iCharts Discussions

[SwingTrader]

*** THIS STRATEGY IS A WORK IN PROGRESS, I WILL BE POSTING EXAMPLES AND MORE INFO OVER THE NEXT FEW DAYS ***

All concepts/examples are based on 5-min intraday charts.

BASIC CONCEPTS

This is basically a simple trend following system that makes use of my levels. The idea is to trade in the direction of the trend. Trades are entered on breakout/breakdown of short-term supports/resitances (swing highs/lows).

SWING HIGH : For the purpose of this strategy I am defining a swing high as any bar that has minimum two lower bars (lower highs) before it and minimum two lower bars (lower highs) after it.

There are variations for this concept. If there are two bars with same highs and there are minimum two lower bars before those two bars and minimum two lower bars after those two bars then high of those two bars is also a valid swing high.

SWING LOW : A swing low is any bar that has minimum two higher bars (higher lows) before it and minimum two high bars (higher lows) after it.

Similar to the variation of swing high, if there are two bars with same lows and there are minimum two higher bars (higher lows) before those two bars and minimum two higher bars (higher lows) after those two bars then the low of those two bars is also a valid swing low.

LONG TRADES : Go long on a CLOSE above the most recent swing high. If the swing high broken was in the lower half of the distance between two levels then the initial stop loss should be midway between the previous level and the level before it. If the swing high broken was in the upper half of the distance between two levels then the stop loss should be just beyond the previous level.

SHORT TRADES : Go short on a CLOSE below the most recent swing low. If the swing low broken was in the upper half of the distance between two levels then the initial stop loss should be midway between the previous level and the level before it. If the swing low broken was in the lower half of the distance between two levels then stop loss should be just beyond the previous level.

EXITS : Exit partial positions to book profits as levels are achieved in the direction of the trade (as mentioned in the first trading guidelines post). Exit position completely when trailing stop is hit OR you get a reverse signal (short signal when you are long or long signal when you are short. You may exit postition completely at your discretion/judgement as levels are achieved.

TRAILING STOPS : For trailing stop loss, please follow the same strategy as mentioned in the first trading guidelines (see 1st post in this forum topic).

IMPORTANT: SKIP ANY TRADE WHERE THE INITIAL STOP LOSS IS TOO LARGE FOR YOU TO TAKE. TAKE THE TRADE ONLY IF YOU ARE MENTALLY PREPARED TO LOSE THE AMOUNT IF YOUR STOP IS HIT. HERE YOUR JUDGEMENT WILL COME INTO PICTURE.

DISCLAIMER: THIS AND OTHER STRATEGIES IN THIS FORUM ARE FOR EDUCATIONAL PURPOSE ONLY. PLEASE EVALUATE THE STRATEGIES CAREFULLY BEFORE YOU USE THEM. MAKE SURE YOU USE PROPER INITIAL AND TRAILING STOP LOSS LEVELS DURING THE TRADE. IF YOU DO NOT WANT TO STRICTLY FOLLOW STOP LOSS STRATEGIES MENTIONED HERE (ESPECIALLY THE INITIAL STOP LOSS), DO NOT USE THIS OR ANY OF OUR STRATEGIES.

NOTE: IF YOU ARE INTERESTED IN 100% SUCCESSFUL STRATEGIES, PLEASE LOOK ELSEWHERE. I GUARANTEE YOU THAT THIS STRATEGY WILL HAVE ITS SHARE OF FAILED TRADES WHERE YOUR STOP WILL BE HIT.

I will post examples shortly.

[SwingTrader]

Below is NF 5 min chart with Swing Highs and Swing Lows marked

[Stockhunter]

Hey ST sir - well done... flow system on 5 mins .... but it will work on days when we have one directional move for most of the days... but as you said, it will have its own share of profits and lossy trades.... long term should be profitable.

Cheers
SH

[SwingTrader]

[sherbaaz]

Dear Swing Trader,
I was going through your alt strategy. But i am not able to understand the concepts Following are my doubts :
a) What does lower bars (lower highs) mean?

There are variations for this concept. If there are two bars with same highs and there are minimum two lower bars before those two bars and minimum two lower bars after those two bars then high of those two bars is also a valid swing high.
Not able to understand as what you are trying to say – Could you please explain the above statement with a example.
c) What does higher bars (higher lows) mean?

Similar to the variation of swing high, if there are two bars with same lows and there are minimum two higher bars (higher lows) before those two bars and minimum two higher bars (higher lows) after those two bars then the low of those two bars is also a valid swing low.
What does the above statement mean – could you please explain it in detail along with the example?

Request you to please gudie me in this along with some examples.

Regards,
Sherbaaz

[SwingTrader]

Sherbaaz,

Sure, I will prepare few examples and post. I am also preparing a strategy that uses indicators with my levels. I will post examples soon.

[kishy99]

"I will also try and post few examples of combining technical indicators to help in the decision making process during trading using these levels. "

Eagerly awaiting your post ST sir.