We wait to trade the breakouts whether from ranges, channels, High/Lows etc. What happens when the break out occurs and then it fails? Does that give us a chance to trade? First we need to identify which failed breakouts (fakeouts) we will trade. Bandlab has created a system to trade the fakeouts of Nr7i. Here is a shot at trying the fakeouts of 2 day high/Low.
Entry Setup: Wait for the 2 day high/low to be broken. If it happens at the opening with a gap, wonderful. Once the 2D H/L is broken, next is to wait for the Previous close to be broken. When the Previous close is broken the trade is on. If the PC is broken after the 2D High is broken, we short the break of the PC, If the PC is broken after the 2D Low is broken, we go long.
Stops: For shorts, the 2D High, for Longs the 2D Low.
Exits: So far I have looked at only closing at LTP. May refine the exits later.
Position Size: Undecided, but for now paper trading with fixed cap of one lac on every trade.
Time frame: Intra day only. No carry over.
This is just a trade set up not a confirmed strategy. Back test of EOD data gives wonderful result but not reliable. Here are a few sample trades on 8 stocks I am tracking for this purpose. All trades not listed here.
5 Jan
Reliance broke the 2 day High(1096) at open itself. The open and high remained at 1149.90. Shorted the break of 1075.50(PC). LTP was 1068.70.
SBI broke 2DH (2300) at open. Shorted the break of 2291.20(PC). LTP: 2294
6 Jan
Infosys broke the 2DH of 2630 again at open. Shorted the break of 2621.35(PC). LTP: 2580
Bharti broke the 2DH of 332.10 at open. Shorted the break of 330.35(PC). LTP: 326.90
Refinements welcome.
Entry Setup: Wait for the 2 day high/low to be broken. If it happens at the opening with a gap, wonderful. Once the 2D H/L is broken, next is to wait for the Previous close to be broken. When the Previous close is broken the trade is on. If the PC is broken after the 2D High is broken, we short the break of the PC, If the PC is broken after the 2D Low is broken, we go long.
Stops: For shorts, the 2D High, for Longs the 2D Low.
Exits: So far I have looked at only closing at LTP. May refine the exits later.
Position Size: Undecided, but for now paper trading with fixed cap of one lac on every trade.
Time frame: Intra day only. No carry over.
This is just a trade set up not a confirmed strategy. Back test of EOD data gives wonderful result but not reliable. Here are a few sample trades on 8 stocks I am tracking for this purpose. All trades not listed here.
5 Jan
Reliance broke the 2 day High(1096) at open itself. The open and high remained at 1149.90. Shorted the break of 1075.50(PC). LTP was 1068.70.
SBI broke 2DH (2300) at open. Shorted the break of 2291.20(PC). LTP: 2294
6 Jan
Infosys broke the 2DH of 2630 again at open. Shorted the break of 2621.35(PC). LTP: 2580
Bharti broke the 2DH of 332.10 at open. Shorted the break of 330.35(PC). LTP: 326.90
Refinements welcome.