Trading Strategies Using Technical Analysis

Thanks watcher ... the system has been back tested for period of 6 years ...
Honestly I don't bel in back testing results ... there r so many dynamic things in the market (plus the human element) that back test results do not incorporate ... hence am testing it live .. lets see ...


Tc

Raunakagarwal : Very good, your keen and interestfully responce to TVRSSV appreciated.

Classical Gap Setup - Intraday Trades

Classical Gap Setup - Intraday Trades

Tools – Candlestick/Bar Chart (Hourly Time Frame), Comparative Relative Strength (Base Index: Nifty)

Brief Introduction – Now, Let’s take time over understanding this. Markets are based on demand and supply. Gap down, as shown in one of the images below indicates that today the market opened lower. Hence, the bidding today started much lower than yesterday’s lows. This means traders are expecting the market to go down and hence are not even bidding near the levels of yesterday. This is classical sign of bearishness. Same goes for upward gap.

Concept of Relative Strength - First of all, do not confuse this with Relative Strength Index (RSI). RSI is completely different. Comparative Relative strength is when a stock is compared with a base entity (let’s say an index; Nifty). By using Comparative Relative Strength we compare whether the stock is outperforming NIFTY or underperforming NIFTY. We will always want to buy stocks which are outperforming the index and will always want to short stocks which underperform NIFTY.

Trade Setup - This is one of the few setups which gives consistent returns in intraday. We enter a BUY position when there is an upward gap on Hourly time frame and the gap is sustained for one hour with the Comparative Relative strength sloping/pointing up. We enter a SHORT position when there is downward gap on Hourly time frame and the gap is sustained for one hour with Comparative Relative strength indicator sloping/pointing down.

Time and Validity - I trade this pattern only on Hourly charts. Out of 10, I must say 6 of the gap patterns are successful. If you get a gap up in a stock that has reversed or formed a base, then the pattern seems to work more efficiently. If you apply the same structure on daily charts, results can be even better.

Stoploss and Target - I have explained the stop loss in the charts. Targets may vary depending on the range of the stock.

Examples - I have given 2 very recent examples. One for Buy setp and one for short setup. Please refer below.

Note - Intraday trades are for very experienced traders. Please master some setup and paper trade it before putting real money.

Take Nifty Stop Loss as 5170 ... These were signals generated yesterday ... Servers are up and running .. however still not stable ... will post today's signals around 15.20 ...

Punjllyod is giving a lot of false signals ... it is common for a stock to do so if its not trending ... we r planning to incorporate a trend identifier in the system so that better results can be given ..

Tc

Raunak ji
Please guide me where is ur 3-4 days swing trading afl code sir. I can see the 5 days momuntum afl code.

Thanks for pointing this out ...

I'll get it done by today or tomm ... actually this strategy is very subjective (depends a lot on self analysis) and hence proper AFL is a bit difficult to write ... But I'll see what I can do ... will update u on this till evening ... tc

raunak,
The Wipro Call worked well.

Yes. Even yesterday's signals are doing well ... lets c

Re: Classical Gap Setup - Intraday Trades

How to incorporate comparative relative strength indicator in the charts. I am using investbulls. Thanks and regards

Tomorrow's Signals

AuroPharma , Crompton, Hindpetro, Indiainfo, ONGC, RCOM, Sesa Goa and Sterlin Bio ...

All for buys ... will post in proper format later ...

Lets check these tomm ... please do not trade ...