Retracement strategy, a must for traders.
Trading strategy that works wonders besides the supports & Resistance is " Retracement strategy ": The strategy that has wor...
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I 'll always be there for you. To make you feel that you're secured. And even if the rain is pouring hard and the sky is almost dark... -
5010-5039 supply zone proved a ST resistance. 5002 proved a break down point. 4945 to 4982 proved a corrective rise, monitored with an ... -
Trading strategy that works wonders besides the supports & Resistance is " Retracement strategy ": The strategy that has wor...
10 comments:
Namaste Ilango Sir & Blogmates,
Nifty consolidated in narrow range with bullish momentum intact; Option Analysis for 18-01-2012
Duplicated at Wordpress Site
Thanks & Regards,
Sanjay Kr Jaiswal
Vanakam Ilango Sir & Blogmates,
Trade Plan for 19th Jan.2012
Today market started moving down wards from the day high of 4981 and touched low of 4931 which may be labeled as Wave A totaling 50 points.
The up movement of B subdivides into abc, in which
'a' is 4931 to 4966 = 35,
'b' is 4966 to 4945 = 21 and this in turn implies
'c' is either 100% of 'a' or 138% of 'a' which may be 35 or 48 and thus 'c' may terminate
either at 4980 or 4993.
Since we are analyzing 'B' and it happens to be irregular correction, 'B' may terminate at the maximum of 125% of A and this may leave us a target of 63 points from 4931 and thus it may terminate at 4994.
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For Labeling of NIFTY Chart on 18th Jan.2012
refer to my Blog.
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CONCLUSION
From the movement of today market , the possible Trade Set up exists @ 4994 to initiate short. By entering at this level with stop loss of 10 points that is 5004, one may expect 50 points towards down side at 4934.
In case tomorrow morning if market is not crossing more than 4980 one may expect more than 50 points in down side. In this case the Stop Loss Price is 4997.
In case market opens down side trade set up exists @ 4933 /4920 with Stop loss price of 4910.
Dear ILLANGO ji,
For past MANY DAYS , I 've tried various methods Classic TA , FIBBO, EW , Even GANN to come up with an IDEAL trading system to suit my personality.
Spent 4 months mastering EW, but was not very successful using EW on daily basis.
My Relative failure with EW, made me search for the PERFECT TRADING SYSTEM for past 6months , led me to ur BLOG JUST NIFTY & for the past few days I have been assimilating ur SYSTEM.
Today as i was travelling back home , the Engg Mathematics "Keeda" woke up & something CLICKED in my mind ...
A SYSTEM that would :
1. MODEL Price by a PARABOLIC REGRESSION EQ like GANN,
2. Trigger Entry using Illango's JNSAR & Murphy 5-9DEMA ribbon
3. Exit based on RATE OF CHANGE, DIFFERENTIAL MATHEMATICS (dy/dx) ...... :-D
With great pleasure I present to you my MODIFIED SYSTEM ..
inspired by Shri. Illango's JNSAR , GANN's Sq of 9s & Murphy 5-9EMA System
STEP I Data Acquisition Prev 5 DAYS
High, Low & Close
STEP II Data Processing:
1 Calculate 5DHEma
2 Calculate 5DLEma
3 Calculate 5DCEma
STEP III Mathematical Modelling:
1 Find the Parabolic Regression Eq. of Best fit for the 5DCEma pts
2 Update the Equation with the Last 5EMA pt every day
3 Thus @ any pt in time , we have a Curve with y=a*X^2 + b*X + C
4 Calculate the SLOPE of the Curve (dy/dx)
5 Calculate the Rate of Change of Slope 2nd Degree Differential (d^2y/dX^2)
STEP III Trade Entry / Trigger :
1 Start from any OUTLIER PT (price close above DHEMA or Below DLEMA)
2 Suppose we Start from Pt A @ 5100 on 07th Dec'11
3 Price Closed Below DLEma on 9th Dec'11 & 5-9 DEMA -ve Murphy Cross Over was seen. TRIGGERED A SELL !
4 Say we SELL @ Day Close i.e 4857
STEP IV Trade Analysis:
1 As per Illango ji's System, we carry SHORT positions as long as price closes below DHEma. So we track the price every day @ close
2 @ Next day , we carry SHORTS if ALL THE BELOW CONDITIONS are satisfied :
i Price closes BELOW DHEma
ii @ Next Day, near closing say @ 3:00pm, RECALCULATE the CURVE by ADDING that Days EXPECTED CLOSE & Remove OLDEST Price Data(5Day OLD)
iii Calculate SLOPE OF CURVE dy/dxi.e 1Dy
Calculate RATE OF CHANGE OF SLOPE i.e & 2nd DEGREE DIFFERENTIAL( d^2y/dx^2) i.e 2Dy
iv If 1Dy MAINTAIN its SIGN i.e is -ve, check 2Dy if +ve or =0, CARRY SHORTS
If 1Dy MAINTAIN its SIGN i.e is -ve, check 2Dy if -ve, WARNING IMPENDING REVERSAL
V If 1Dy CHANGES its SIGN i.e is becomes +ve, irrespective of 2Dy , COVER SHORTS (Book Profits)
This pt B , appears on 21st Dec'11 .. Close price is 4693
RESULT: NET GAIN IN TRADE : 164 pts
SAME SYSTEM CAN BE REPLICATED FOR A BULL CASE!!!
The attached image is for a BEAR CASE .
Pls note, we can FORTIFY THIS ALGO EVEN FURTHER with PSAR & EW & FIBBO & TLs !!!
DRAWBACKS OF THIS MODEL : (i) One IMEMDIATE DRAW BACK is the MODEL works with MODERATE VOLATILITY ONLY. It wont work on 10% UPPER or LOWER CKT DAYS!!
(ii) Scratchin my head for any other lacuna :-P
Pls read this ALGO & pt out flaws if any or IMPROVEMENTS.
I will shortly model this in EXCEL or try and write a Quick Code for Auto Trade trigger Simulation (as & wen time permits, hope this weekend)
IF CORRECT, THEN EXCITING TRADING DAYS LIE AHEAD !!
yours
SMO
@SHRIRAM,
Great effort to build a mathematical to predict market movement. MACD and Stochastics are also build on the basis of Moving averages.
In your model, if my understanding is correct, you are incorporating rate of Change
(People Fear and Greed) and slope of the curve (Intensity of Fear and Greed)
it may work better than MACD and Stochastics. I pray to God to give you strength and willingness to complete this project at the earliest so that it could be back tested in this Blog by many expereienced traders.
It is a great effort and once again I wish you all the best to achieve the desired result.
@shriram
My condition after reading your comment :D
http://www.desicomments.com/dc/24/58150/58150.jpg
@ Shriram,
excellent effort to get nearer to perfection.
As a human being it drives me crazy to get in details of
outcome.
I am waiting Illango Sir comment on your proposed method.
Good Morning Ilango Guruji and all blog mates.
@Jayaraman, thanks for your excellent guidance for
today's trade plan.I sincerely appreciate your efforts
to guide new blog members like me.
@SANPOT,
You are welcome.
Thanks Jayraman ji,
Illango ji--> Can u pls check the ALGO ??
rgds
SMO
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