SH's swing trading system - a simple way to play the markets

Hi SH,

Thanks for posting. We will still follow. we are missing you, your updated rules, new method(s)

BTW, GFZ hit 2/3 days back but not worked as expected.

Last time you said you changed because it is range bound. But now you have changed it permanently OR just for now ? because i need to update data accordingly in my thread.

I dont mean to object or anything but here is what i observed..

Your GFZ and bands are according to Alexander Elder if i am not wrong??

He says the envelopes should be like a shirt that fits perfectly and only the head and the arms are out, i.e., 95% of prices have to be inside the envelopes and only the noise and highs should be outside. Here 1.5% on 30mins and 15mins doesnt satisfy that condition and thats the reason this setup got whipsaws. The 1.5% envelopes are too wide for 30min or 15min TF.. Also NF range is very small too to trade shorter TFs(According to the rules laid down by Alexander Elder in his book "Come into my Trading Room").. Although i guess we are trading trends and not ranges..

Also, he mentioned that you should always review your indicators after certain period.. In NF case, the NF has been trading in tight ranges and so the envelopes' settings had to be considered again..

Again, every system has whipsaws and we need to tweak and use our intellect while trading, time and again.. (Something like this was also said by Alexander Elder)..

Finally i would though like to thank you for you contributions here..

I am but an amateur and forever a student of markets.. Sorry if i am wrong and wont mind to be corrected..

Thanks

Last time when we had a discussion related to this, SH mentioned, he will switch back to 30 mins once we have more volatility and bigger swings, which will be evident by hitting the current GFZ settings once/twice in a week.

GFZ is only for profit booking. One can use 1:2 RR for 50% and TSL for rest. And with the current moves, we get swings < 100 points which is very hard to ride in 30 mins. That is one of the main reason to move to 15 mins, where we get early entries. We have to keep in mind, we will get more trades (and SL hits) since it is lower TF .

This is 30min chart and 15EMA used and no GFZ (EMA Channel)..

You can see some up arrows in the chart.. I wanted to ask, without considering GFZ theory (i haven't set it up in the chart), can we add or enter a trade at the close of the first candle (first bullish candle).. Looking back yes we can but on the day while the candle is being formed, what would be advisable??

According to the rules, we add after prices come above the EMA and after at the close of the bullish candle... In the case presented in the charts, the candle opened above the MA and it was bullish too in two cases.. There was no candle that closed above the MA with the MA price included in the candle (i hope its not too complicated a sentence).. The markets closed below the MA and opened above the MA the next day..

If the question is whether we can add, if the first bullish candle was not touching ema due to gap open, yes we can. All we look for a close above ema (after EMA testing) and the high of this candle taken, with SL at swing low below 15ema. One might want to consider if the price is outside GFZ after the gap up. If so generally it is not advisable to enter (according to the system).

There are few who trade this method without GFZ and keep trailing SL (exiting is at TSL).

15ema touch on 30 min. Let's see if the next candle is green. Anyway, it will be nearly closing time by then

What if if the first candle is bearish?? Like markets open with a real gap up and come down in the first half hour and then it decides to go up again.. Although we would never know the markets.. So we always enter long after bullish candle only or we can enter at the close of bearish candle open and close above the EMA..

What if THIS candle stays green?? The prices haven't gone below the EMA..

A close of green (C>O) bar is required. Not any close above 15ema. If there is a real gap up, our SL will be huge, we naturally end up waiting for another 15 ema touch (like what happened on 17th-Sep).

TP, you are looking at spot price or futures? Nifty didn't touched 15ema yet in my charts .