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Nifty 15 ema trading strategy by tradehunter
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6th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets.html#post642060
Hi Friends,
I will be posting my swing trading system here. As all of my other systems, this is again based on trend trading
and I will use only EMAs to trade, this allows to keep this system simple and easy to follow.
I will use it on Nifty futures only here however this system only and the timeframe I will be using is 30 mins.
The next couple of posts are blocked from future amendments or links.
Do leave your comments as I would like to know how many people are looking forward to trade my swing system
(I dont want to put a lot of effort in case there are not many takers).
Cheers SH
6th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-3.html#post642460
ok then ... here we go then....
This strategy is highly inspired by Dow theory and Elder's greaters fools zone. The Dow theory defines a a trend
as a sequence of higher highs and higher lows (bullish trend) and lower highs and lower lows (bearish trend).
Elder's greater fool zone has already been covered by me in one of the previous threads. It explains how markets
tend to revert to mean (ie correct back to a particular EMA) after it reaches a point far away from the EMA.
Basically when markets are trending, they tend to trend till they hit extremes, then correct back to value zone
..and then start the trend again.
Our jobs as swing traders are to:
1. Identify the trend as well as trend reversals early.
2. Identify when the markets have trended to extreme zones
3. Wait for enough pullbacks before we enter the trend again.
We will cover all the above 3 gradually as we evolve this thread.
First things first, what all do we need on charts as indicators. We need to plot:
1. 15 EMA on 30 mins nifty futures charts
2. SMA envelope (17 SMA, 1.5 % deviation)
Now coming back to the 3 things we need to do as swing trader using 15 EMA and envelope as stated above:
- How to identify trend and trend reversal
As stated above, a trend is a sequence of higher highs and higher lows (or lower highs and lower lows). For the
sake of this strategy, in a bull market, a lower high will be defined as a correction to 15 EMA after making a new
high. If the correction does not reach 15 EMA, we will not consider any low made during that correction as lower
high... our lower high will stay at the point where 15 EMA was last touched. A higher high is obviously a high
made above previous high.
Similarly, in a bear market, any correction going upto 15 EMA and then falling to new lows would mean a lower
high made..any other rallies that cease before 15 EMA is touched will not be considered at lower high.
If we see markets making highs, then pullbacks to 15 EMA, then making new highs, then again correcting to 15
EMA and then making new highs again .. we are in bull run. Each successive 15 EMA retest makes a higher low,
We will call the higher low as 'bull SAR'
Similarly highs made around 15 EMA in bear trend will be called 'Bear SAR'
Trend reversal is whenever a bull SAR or bear SAR is taken out, we reverse to opposite position.
I will post some charts to explain bull SAR and Bear SAR in detail before talking about entries, SL and targets for
this strategy.
Till that time, digest above
Cheers
SH
7th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-3.html#post642482
Nifty futures charts for last 20 days (15 EMA and 30 mins)
all red dots are proper corrections to 15 EMA after making a new high (sometimes markets correct to go below
15 EMA, thats ok). As you can see, each red dot has made a higher low so each red dot makes a bull SAR.
A breach of bull SAR (i.e markets dropping even by 1 point below bull SAR) triggers trend reversal and shorts are
triggered.
Currently the bull SAR is at 5232 (lowest point between previous high and current high) . Today nifty touched
5398 before falling to 15 EMA and making 5333 low.
If nifty was to make a new high above 5398 tomorrow, it would mean todays 5333 would become a new bull
SAR.
If Nifty keeps falling and goes below 5232, it will mark the trend reversal and shorts will be triggered.
Please understand the above charts.
Tomorrow I will post about when to enter, book profits and pyramiding etc.
Cheers SH
7th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-4.html#post642657
Quote:
Originally Posted by ptk
Dear SH,
I think there is a small correction in your writeup and on the chart also, please correct me and forgive me if I am
wrong. I have made the changes below:-
QUOTE
As stated above, a trend is a sequence of higher highs and higher lows (or lower highs and lower lows). For the
sake of this strategy, in a bull market, a higher low will be defined as a correction to 15 EMA after making a new
high. If the correction does not reach 15 EMA, we will not consider any low made during that correction as
higher low... our higher low will stay at the point where 15 EMA was last touched. A higher high is obviously a
high made above previous high.
UNQUOTE
Similarly on the chart, it should be "Bull HL" instead of "Bull LH"
Many thanks for sharing the strategy and I am looking forward to trade this setup.
Regards,
ptk
Yes thanks for pointing that out....was writing up the post late at night after a hard day at work and a few drinks
down...
Cheers
SH
7th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-4.html#post642659
Currently Nifty has made a new high so bull SAR has indeed moved to 5333
short will trigger below 5333
I will post more about profit booking zones and re-entry/pyramiding zone.
Cheers SH
7th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-5.html#post642696
Quote:
Originally Posted by lvgandhi
do you consider making a high or closing at high.
Just making a new high is enough ...close doesnt matter.
Cheers SH
8th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-6.html#post643025
Quote:
Originally Posted by mysticalrun
hello sh,
thank you for new masterpiece.lots lots of thank sir,
now as according to it ,nifty today breached bull hl,so now its in sell mode in 30 mins , am i right? i am saying
about nifty spot.
Mystical - at the start of the thread I said this thread if for nifty futures
Nifty futures longs still intact bull HL 5332
Cheers SH
8th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-6.html#post643029
Quote:
Originally Posted by mangup
Dear SH,
I have few queries. Kindly do reply.
1. What is the logic of deciding 30 min candle, since 15 min may be better as per me (keeping in mind that all
the candle are of full 15 min). In 30 min we have one candle which is not having full 30 min data. Will it not
distort the indicators/EMA/Envelopes?
2. In this strgty u suggested to use 15 EMA & 17 SMA envelope. Will this EMA-SMA combo will be in sinc or it has
to be EMA-EMA combo?
3.From the chart i observed that somewhere we have gone below 15 EMA thereby hitting Bull SAR suggesting to
reverse the trend. But the Bull SAR mark is lowered can u pl clarify whether some filters are used to mark the
Bull SAR or it is to be more visual?
1. doesnt matter that much ...I have chosen 30 mins becuase thats what suits me .... if you are comfortable with
15 mins you can apply the same strategy in 15 mins. For that matter intraday players can apply this on 5 mins
too. The only thing to keep in mind while shifting to a lower timeframe is that stoplosses will be small but
whipsaws can be higher.
2. I just have access to SMA envelopes so i use SMA. Never tried with EMA envelopes so cant comment.
3. please tell me the date when you see bull SAR getting hit.... please understand just going below 15 EMA
doesnt mean bull SAR is hit ... bull SAR is the lowest point made after testing 15 EMA .....
Cheers SH
8th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-7.html#post643050
Quote:
Originally Posted by VJAY
Dear SH,
Awaiting your entry/exit/adds rules?...are you using any filter for reversing trade?
entries i have already posted (break of bull HL or bear LH) .. in current case bull HL is 5332 so a brak of it means
square of longs and open shorts.
Exit and add rules later today.
Cheers SH
8th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-7.html#post643431
Quote:
Originally Posted by vinst
5340 (yesterday's low)
Fantastic Vinst...spot on with 5340
Candle close doesnt matter as i posted previously.
Bharti airtel gave a whipsaw...part of the game!
Cheers
SH
9th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-8.html#post643768
ignore freak lows .... just look at normal lows and highs.
Unfortunately have been keeping very busy so havent been able to post additional rules yet. Hopefully over the
weekend will do it.
Cheers SH
9th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-9.html#post643883
Quote:
Originally Posted by amol_gh123
Todays new HL 5343.90
..Amol
New high made so bull HL shifted to 5343 ...
Please note how the mkts have closed at 5440+ with bull HL at 5343 (100+ point difference).
So if mkts were to reverse tomorrow and hit 5342 to trigger our shorts we would have lost 100+ points from the
peak.
this is where exit zones (greater fool's zone) based on 30 mins charts comes in handy. (already covered in a
separate thread). And this is the profit booking strategy here under this thread (you can also use 3 EMA
reversal sometimes to book on gap ups etc)
I will post about how to re-enter and how to pyramid over the weekend.
Till then enjoy your best friend ..the trend !!!
Cheers
SH
9th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-9.html#post643980
Dear SH,
I am posting the chart of Gold for learning purpose.
Sorry for the poor markings as my comp knowledge is limited.
Pl discuss,how u would have traded this chart.
Initially Long SLR was triggered & Then Short SLR was also triggered without much profit & then again Long was
stopped.
Have i understood yr method correctly.
10th February, 2012
Quote:
Originally Posted by rangarajan
Dear Vinst,
After the firstSAR for long, the stock pulled back to 15ema & again traded below the previous LL.
Hence the logical s/l for short should be 1747 & not 1752.
If it is correct,this s/l was taken & trade reversed to Long once again.
I had marked it with an up arrow.
For Long,the SAR to be 1724.
Stock went upto 1751 w/o triggering 1724.
My query is whether it is correct & if so whether the TWO failiures were part of the trading?If so,how to protect.
Pl discuss.
While gold broke the low then retraced to 15 EMA and then broke the lows again .. clearly all those candles are
sideways moves and not trending moves....
So gold SAR stays at 1752....
however since now the range has been broken and gold has made fresh lows..you can shift the SAR down to
previous lower high.
Cheers SH
10th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-10.html#post644427
Quote:
Originally Posted by mangup
Dear SH,
I think what i undestood from the rule if Bull SAR is nothing but the retest of prices when it touches 15 EMA &
making it is higher high in bull trend. This makes our Bull SAR.
For eg.1 on 6th (12:30 pm candle) low touches 15 ema so low=5346.50 is our bull sar. Then 6th (3 pm) it
breaches this prev bull sar. Should we have to reverse here.?
one more eg.2 on 7th (2pm) low hitted 15 ema so low=5373 is our bull sar. next subsequent 3 candles closes
below our bull sar. Should we assume our bull sar is hitted here.?
One more eg.3. on 10th (12 pm) low hitted 15 ema. next candle closed below low should we assume this hitted
our bull sar.
Kindly clarify my understanding.
Hi Mangup,
Just hitting 15 EMA does not mean it is a SAR... SAR is lowest point with 15EMA touch between two higher
highs... refer attached image...unless previous higher high is not broken by another higher high, u can not call
candle touching 15 EMA as SAR.. i hope this clears ur concept of SAR...
..Amol
11th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-11.html#post644881
Quote:
Originally Posted by rajesh pawar
Traderboy...
On 3rd when the bull SAR is breached and you have entered short then that same point does not become your
bear SAR. Bear SAR is the high formed between two Bull SAR. In this case bear SAR is the high formed at
opening bar of 2nd.
absolutely right rajesh, when bull sar is hit the previous peak becomes bear sar (843ish in this case). However its
not necessary to be the highest point between two bull sars ..its just the previous high made by pulling up to 15
EMA.
To explain my point, please look at the right hand side of the charts posted for RIL, if RIL falls and breaks bull sar
at 839ish .... the bear SAR will be 10th Feb high and not 8th Feb high....however if the difference between 8th
Feb high and 10th feb high is very small ..it becomes kind of double top hence its sensible to keep 8th Feb high
as safer bear SAR
Cheers SH
12th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-12.html#post645064
]
horizontal white lines show the new high made so take previous low can be made our bull sar.
Trader_boy
12th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-12.html#post645103
Dear all - adding the Exit, re-entries rules.
Pyramiding later.
Exit rules when trade running in profit
We have to follow the greater fool zone strategy here. Please see this post to understand it more.
http://www.traderji.com/technical-an...tml#post612691
We book profits when greater fool's zone is hit or hedge by buying some options that can be exited when nifty
corrects to touch 15 EMA. I personally do not exit when the GFZ is hit first time(this happens after first
breakout), however start exiting from second time.
Profits should also be booked in case 3 EMA has not touched the daily candle in two consecutive days (3EMA
reversal rule)
Re-entries
Once profits have been booked due to GFZ (greater fools zone) hit, re-entries should be done once 15 EMA has
been retested. However to ensure that we do not get trapped into a correction that started from GFZ but is going
to hit the SAR, we have to ensure that the markets show signs of taking support at 15 EMA and then only we re-
enter.
So we need to look for strength being shown near 15 EMA to re-enter. I follow a simple rule here, once 15 EMA is
touched by a 30 minute candle, I wait for the first green candle to close above 15 EMA after the candle that
retested 15 EMA. the candle which retested 15 EMA is irrelevant, we need to wait for the next green candle and
then we re-enter. The SAR stays as per the system and moves up only after a new high is taken out.
Please see below chart to understand re-entry.
Please review the method properly and the trade. Like any other method this one is no holy grail, it will have its
whipsaws every now and then and the key will remain to be consistent, patient and disciplined.
Since 1st Jan we have been in an extremely rare uptrend so any trend following method (including this one)
would look magical ... please dont get overexcited over this method ...trade safe with sound money management
rules and dont overleverage ....
Happy trading and Cheers !
SH
13th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-14.html#post645360
Quote:
Originally Posted by Tradewithhunter
absolutely right rajesh, when bull sar is hit the previous peak becomes bear sar (843ish in this case). However its
not necessary to be the highest point between two bull sars ..its just the previous high made by pulling up to 15
EMA.
To explain my point, please look at the right hand side of the charts posted for RIL, if RIL falls and breaks bull sar
at 839ish .... the bear SAR will be 10th Feb high and not 8th Feb high....however if the difference between 8th
Feb high and 10th feb high is very small ..it becomes kind of double top hence its sensible to keep 8th Feb high
as safer bear SAR
Cheers
SH
Hi all,
I would like to amend the above.... the SAR will have to be the highest/lowest point and not just the last 15 EMA
touch ....
Rajesh arora is absolutely right.
Cheers
SH
13th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-14.html#post645366
Quote:
Originally Posted by techtrader2
SH based on your experience how many points can we make in Nifty per month using this strategy? Also how
many trades in a month and what is the winning % of trades?
Thanks
Techtrader - this depends on what phase the market is going through.... during times of good trends, one single
trade can give 200-300 or more points....
I personally trade all my strategies together (swing, 315, market correction prediction) so my personal results
may differ.
However if one was to trade this strategy from March last year till now, the person should be sitting on around
3000+ points profit per lot.
Cheers
SH
13th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-14.html#post645419
Quote:
Originally Posted by VJAY
Ohh sorry attached wrong quote...
I would like to amend the above.... the SAR will have to be the highest/lowest point and not just the
last 15 EMA touch ....
Rajesh arora is absolutely right.
Want to clear this ...
Ok let me explain....
Lets see current trade ... Nifty longs with Bull SAR at 5342 ... nifty recent top is 5450.95 ......
Lets assume nifty makes a new high now above 5450.95... the bulls SAR will move to the lowest point between
5450.95 and the new peak i.e 5350
OR
Lets assume nifty crashes now and takes out Bull SAR 5342 ...shorts will trigger our bear SAR will be the highest
peak made i.e 5450.95
Cheers
SH
14th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-15.html#post645675
Quote:
Originally Posted by amol_gh123
Hi SH,
As per your sheet, on 7-Mar-11, there was a short from 5480.. agreed .... but as per chart attached SAR would
have been 5552 ... but u have considered 5421 as SAR.. even though new low was not formed... can u plz
explain for better understanding.... is it like, if new low is formed consider latest 15 EMA touch and forget the
highest point between two lows....
..Amol
my charts showed new lows at previous days new lows and the next gap up to 15 EMA before making fresh lows
...so SAR 5421
If that is not the case, SAR will stay at 5552.
Cheers
SH
14th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-15.html#post645676
Quote:
Originally Posted by VJAY
Vjay - gap up above our SAR so we exit shorts immediately ... but opens in GFZ, so we wait and enter longs at
15 EMA touch.
Cheers
SH
14th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-16.html#post645677
Quote:
Originally Posted by VJAY
Dear SH,
how you traded this chart?...25th we are long ..SAR @ whiteline...here on how you would trade....no new high
after that...if we exited @GFZ then clear cut reentry @11.30 of 31st...here are we wait for hit our SAR?
Yes unfortunately.
What I do usually is after massive rallies and gap ups (SAR moves far away) I book profits in futures and take
positions in options, that locks in some profits and reduces heartburns if SAR is hit.
you would also see these 2 days were when 3 EMA was not touching for 2 consecutive days so another strong
reason for booking profits and waiting for 3 EMA to get hit.
Cheers
SH
14th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-16.html#post645678
Quote:
Originally Posted by VJAY
This is extreme trend and yes after we book profits it will be the case of missed opportunity since it keeps falling
without coming to 15 EMA ... but this doesnt happen often so worth sticking to the rules in long run.
Cheers
SH
14th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-17.html#post645817
Quote:
Originally Posted by amol_gh123
Thanks such for ur kind support...
SH as per ur sheet short initiated on 11-Jul-2011 @ 5615.. perfect
but for me as per chart, SAR 5515 got hit on 29-Jul-11.. and the trade turns into Long closing short... this going
Long trade gave whipsaw and gave 51 point loss...why u didnt u close that position on 29-Jul ???
In ur case u close this position on 29-Aug @ 4888... even for me that is not SAR.. it would be 4970.55 (chart
2)... totally confused now
..Amol
chart 1:
Chart 2:
Sorry my office firewalls block the charts posted but I just looked back on my charts...
5615 shorts on 11th July with SAR 5735 .... Nifty made a low at 5503 next day but 15 EMA not touched
anywhere so SAR stays at 5735
Nifty stayed in this range (5735 to 5503) and finally gave a new low on 28/7 hence bringing down the SAR to
5711 (25th July high)
you are right that trade was closed at 5515, longs initiated and then reversed to shorts with 60 point loss. From
5450 shorts again and nifty fell to 4721 non stop...
Pardon me I missed that trade .... I just created that sheet in a hurry yesterday manually ....
When you trade live with me ... you will understand the results better.
Cheers
SH
14th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-18.html#post645983
Quote:
Originally Posted by KID_of_MARKET
High is taken hence stop shifted to 5350
Yes, what is frustrating about last 3-4 days is that we have hit new highs 3-4 times but the bull sar has only
moved 20 points up ....this is becuase each recent low has been higher than previous low but very close to it ....
Lets see if we can get another correction to 15 EMA now and then a new high which can move our SAR in 5400
range
Cheers
SH
15th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-18.html#post646165
Nifty makes a new high now around 5500 ..bull SAR still at 5350.... GFZ above 5525 currently...
This swing started at 4821 so around 680 points profit (530 points locked in) ... this excludes any additional
profits due to booking at GFZ and re-entering at 15 EMA.
Cheers
SH
15th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-19.html#post646196
Hi all,
Lets try and follow the same strategy on 5 mins charts too for traders who want smaller stop losses .... no
greater fool's zone and this method should be followed on just SARs.
5 minutes trade: current longs with bull SAR at 5395
30 mins trade: current longs with bull SAR at 5350
Cheers
SH
15th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-19.html#post646243
Quote:
Originally Posted by NTrader42
Hello SH
for 5 Mins, should it be traded only in intraday mode, without carrying position to next day?
Thanks
NT
Can be carried....
16th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-23.html#post647068
Quote:
Originally Posted by NTrader42
SH
For the 5 mins system, How about taking trades only in the direction of 30 Mins swing trade ?
Effectively becomes a nice system to sacle-in / scale-out with the swing trade.
Thanks
NT
Yes can be done.
I am running with 5 mins experiment here in forum to showcase why I always recommend trading on larger TFs
cheers
SH
16th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-24.html#post647145
Quote:
Originally Posted by Bakul Shah
Sir,
How about working with 15 min period. It may better result than 5 min!!!
Bakul
Yes, 15 is worth trying ..... (no experiments here)
If SAR on 30 seems to be too high ... 15 can genuinely be pursued (i personally do look at it while trading)
15 mins - longs booked at 5517 today (4888 to 5517 profit 630 points)
This short has SAR 5566
Cheers
SH
24th February, 2012
http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-
markets-28.html#post650552
Quote:
Originally Posted by thanibee
Is the bear SAR at 5541.8 now? Since it has expired (Feb. Futures), and we will be using March futures data from
tomorrow, how is this going to affect? March Futures Bear SAR is 5591.25. Which one should we use as the SAR?
Thanks
In such cases please refer to spot prices.
Nifty spot has made a new low today so 5537 spot becomes new SAR.
However on NF March charts recent highs are 5563 highs so you can use either 5537 spot or 5564 NF as new
SAR
March series shorted from 5639 SAR 5564 now
Cheers
SH