iCharts Discussions

[mayurnsk]

Hi

Here I am with another system for trading. This was evolved yesterday (15/08/2009... around 11PM ) in shout box while our fellow ichartian billysm asked me about how he can have good exit strategy while using his EMA / SMA cross over technique. So I am naming it as Billysm System

I asked him to add few things to his charting screen so that he can have better trade and profits. Billysm uses 5EMA and 13SMA crossover. I asked him to add bollinger band of 13 and PARSAR The system here I am putting is bit modified and using most of the default values of indicators.

SYSTEM / TECHNIQUE

What you need?

1. 60 min candle stick chart ( though you can have any time frame), in this example I am taking Nifty Futures chart.
2. 5EMA , 20SMA
3. Bollinger Band 20
4. PARSAR
5. MFI with default values
6. RSI with default values

How It Works?

For easy understanding I will be taking example of long trade in nifty futures.

1. When Price is falling and it is falling along the lower bollinger band, wait for green candle to start from lower bolling band.
2. Note that earlier candle to this green candle should be red.
3. Wait Dont enter any trade at this point.
4. As soon as next candle starts you can enter the long trade ...1 in picture
5. Immidiately put Stop loss order at red low , which is earlier candle to the previous green candle . 2. In picture
6. Make sure the PARSAR swing is under your entry candle ( though for aggresive entry its not that important)
7. Book partial Profit at 3 in picture @ 20 SMA or entire if price is not able to go up above it. ( 20SMA acts as midline of bollinger bands)
8. Book another profit at 4 in Picture when it hits uppar bollinger band
9. Book another Profit at 5 in Picture when it is still going higher and still above 5EMA
10. Exit completely once price falls below 5 EMA.

And opposite set up is true for short trade

Note:
1. I have added MFI and RSI just for easy decision making you can see divergence in MFI & RSI with respective to price. Price was making lower low while MFI & RSI was making higher low.
2. No need of lower indicators actually but one can have indicators as per ones wish.
3. With this system we are not forcasting but trying to remain in trade in the direction of the trend.
4. Here the catch is as long as price remain between 5EMA and bollinger band ( Upper for long trade and lower for short trade), just ride the trade.
5. Trade is to be taken on candle closing basis. Like stop loss should be on candle closing basis entry should be only after closing of green candle and opening of third candle and so does booking of profits.
6. You can use any sets of EMA /SMA but have bollinger band same as SMA like if you are having 14SMA then have Bollinger Band as 14, as 14SMA act as midline of bollinger bands

One can improve and fine tune this system which was developed in 15 mins

Whatever improvements you will come across do post here.


Thank you

Cheers!!!!

Mayuresh Jahagiradar

[hbanerji]

thanks for the explanation... the system looks fairly easy to follow

[mayurnsk]

hbanerji Hi


Thank you for showing interest in the system and I also encourage you to improvise it.

This is how we can use these lagging indicators in leading way as what i feel.


Mayuresh Jahagirdar
Nasik

[tulsian1107]

Hello sir,

Plz clearify following..

1. SM4 of how it works-" As soon as next candle starts you can enter the long trade". Here the colour of candle may be red or green or only green, and is it Necessarlly that it must starts above the green candle.

2. for SM1- Some times falling of candles along with bollinger band repeated continuously & go on falling. Some time green candle starts from out side of BOB & Some time previous candle doses not touch lower BOB and reverse. How to locate entry. Can we take help of DMI or RSEX. Can we take entry when candle croses EMA(5) & viise versa.

3. PARSAR with default values is not indicating true situtation??//




Thanx
tulsian1107

[mayurnsk]

[Trendwithpapa]

Dear Mayur THE E-BLUSSS

Thanks for a wonderful strategy.
Could you please guide me that what settings shud i keep for bollinger bands if i change the tf to 5 , 20 or eod or weekly....

In 60 min you have taken 20 and I can see 20 is not working for all tf.

So please help as this is a gud system to book the profits for me.

Hope to hear

Nipun

[mayurnsk]

papapreach the UDPS hi

why you say that 20 setting for bollinger band is not working for you? Infact i believe 20 is most prefered setting.

Anyway try using 9 or 14 setting for bollinger bands .
Come back to me with your findings and secondly what do you mean its not working in 20 setting?


Regards
Mayuresh Jahagirdar
Nashik
Maharashtra

[mayurnsk]

Hi

Guys just put on some fast oscillator along with this set up. For instance CCI or Fast K or alike and see the results it will improve much better. It will help to take good entries and exits. Try out!!



Regards

Mayuresh Jahagirdar
Nasik
Maharashtra