iCharts Discussions

rk_a2003 · Black Belt Joined: 21 Jan 2010 Posts: 2734

On candle bar chart in case a green candle was formed on Friday , you watch market on Monday the moment nifty crosses Friday high enter in to long trade above 2 points of Friday high and close the position at the first profitable opening of the coming days. Stop loss ideally can be Friday low or 50 points from your entry which ever you feel convenient.

In case on Friday red candle was formed on Monday you should go short at 2 points below Friday low. The other rules are same. In case on Monday the condition is not fulfilled then there is no trade.

This is not my original invention .I saw this strategy on some Video and back tested it and found more than satisfactory results,success rate is good. Even though profits are not huge: they come consistently, which is good. I just wanted to pass on this to my fellow I chartians.

I request all who wanted to implement this to back test it and to implement only after you are convinced with it.

In my opinion this is one way of trend catching.

Regards,
RK

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

Thanks for sharing. Any new learning is welcome!

Rahulsharmaat · Black Belt Joined: 04 Nov 2009 Posts: 2766

I checked this from Jan 2011---

almost 21 trades done 7 stop loss of 50 point each thats 350 loss
14 trades made gain- i set 70 points for booking thats 980 points

So its almost 620 points in 6n half month thats 90 points every month

I changed entry rule a bit-- it should be 5 points above high-- or below low

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

Interesting rahul. There were 29 fri-mon ocassions and that means about 50% times profit, 25% times loss and 25% no-trade. That's a good success ratio

ANS_KOL · White Belt Joined: 16 Jul 2011 Posts: 84

dear rk, what if the monday open is higher than friday high+2(in case of green friday), or if monday open is lower than friday low-2 in case of red friday? kindly explain.
dear rahulsharmaat, if you backtest simpler strategies like "buy friday close price and sell monday close price " with half a percent stoploss you may get similar result in spite of the market being in uptrend or downtrend
trading is nothing but a game of chance. backtesting and paper trade may show excellent result but as soon as you start trading real time, you will end up losing money.
don"t believe me? go and try this strategy , you will find yourself.

rk_a2003 · Black Belt Joined: 21 Jan 2010 Posts: 2734

ANS_KOL · White Belt Joined: 16 Jul 2011 Posts: 84

dear rk, the primary idea of this forum is to grow mutually as traders, so kindly do not take it personally if somebody criticise your(?) strategy.my aim is to constrct or find out a good trading strategy that will give decent profit in mid to long term time frame. so, without backtesting do not discard a trading system.i will send you detail of the website where i got the buy friday, sell monday- strategy, kindly go through that.
i stick to my point mr rk that trading ,in spite of the trend being up or down , is a game of chance and every trade , at the beginning has 50-50 chance of winning and losing.proper money management and strict /trailing stop loss is the key of success, not the trend, which can reverse any time.
and last but not the least, i never got this idea from nowhere that a green friday means the overall trend is up or vice versa.
don t get me wrong , mr rk, this confrontation is required for our mutual growth.
thanks.

ProTrader · Site Admin Joined: 06 Jul 2008 Posts: 433

Try Fib of Fri-Mon Mr. Green

--ProTrader
Blood..it is in you to give

Rahulsharmaat · Black Belt Joined: 04 Nov 2009 Posts: 2766

Try Fib of Mon--fri--

Sir please explain

rk_a2003 · Black Belt Joined: 21 Jan 2010 Posts: 2734

ProTrader · Site Admin Joined: 06 Jul 2008 Posts: 433

Rahul:

Get the high for frimon and get the low for frimon. Now apply fib.

--ProTrader

rk_a2003 · Black Belt Joined: 21 Jan 2010 Posts: 2734

Rahulsharmaat · Black Belt Joined: 04 Nov 2009 Posts: 2766

High of week and low of week-- But ho to apply-- can u post any example please
with chart

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

I don't understand what ProTrader is implying but what I do know is that nifty bounced off 38.2% fibo (~5532) on 21st thursday and I had cautioned one mr. shrikant iyer in a private message not to be bearish on friday.

ANS_KOL · White Belt Joined: 16 Jul 2011 Posts: 84

dear rk the main drawback of buy friday sell monday strategy is not the ongoing trend but the position is prone to the weekend news flow which, in the monday morning show a big gap up or gap down opening against your expectation and way beyond your stoploss level.i tried to combine the 2 strategies and make it better one.i considered the trend as well as suggested by rk, but for me, a stock in uptrend because it , in the chart creatin continuous higher high and higher low and trading strongly above its short term, intermediate term, and long term moving averages, and NOT BECAUSE IT HAD A GREEN FRIDAY, OR IT IS TRADING ABOVE FRIDAY HIGH.

Here is one important signal that gives you almost one trading signal every week! This is a simple signal and all it takes to identify it is just two prices --Friday’s Close (FC) and Monday’s Open (MO) prices! Also because this signal is very simple, it tends to fail frequently but the Stop-loss is very narrow for this signal and hence a losing position gets closed generally within a few hours with minimal damage to our portfolio. Thus the success rate may be lower for this signal, but this signal does have impressive payoffs. This signal gives many opportunities to earn profit two to three times more than the risk undertaken.

There are certain justifications for this signal that make it a powerful indicator for the subsequent few days' price trend.

• Stock markets almost all over the world are usually closed on Saturdays and Sundays but, as we know, things do happen on these days. What I am referring to here are some natural, geographical, economical or some political events that take place between Friday night and Monday morning. So all that happens between Friday's Close and Monday's market opening get reflected in Monday's Open price. So Monday's Open price Vs Friday's Close price is a good summary of all that happened in between and how that impacted stock prices.

• Also, because of holidays, lot of regular traders as well as investors find time to analyze the market of the previous week. This is the time many people come up with their game plan for the next week and create a wish list of what they want to buy, sell or trade during the upcoming week. This, on the aggregate level, influences the market on Monday.

• From Friday night to Sunday night, this is time for parties and socializing. This is time most interactions take place among friends, relatives, strangers(like ANS and RK Twisted Evil

) etc and many times people discuss about stocks. Though this may be on a smaller scale but it does influence the market of the subsequent week. This is one of the reasons behind strong market opens on Mondays during a bull market.

• Last but not the least, influential weekly publications as well as private paid investment newsletters are published on Friday evenings and they make to individual's homes, and minds, during the weekends. They, and also the weekly Business section of almost every newspaper, talk about the market and individual stocks in detail, and influence/shape quite a few people's investment actions for the coming week.

This all gets reflected in Monday's market opening as well in trading throughout the day. So I think Monday's open price is a powerful indicator for the stock prices for the subsequent few days.
It makes sense for traders to typically hold a position only for a few days from one to three/five days at most! This signal is suitable for people who are in constant touch with the market and who can open/close positions without any hesitation within a few hours.
With this signal you get an indication to buy or sell a stock exactly on Monday morning. As soon as the market opens on Monday morning, you can execute a trade within the next few hours. Let us now see how to enter into a position using this signal.
1. First, you need to know what trend the stock is currently in. A stock can be in an up-trend, a downtrend, in a Reaction/Correction or in a sideways movement.
2. Then you need to know Friday’s Close price.

FOR A RISING STOCK (IN A BULL/UP TREND)
CASE 1: If the trend is up and Monday Morning Open price (MO) is HIGHER than Friday’s Close (FC), you can take a long position as soon the stock/index trades HIGHER than the opening price. Keep a Stop-loss at Monday’s Open price minus ½ % (preferred Stop-loss) or Friday’s Close price minus ½ % (for people who hate to open and close positions too hastily).
CONDITIONS:
1. Trend is Up (One quick way is to look at the price chart and see the current price trend).
2. MO > FC, the stock price seems to be going up from today’s opening level.
ACTION: You BUY this stock preferably after it starts trading higher than today’s opening price level. it is also advisable to wait a few minutes (15to 30) before you take any action. This gives the stock/market sometime so the trading becomes normal and we can feel the trend for the day more confidently.

FOR A FALLING STOCK (In a Bear/Down-trend)
CASE 3: Now if the trend is Down and Monday morning Open price (MO) is LOWER than Friday’s Close (FC), you can take a short position as soon the stock/index trades LOWER than the opening price. Keep a Stop-loss at today’s Open plus ½ % (preferred Stop-loss) or Friday’s Close price plus ½ % (for people who hate to open and close positions too quickly).
CONDITIONS:
1. Trend is Down (One quick way is to look at the price chart and feel the current trend).
2. MO < FC, and it seems to be going down from the opening level.
ACTION: you can SELL/SHORT this stock when it starts trading lower than the day’s opening price. againIt is advisable to wait a few minutes (10 to 30) so the trading in the stock becomes normal and we feel more confident about the trend emerging for the day.
not have good profit!
I hope you are able to understand this signal clearly. I would like to emphasize few things here.
• Apply this signal to stocks that usually have powerful trends. Don’t use them on stocks that are cyclical and are range bound (Sideways) most of the time.
• MONDAY MORNING signal fails frequently. However when it fails, you are able to close your positions quickly and with small losses.
• When these signals succeed, they usually generate attractive profit.
• When there is significant GAP (difference) between Friday’s Close and Monday’s Open, the resultant signals tend to be more accurate and powerful.
• These signals are useful for traders who usually settle their trades quickly, at most, within three to five days.

as far as the exit is concerned, i would like to go with rk strategy( book profit in the first profitable opening of the coming days , which i found most logical part of rk strategy).
dear rk this is not a strategy developed by me, but just observations in the websites which may help traders. so, criticise, dissect, analyse this but do not discard it without back testing, kindly remember this is a derivative of the strategy described by you.
waiting for youe feedback.
love.
ANS.