iCharts Discussions

TLS2010 · White Belt Joined: 30 Nov 2010 Posts: 37

Hi,
In my search for the most optimum MA crossover to catch the swing high and swing low, I found the best one suited was the 3 DMA. (3 Days Moving Avg.)

Let me explain it in brief:

This strategy is based on monitoring the weekly charts (any instrument) by using the following indicators:
a) SMA, Open, 3 Days
b) EMA, Close, 3 Days

We all know that when Closing prices are higher than Opening prices it is considered bullish. Use the above parameters to see the crossover on wkly charts.

The Strategy:
a) Long entry: When EMA (Close, 3) line crosses above SMA (Open, 3) line on the wkly charts then we look for the same setup on Daily charts and wait for 1-2-3 pattern to form on daily charts. Most of us know the famous 1-2-3 trading strategy. so we use it to go long on the break of # 2 for target of distance equal to #3 & # 2. Liquidate 50% of the position when 1st target is reached and use the trailing stop loss as the SMA line for the rest 50% position.

b) Short Entry: When EMA (Close, 3) line crosses below SMA (Open, 3) line on the wkly charts then we look for the same setup on Daily charts and wait for 1-2-3 pattern to form on daily charts. We go short on the break of # 2 for target of distance equal to #3 & # 2. Liquidate 50% of the position when 1st target is reached and use the trailing stop loss as the EMA line for the rest 50% position.

Caution: This strategy works best when the direction of both the lines i.e SMA & EMA on Daily charts match with their direction on wkly charts.

Aggressive traders can ignore wkly charts and trade only the daily chart SMA/EMA lines crossover with 1-2-3 pattern. The only restriction is that you should wait for both the lines angles to point in one direction only. This is required so that we avoid getting trapped in sideways mkt.

I have observed this to be a very consistent strategy in identifying swing high and swing lows. Combine this strategy with your knowledge of candlestick at support/resistance levels and you have a high probability setup. Hence you can be part of the rally ahead of the crowd.

Wish you all a very profitable trading with this strategy.

-Lawrence. Sequeira

maooliservice · White Belt Joined: 04 Aug 2010 Posts: 93

Dear Sir,

Will u pls explain 1-2-3 pattern strategy.If possible with the charts

Best Regards

Mohan

TLS2010 · White Belt Joined: 30 Nov 2010 Posts: 37

Hi Mohan,
Thanks for your interest in this strategy. For your reference I have attached the explanation on the 1-2-3 system and also attached proof of how this system has performed on Nifty. It works on every instrument, including Commodity, Currency, Stocks.

Let me know - how it works for you.

Wish you a profitable week!

-Lawrence Sequeira

smith06 · White Belt Joined: 05 May 2009 Posts: 12

Thanks for a great strategy. Very Happy

SwingTrader · Posted: Mon Aug 29, 2011 1:03 pm Post subject:

TLS2010,

Please remove your email address from the attachment and repost it. Any type of contact details are not allowed in the forum.

SwingTrader · Posted: Mon Aug 29, 2011 1:09 pm Post subject:

TLS2010,

Looks like one of our admin people have already edited your attachment and re-posted it. Kindly make sure you do not include your contact details in the attachment or in your posts here.

Thanks.

kamal.icharts · Site Admin Joined: 10 Apr 2013 Posts: 576

Dear Member,

Please ensure that you do not put your contact information even in the attachments. We have removed your email id from the document you had attached and have uploaded the revised copy of the document.

Thanks for understanding.

Regards

Kamal

TLS2010 · White Belt Joined: 30 Nov 2010 Posts: 37

Dear Administrator,

Apologies for the same, I was unaware about this rule. Will take care in future.
Thanks!

-Lawrence Sequeira

solanki · White Belt Joined: 12 Feb 2007 Posts: 155

solanki · White Belt Joined: 12 Feb 2007 Posts: 155

solanki · White Belt Joined: 12 Feb 2007 Posts: 155

TLS2010 · White Belt Joined: 30 Nov 2010 Posts: 37

Hi Solanki,

As per the wkly chart of Yes Bank we see that stock is resting at channel support levels, so we need to be a little cautious here before blindly executing short-sell orders, since the ema/sma crossover is showing downtrend on wkly charts. Secondly we see there are long wicks seen at support, this suggests there is a bit of buying support coming here. So we have a second reason not to short yes bank.

If you still insist on a trade suggestion then I will need the daily chart of Yes bank.

Thanks!

-Lawrence Sequeira

solanki · White Belt Joined: 12 Feb 2007 Posts: 155

solanki · White Belt Joined: 12 Feb 2007 Posts: 155

TLS2010 · White Belt Joined: 30 Nov 2010 Posts: 37

Yes Solanki,
You observed it right, this 3 bar ema/sma crossover works in all time frames.

It is based on the premise that bulls and bears fight has been going on for the past 3 bars and the conclusion is the closing prices. closing prices tell us who is stronger. also it is important to note that this crossover is more powerfull at a prior support/resistance level. So 3 bar MA crossover with candlestick knowledge is a good weapon to execute this strategy with confidence.

Please do paper trade for about a week and let me know your results. I would be glad to hear people are making money using this strategy - which is so very simple to use.

Happy Trading!

- Lawrence Sequeira