. At that point one can buy 4800 Calls and 4500 Puts and hold. Since it was start of the month these options would not have costed more that 50-60 odd points each or Total investment of Rs 5000-6000 per pair of call and put taken together.

Now since Nifty hated 100 EMA.. it jumped back in the direction of the main trend making a high of 5024 on 11th November. At this point our 4800 call was selling for 200+ points and our puts were almost worthless. If we square off both calls and puts at that stage we get Rs 10000 per pair which is a WHOPPING 100% returns on investment.

I actually did not wait until 11th Nov but I squared off my option pairs on 9th Nov when Nifty touched 4850 levels and was satisfied with 50%+ profits.

Similarly you can check out what happened after 24th March when 100 EMA was touched at around 2990. After 9 trading days Nifty was sitting pretty at 3350 levels again generating awesome ROI.

you see the game plan?? :lol: The thumb rule is as soon as NIfty has moved 5% -6% in any direction after kissing 100 EMA .. your market neautral option strategy should be in 25% profits or above.

Thats how you can get 25% to 50% ROI atleast twice an year (since we know every 6th-7th month 100 EMA will have to be retested).

Happy Backtesting again :thumb:

Cheers
SH

What a wonderful theory Sir...Its always pleasure going through your thread & posts...Its so simple yet give great results

However today i was working on this strategy of yours & I tried mixing it with 315 strategy & found ultimate results...Please correct @Tradewithhunter if i am wrong anywhere

This is also very simple :-

If as per 315 its in downtrend or in sell mode already its 90% or more that market will go away from 100 EMA in down direction and vice-versa.

Or in other words

If 3EMA is below 15EMA Nifty will most probably go away from 100EMA in down direction & Vice-Versa

Sir @Tradewithhunter please correct me if I am wrong at any point & I will really happy if you will add something to it & amend it for a better result


Note : Was not able to attach chart due to attachment limit.Pl check last two year chart with 3,15 & 100 EMA

Regards,
Sunny

 

[amol_gh123]

Dear SH,

I am die-hard fan of ur strategies... they are so simple to understand... and more important to follow them practically... :clapping:

About 100 EMA re-testing i have few queries ... Please clarify them...
1) Can I built a rule to enter into trade as :
If 100 EMA is tested in first week of expiry month , we will buy CE-PE pair for current month... if it is tested second week onwards, we will get into pair position for next months expiry... OR do you have any other observation for this ... may be like for first 15 days get into current months expiry and next 15 days next months expiry.... Please suggest.

2) I believe, for 100 EMA testing we are considering SPOT value chart and not Futures... Though sound basic, couldn't get clear picture about the same.

Tons of Thanks for sharing ur thoughts...

 

[Tradewithhunter]

What a wonderful theory Sir...Its always pleasure going through your thread & posts...Its so simple yet give great results

However today i was working on this strategy of yours & I tried mixing it with 315 strategy & found ultimate results...Please correct @Tradewithhunter if i am wrong anywhere

This is also very simple :-

If as per 315 its in downtrend or in sell mode already its 90% or more that market will go away from 100 EMA in down direction and vice-versa.

Or in other words

If 3EMA is below 15EMA Nifty will most probably go away from 100EMA in down direction & Vice-Versa

Sir @Tradewithhunter please correct me if I am wrong at any point & I will really happy if you will add something to it & amend it for a better result


Note : Was not able to attach chart due to attachment limit.Pl check last two year chart with 3,15 & 100 EMA

Regards,
Sunny

Please dont mix the two ... treat them separately and trade them separately.

Cheers
SH

 

[Tradewithhunter]

Dear SH,

I am die-hard fan of ur strategies... they are so simple to understand... and more important to follow them practically... :clapping:

About 100 EMA re-testing i have few queries ... Please clarify them...
1) Can I built a rule to enter into trade as :
If 100 EMA is tested in first week of expiry month , we will buy CE-PE pair for current month... if it is tested second week onwards, we will get into pair position for next months expiry... OR do you have any other observation for this ... may be like for first 15 days get into current months expiry and next 15 days next months expiry.... Please suggest.

2) I believe, for 100 EMA testing we are considering SPOT value chart and not Futures... Though sound basic, couldn't get clear picture about the same.

Tons of Thanks for sharing ur thoughts...

Hi,

1) Buy current month for first three weeks ... buy next month in last 1 week.

2) I always refer to future values not spot.

NF 100 EMA is around 5575 zone right now so if we retest it this week ...be ready to buy some straddles for July series ... (or buy puts and reverse to calls if NF closes above 100 EMA).

Cheers
SH