Thursday, September 2, 2010
JNSAR - a Stop And Reverse Trading method.
Trading based on JNSAR:
JNSAR is a number based on market's strength and weakness as well as the balance of demand and supply. Whatever the number may be, a choppy market could whipsaw the number occasionally to shake off your confidence in them. However, staying with one method brings you consistent winnings.
Step:1: As the JNSAR for yesterday was 5468 and the previous trade taken was a sell @ 5483 on 25.08.10, the moment Nifty breached 5468 yesterday, you close out your earlier short and take a long position in minimum 2 lots - Stop and reverse (SAR).
Step:2: If after triggering a reversal trade @ 5468 and markets fall again, you do not change the trade on the same day as JNSAR is done only once a day but do so only the next day based on next day's JNSAR. (Risk averse could have a Stop loss in extreme choppiness but the essence of JNSAR is to keep the trade once triggered and manage it the next day only. If and when such extremes take place, I'll be around to alert you. This has not happened in the last 3 years).
Step:3:Once a new trade is taken in aminimum 2 lots, you book on one lot with a profit of 50, 100+ points and keep the 2nd lot till a reverse trade is triggered based on each subsequent day's JNSAR.
Step:4: After booking out on the 1st lot, if Nifty climbs back substantially and start to fall again, take a new trade again. For Eg: After triggering a sell @ 5483 on 25.08.10, Nifty fell to 5392 on 27.08.10 and the 1st lot was booked @ 5397 and on Monday, it rebounded to 5469 and started to fall breaking day's low @ 5441, another sell could have been taken and another profit booking would have been done. This step is optional and suited for the experienced.
Step:5: You may use the filter of 0.2% to 0.3% on JNSAR for 2 days once JNSAR new trade is taken to give the new trade a fighting chance & survive. For eg: For the new long trade taken @ 5468 yesterday, the JNSAR of today @ 5457 may be altered to minus 0.3% to 5441.
Step:6: Donot count your winnings. Stay focussed on each trade. I show the winnings in the table to show you that " I T I S P O S S I B L E".
Some readings are listed below. You will also find some write ups on it under "Always start trading with these"-step:6 on the side of this blog.
The Stop and Reverse (Known as SAR,) is a trend following indicator, that was developed by J. Welles Wilder. The Parabolic SAR is based upon the theory that a strong trend will continue to increase in strength over time, and will therefore follow a parabolic arc. The Parabolic SAR is displayed as a single parabolic line underneath the price bars for a long (upwards) trend, and above the price bars for a short (downwards) trend. The Parabolic SAR is displayed on the same chart as the price bars, and is the yellow lines in the example chart (full size chart).
Calculation
Trading Use
As the Parabolic SAR is a trend following indicator, it is only designed to be used in confirmed trends, and will give very bad results in a small ranging or sideways market. Entries are signaled by the start of a new parabolic arc, and exits are signaled by the price touching the parabolic arc. As the price touching the parabolic arc, is also the reason for the start of a new parabolic arc, the exit from the current trade and the entry into a new trade occur at the same time (hence the name Stop and Reverse). An alternative way of using the SAR might be to indicate the direction of the current trend, and then make entries and exits based upon another indicator (such as a momentum indicator).
More on SAR method.
JNSAR is a number based on market's strength and weakness as well as the balance of demand and supply. Whatever the number may be, a choppy market could whipsaw the number occasionally to shake off your confidence in them. However, staying with one method brings you consistent winnings.
Step:1: As the JNSAR for yesterday was 5468 and the previous trade taken was a sell @ 5483 on 25.08.10, the moment Nifty breached 5468 yesterday, you close out your earlier short and take a long position in minimum 2 lots - Stop and reverse (SAR).
Step:2: If after triggering a reversal trade @ 5468 and markets fall again, you do not change the trade on the same day as JNSAR is done only once a day but do so only the next day based on next day's JNSAR. (Risk averse could have a Stop loss in extreme choppiness but the essence of JNSAR is to keep the trade once triggered and manage it the next day only. If and when such extremes take place, I'll be around to alert you. This has not happened in the last 3 years).
Step:3:Once a new trade is taken in aminimum 2 lots, you book on one lot with a profit of 50, 100+ points and keep the 2nd lot till a reverse trade is triggered based on each subsequent day's JNSAR.
Step:4: After booking out on the 1st lot, if Nifty climbs back substantially and start to fall again, take a new trade again. For Eg: After triggering a sell @ 5483 on 25.08.10, Nifty fell to 5392 on 27.08.10 and the 1st lot was booked @ 5397 and on Monday, it rebounded to 5469 and started to fall breaking day's low @ 5441, another sell could have been taken and another profit booking would have been done. This step is optional and suited for the experienced.
Step:5: You may use the filter of 0.2% to 0.3% on JNSAR for 2 days once JNSAR new trade is taken to give the new trade a fighting chance & survive. For eg: For the new long trade taken @ 5468 yesterday, the JNSAR of today @ 5457 may be altered to minus 0.3% to 5441.
Step:6: Donot count your winnings. Stay focussed on each trade. I show the winnings in the table to show you that " I T I S P O S S I B L E".
Some readings are listed below. You will also find some write ups on it under "Always start trading with these"-step:6 on the side of this blog.
The Stop and Reverse (Known as SAR,) is a trend following indicator, that was developed by J. Welles Wilder. The Parabolic SAR is based upon the theory that a strong trend will continue to increase in strength over time, and will therefore follow a parabolic arc. The Parabolic SAR is displayed as a single parabolic line underneath the price bars for a long (upwards) trend, and above the price bars for a short (downwards) trend. The Parabolic SAR is displayed on the same chart as the price bars, and is the yellow lines in the example chart (full size chart).
Calculation
Trading Use
As the Parabolic SAR is a trend following indicator, it is only designed to be used in confirmed trends, and will give very bad results in a small ranging or sideways market. Entries are signaled by the start of a new parabolic arc, and exits are signaled by the price touching the parabolic arc. As the price touching the parabolic arc, is also the reason for the start of a new parabolic arc, the exit from the current trade and the entry into a new trade occur at the same time (hence the name Stop and Reverse). An alternative way of using the SAR might be to indicate the direction of the current trend, and then make entries and exits based upon another indicator (such as a momentum indicator).
More on SAR method.
Wednesday, September 1, 2010
Nifty picks up momentum on the rebound with a close above High Ema.
The Comment that made my day.
S S Cheema said...
thanks! And just by the way... tell that *ss to count me in that one percent...
Cheers
September 1, 2010 3:51 PM
Needless to say everyone defended with valid points and that is really heartening. Naanga velayadra edathula vandhu thondaravu pannadey.... (Don't disturb us where we play)..
I know there are many more in that 1% - some quiet & some vociferous.
I have not invented TA..EW..Ema, I repeat. So did all the machinery mfg.erers the wheel, piston, motors B U T they put together all of those components based on an idea and created something quite "Useful" and it becomes theirs.
We have put together such a system based on various "inputs" which alerts us to the change in the direction when most "tear their hair".. We ride the moves of all time frames... You have to choose the one that suits you. "Daily" is the best for most.
There is nothing like "going back to the school" to brush up on what we have learnt..it helps.
Correction, if any, or profit booking/ supply will be noticed in 5495-5515 zone depending on overseas clues.
Note how Nifty managed a climb above day high ema - that is momentum..Now for a follow up.
S S Cheema said...
thanks! And just by the way... tell that *ss to count me in that one percent...
Cheers
September 1, 2010 3:51 PM
Needless to say everyone defended with valid points and that is really heartening. Naanga velayadra edathula vandhu thondaravu pannadey.... (Don't disturb us where we play)..
I know there are many more in that 1% - some quiet & some vociferous.
I have not invented TA..EW..Ema, I repeat. So did all the machinery mfg.erers the wheel, piston, motors B U T they put together all of those components based on an idea and created something quite "Useful" and it becomes theirs.
We have put together such a system based on various "inputs" which alerts us to the change in the direction when most "tear their hair".. We ride the moves of all time frames... You have to choose the one that suits you. "Daily" is the best for most.
There is nothing like "going back to the school" to brush up on what we have learnt..it helps.
Correction, if any, or profit booking/ supply will be noticed in 5495-5515 zone depending on overseas clues.
Note how Nifty managed a climb above day high ema - that is momentum..Now for a follow up.
Nifty Intraday Update-II
Dear alpesh,
I have attempted to figure it out. It still not clear. There could be other possibilities. It fits well so far.You know the 1,2,3 waves from our earlier posts. SO I have given from 4th wave onwards. This "C" down can take many shapes. Lets follow it.
Market has established "5423 to 5444" range till now. Now trade the break out.
I have attempted to figure it out. It still not clear. There could be other possibilities. It fits well so far.You know the 1,2,3 waves from our earlier posts. SO I have given from 4th wave onwards. This "C" down can take many shapes. Lets follow it.
Market has established "5423 to 5444" range till now. Now trade the break out.
Nifty PreMarket View
Staying above "5432-Close ema", Nifty may attempt "5465-Highema" (May change as the highs are made today) on the back of positive global cues.
Those who carried the aggressive longs created at 5355 with a close above Day low ema @ 5400, may trade their position based on the "trading levels".
A filter of +0.3% can be added to JNSAR, if you wish. (5468 + 0.3% = 5484)
Those who carried the aggressive longs created at 5355 with a close above Day low ema @ 5400, may trade their position based on the "trading levels".
A filter of +0.3% can be added to JNSAR, if you wish. (5468 + 0.3% = 5484)
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