My trades based on "new way of pivot trading" and vwap

amandeep86

amandeep86

Well-Known Member
#621
#621
vijkris said:
bro, I agree with u it is fast.
If yours is discretionary system then will suggest u to stick to 3/5 min. in 1 min lot of confusing signals.
mine is semi automatic, and I simply wait for arrows of my trading system, so lot of issues got solved. :D

BTW, I have observed that using Pi less time is taken to punch orders compared to nest.
Click to expand...
Yes One Minute is fast ,but if you know what you are doing then this timeframe can double your daily return..I m trading 1 TF now , also trying to make my entries as mechanical as possible.

BTW , please give some more inputs on using PI for order punching ,what about slippage?I m thinking to shift to Pi if order punching issue gets simpler then NEST
 
Mungus

Mungus

Well-Known Member
#622
#622
vijkris said:
TWO PERCENT RISK FORMULA

As a starting point, It is recommended that you do not risk more than 2 percent on any one individual trade.

If you are a more advanced trader and choose to risk more than 2 percent, you will want to substitute the 2 percent amount in this formula with the percent you decide to have at risk prior to doing this calculation.

conservatively I have modified it to 1%.

Formula: Account size×1%=Risk amount
Example:
capital = rs 20,000
rs20,000×1%= 200
Remember,the risk amount of rs200 includes commission and slippage.
You will need to take that into account.
Now that you know what amount you will risk on your trade (rs200) you can figure out your proper trade size.


TRADE SIZE FORMULA

In the example, we can risk rs 200 per trade on a rs20,000 trading account.
The formula for determining proper trade size for this risk amount is as follows:

Formula: [Risk amount−Commission] ÷initial stop loss = trade size

Eg. ABC - ltp @ entry = rs 200 , initial stop = 198; i.e 2 rs , approx brok = 50
therefore [200−50] = 150 is the max loss amt if trade goes wrong.

No.of shares = 150 ÷ 2(initial stop) = 75 shares


we must also include the max loss per day. after crossing that we have to compulsorily stop trading for the day/
As an example, it can be set conservatively as 4% of capital.
that means after hitting 4 consecutive 1% loss, we have to stop trading for the day, and analyse what went wrong.

2 or 3 consecutive days of being stopped out means, for that week trading must be stopped.
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Vijay,If SL got hit,1%=200rs,then next trade,again SL got hit,1%=200rs.
Total=400rs loss which is 2% of this 20k Capital.Do you take 3rd trade risking 1% more?

2nd day also same happens,what do you do?
and unfortunately,3rd day also it happened :mad:

Total=6-8% down
How long will it take to cover this 6-8% loss?

How a Pro handle this?
 
vijkris

vijkris

Learner and Follower
#623
#623
Mungus said:
Vijay,If SL got hit,1%=200rs,then next trade,again SL got hit,1%=200rs.
Total=400rs loss which is 2% of this 20k Capital.Do you take 3rd trade risking 1% more?

2nd day also same happens,what do you do?
and unfortunately,3rd day also it happened :mad:

Total=6-8% down
How long will it take to cover this 6-8% loss?

How a Pro handle this?
Click to expand...
i m not a Pro yet, still will attempt to answer .:D

it all depends on ur risk appetite and the drawdwn of ur system .
we need to put a daily and weekly cut off limit.
i have placed a weekly cut off @ 6-8%.
i.e approx 2% per day. for this i risk each trade 0.5% so that i get 4 chances to trade in a day.
usually if 3 consecutive trades sl hits will make me stop trading further in the day.
if 3 days consecutive sl hits. means stop for the week. relook at the causes of loss. psychological or method problem ?

BTW how long it will take to recover loss depends on ur system and psychology.
if u still repeat the mistakes, it will be difficult to recover loss. :(

if in 2 weeks sl hits . i.e 6+6 = 12% down means serious prob. reduce the risk per trade or stop trading for the month and find out what is the issue.
a good system will not give so many losses, i think.
even if system is tested and it says there can be 4 weeks of losses, still can we handle it psychologically.?
i may not choose that system as for me psycholigically it s difficult.
 
vijkris

vijkris

Learner and Follower
#624
#624
an imp post:

suri112000 said:
There was no change in my efforts or results until I saw this golden and revealing poster of Ratan Tata few years back.:)

Can you see something relevant to your trading expectations?

Click to expand...
 
rip07

rip07

Well-Known Member
#625
#625
Mungus said:
Vijay,If SL got hit,1%=200rs,then next trade,again SL got hit,1%=200rs.
Total=400rs loss which is 2% of this 20k Capital.Do you take 3rd trade risking 1% more?

2nd day also same happens,what do you do?
and unfortunately,3rd day also it happened :mad:

Total=6-8% down
How long will it take to cover this 6-8% loss?

How a Pro handle this?
Click to expand...
@Mungus, Although vijay explained it very well, i would like to add what i usually do in this case.

When such things happened 2 SL back to back, next day i trade with minimum quantity of my trading account and if trades go in my favor I adds (as confidence is coming back). Otherwise i will keep testing 2-3 trades in a day as per my edge with minimum quantity.

E.g. If I usually trade with 10 lots, and 2 SL happened, next day i will start with 1 lot only (minimum quantity).

Thanks
rip07
 
vijkris

vijkris

Learner and Follower
#626
#626
useful post.

Mungus said:
There are only 2 ways to trade Such Days-

1)Trade VWAP/AMA/ADN
ie.,Play Boundaries

or

2)Remain SOH

If someone trading Pivot today and getting stopped out and thus blamming like Pivot not working,then they dunno what they are doing.

We have to identify whether the market is in a trend mode or range mode.And if we could figure out that then any Tukka Entry also will make us money.(because Tukka Entry wont be anymore Tukka Entry)

Some friends here who are struggling with pivots method should try getting their hands over VWAP or Market Profile concept.
Why?
1)Because market remain in range 80% and only 20% trend plays.Many people lose the big chunk in range market and when a strong trend setup begins they dont dare to pull a trigger and blame like Pivot Not Working :D

2)VWAP/MP like concepts gives us the opening idea that where the market is likely going..
Everyday is not a Pivot Day,it could be a range day.ST dada also said ki consider every day as a range day and see how its reacting to those levels and then take a trade accordingly.

and yes,Pivots do work,but only in trending market.
And VWAP like concepts serves better for range market.

Happy Weekend on a Happy Note.
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Mungus said:
1)We have ST Dada's post on-How to identify trend market and range market.(I think it has in Candle's Thread).
2)IF previous day is a strong trend day or simply a crazy fall-strong rise then next day is expected in range/consolidation/tuktuk/pingpong.

Isn't that happened today also??

Rest all is VWAP Logic naa.
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sherbaaz said:
one simple way of finding whether its going to be trend day or not (strong trend day) look for the range of floor pivots (from R1 to S1) if current day's R1S1 range is completely inside the previous day R1S1 range expect strong trend day. it wont happen on many days but when this happens we have strong trend day

regds,s
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Last edited:
vijkris

vijkris

Learner and Follower
#628
#628
Mungus said:
Signs of a Strong Trend Day-



How to Identify a Range Market-
(...........)
Click to expand...
though personally I agree with all the points above, but amibroker will understand 1st and 5th point only . :D
that's y wanted more objective clarification. need to check sherbaaz's post abt floor pivots. never used it.
 
Mungus

Mungus

Well-Known Member
#629
#629
Trading is Subjective.
As per your system you are SOH but I may get 3 trades.Above are the facts which are Objective but the opinions could be Subjective.
And IF we trading the same system still we’d have different entries like-
You’re long above a Pivot
I’m taking a Pullback
Some other guy looking at a BO there.

VWAP/AMA/ADN is more Subjective in nature.
If we put all of three on a chart then-

1)VWAP says-Above 1SD is Long
2)But what IF the price is in AMA Band?
3)And it’s below the ADN box??
4)And we have resistance at VAL also?

I gave it a lot of thought and came up with more than 20 combinations, but finally realized that-
You have to just pick any one combination and play it confidently.

So,there's no such thing as Objective Clarification in Trading.What kind of trader are you?Thats the clarification itself..
 
XRAY27

XRAY27

Well-Known Member
#630
#630
ST da post for picking Range markets...this may help you to get reasonable structure of MHT for getting the view on trending/range..

With in that you can use Bands/vwap/oscillators/zones... for me Zones are my strength


How to recognise Sideways and Trending markets

Trending and sideways phases are cyclic in any market and after a trending phase expect a sideways phase and after a sideways phase expect a trending phase.....if there is anything certain in the markets ...it is this.



Traders make money in trending phase and give it back in the sideways phase....sometimes they loose more in sideways phase. Every trader has to understand how he is going to negotiate the sideways phase so that he makes some money in it or at least preserve what he has made in a trend and again ride the trend when the market starts trending again...

How do we know that we are in sideways markets ? The charts will indicate that. I have taken an example of Nifty Futures 5 min chart.....we had a nice downtrend till point A , then we had an upmove upto point B.....the first indication of sideways market came when at point C market was unable to take out point B...then D,E,F,G all sideways moves till we get a breakdown of the range.....

Traders handle sideways phase in different ways depending on what he is comfortable with ...various ways of handling sideways phase are as under :

1) If you are a range trader, trade the extremes of sideways range....buy near the bottom of the range and sell near the top....

2) Decrease your volumes in sideways phase and increase back to normal volumes when trend starts.

3) Trade on sideways market indicators, oscillators, Bollinger bands extremes etc

4) Totally stay away in sideways phase and trade only trending phases....


So in this range either trade the extremes or just stay out and dont loose your capital and energy trading sideways markets......get on to trends when they start again.....

Smart_trade
Click to expand...
 
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