Thoughts on Day/Swing Trading

Yes techtrader 2, today was a great day for this strategy.....

I have not done any formal backtesting of this strategy but i have been trading it for last many years. My experience is it will work 80 % time...that is enough for me to trade....I can always take care of those 20 % when it fails as I trade with tight stops.

Never thought of that as a system because by the time this difference develops after 2:30 I am always in the position as per the trend and in profit 35-40 nifty points....I only use this to decide that I will wait till the end for profit booking as market is likely to accelerate in the direction of my trade....and in most of the days we make 60-70 points in Nifty by the time the market closes.

Smart_trade

Hi ST,

A query here.

By the time it was 2.30 pm.... the nifty was at 4705 with VWAP at 4816 . I would think that most people would already be short by this time.

So in this scenario how would knowing the VWAP price help since the gap is already 110 odd points. Though , i do admit that squaring up time I got the extra squeeze till the last few seconds but that should nt have worked today since even the most stubborn guys would not be long today latter half...

Yes hills_5000 at 2:30 the difference was 88 points ( 4707 and 4795.5 ) and when one is already short, it helps to decide whether to book profits at say 4700 or wait for the last drop of the juice......and by the time we closed the difference went to 125 points and NF around 4625-30 , so this technique help one to get 70-75 nifty points additional from the place where one would have thought of booking some profits.

Beg to differ on your observation "but that should nt have worked today since even the most stubborn guys would not be long today latter half." Not true.....the VWAP was so high means huge volume has been done at higher prices, the bulls were holding their positions and most of them did not liquidate else the volume weighted average would come closer to the price. Such large difference meant that the bulls freezed and they held their loosing positions. And we are on the prowl for such opportunities.....are n't we ? And extra 70-75 points are always welcome.....

Smart_trade

Dear smart,
quote:
Such large difference meant that the bulls freezed and they held their loosing positions.
Unquote:
Is there any chance that the vwatp of today would be revisited in the coming days since it could be construed as a 'gap'.ie both on the Long & Short side.can we say it is Virgin ATP till it is revisited.

Hi ST da

Thanx for the VWAP strategy. Has played out really well this month.

You Rock

Bulls are trapped when VWAP is greater then CMP has difference of > 40 points & vice versa right ?

SCALE IN AND SCALE OUT OF TIMEFRAMES .......To trade fast and furious markets.

Fast and furious markets are great markets to trade as they offer very good Reward /risk in shortest possible time. But they are also very volatile and furious and can hit you very hard if they suddenly reverse and you are not trading with tight stoploss.

Many trader friends mentioned that they could not participate fully in yesterday afternoon's crash because of they did not know how to enter in between the running trend and how to protect themselves if the market suddenly reverses. This is one of the questions a trader always faces.

I am posting a NF 3 min chart with markings. If one is normally trading 5 min timeframe, then scale down one step,say to 3 min. The chart shows the green bars , short the low of the green bars and keep a stoploss of the swing high in 3 min ( stops indicated by black lines ) This 3 min timeframe is only for initial stoploss. Once the trade moves in our favour, we scale up to 5 min timeframe and trade that. The chart shows that there were atleast 5 places where one could have entered with 8-12 points stops in the downmove which we had yesterday.

The beauty of these strong and violent trends is that your trade moves in profits very fast and then you are relaxed and the only job is to manage the trade.

With these entries and stops one can participate in strong and violent trend moves very profitably without any fear of large loss.....

Happy trading....

Smart_trade

Is there any way to check if market is in mood of fast and furious ?

If we desparately want to enter the trade but very scared to pull the trigger and in the meanwhile market runs away from us and our stops now become 25 points instead of 10-12 earlier and we feel like "damn I should have entered 10 points back" ....that is the sign that the market is fast and furious. This happens to all of us , I am sure....

Smart_trade