iCharts Discussions

[spattavayal]

Dear QuickGunMurugan,
You are right. We need to be ready for the day as index approaches the cross-over. A cross-over in 30 min chart gives advance buy point. We can add more position based on strength towards EOD.
Many stocks have also given multiple buy opportunity when they tested and moved higher from 34 EMA. I think testing 34 EMA gives additional buy opportunity for those who missed the bus during the first cross over.
Also I think selling rule may differ based on situation. It may be either stop-loss, a significant reversal candle at resistance and so on.
Many thanks for providing this insight. I am seriously looking this trading methodology.
Thanks

[sandew]

As per this strategy on Nifty (Spot) charts we are
Long 5056 - Nov 18
Covered 4953 - Dec 22 (loss 100 points)

Again Long - 5184 - Dec 29
Still long

I have entered / exit the day following crossover as i will see the eod chart only in the evening. Rpt above Nifty spot charts.

I fathom this is expected in range-bound market we are witnessing now-s-days.

I request someone to cross-check above and post his confirmation.

Thank You
Sandew

[spattavayal]

My bad.. my thanks also goes to vijayakannan who started this thread!!

[greatshiva]

QuickgunMurugan,

I didnt get ur point.

Do u wait for crossovers check till Market is closed ?

Do u see EOD chart and then start trading the next day ?

Ok in that case if there is a reversal in mkt with huge movement , will u wait till EOD to check the reversal crossover and then only exit ?

Check Dec22 ,09. It gave sell signal in EOD chart. Next day , if u sell at opening you willhave loss of 162 pts at EOD to wait and check for EOD charts...


and also what strategy do u use to book profits ?

Please correct if I am wrong anywhere....

[greatshiva]

I dont think it is good to wait for crossovers for exiting also.

It is good to trial your stops using previous day low or low of the week at some point and keep taking profits.

I am personally thinking of using icharts levels bulls and bears in a day to exit and reenter whenever there is any doubt of market direction....

[ConMan]

Shiva

Lemme explain it to you again....

this is a system which has no targets....it is a trading system which helps you be in the right direction of the market most of the times.

I am a supporter of EMA crossover strategy but the EMAs that I use to do the trades are different and the method is also different. So I cant comment on where to book profits.

Lemme tell you as per my larger TF system...

Short at 5042 on Dec 16 covered at 5145 (-103 pts) & reversed at 5145 (buy on 23rd dec) and continuing to hold the positions. These levels are Nifty Spot levels

Regards
QGM....

Note: When I back tested my system basis EMA crossover I got only Rs.25 crores for 20k investment in 5 years

[greatshiva]

QuickGMurugan,

I have plotted 8 and34 EMA for Nifty spot after usaid.

On Dec 22ndEODchart , 8 EMA was 5020 and34EMA was 5023 which means an indication to sell.

On next day morning , if u sell at opening u will have 162 points loss and then if u open EOD chart for 23rd , u will then decide to go long next day morning... Am I right ???

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[greatshiva]

One more thing ,

Practically speaking none would be able to invest just 20k to have futures contract . Bcos if some loss has come for that 20 k by gapdown of 150 pts , you need to have the MTM in the bank....

This MTM also needs to be in demat accnt for your position not to be squared off incase there is reversal and while you keep waiting for exit crossover to reverse the position.... Bcos here trading is happening in futures right

[ConMan]

Shiva

There are two things you need to remember...when you are plotting EMAs like 8/34 make sure you have atleast 6-7 months data. This would help you in smoothening your EMA value. See when I look at the data I have no short call on December 22 2009 because there is no crossover.

Things to remember...

let there be a clear crossover & not just EMA lines kissing
I suggest to take a trade between 3.20 - 3.30 pm
Dont wait for the next day.

Its quite possible that we may see 170 points loss in a single day...but the profits on disciplined approach is much much higher

[spattavayal]

I think cross over is very effective after some significant correction.For example, on Dec 22,2009 Nifty blasted off after making a cross-over on 30 min chart. Though I see cross-over over1,2,5 min charts,they are wipsaws and need to extra careful. A trend that is established over 30 min are more stable (atleast for that day!).
Also please note that 8 EMA was sloping up gradually and we have anticpate and act.
Do remember to keep strict stop loss. During last downtrend cross over failed many times and index dived like anything.
Today market has dropped to 34 EMA on 30 min.However,market is in a ragebound state and I am looking at the window on Jan 5 and likely to be tested. Next is 5200. Put writer will defend 5200.Unless RIL and ONGC breaks,there may not be much down side from here.

[greatshiva]

[greatshiva]

[vijayakannan]

hi guys

thanks for the postings. just want to clarify some thing as per my perception.

1. 20000 margin is not enough for this strategy - please note that when this is started nifty is at around 2000. for 2000 nifty, the margin requirement at 10% will be 10000rs. but i have taken 20000 which is 20% as initial investment considering the losses if any in first trade. also i have considered the same 20% as margin when i am calculating the entire calculations. if we just take the 10% then the returns will be much hgher. now we may require more margin considering cmp at 5250 levels. if anyone wants to just try this, please try it with minifty 1 lot. i am sure you can start that trade with 30000 investment which will take care of margin and also some MTM losses (if any)

2. Booking profits. Here as per this strategy we are not trading 8 and 34 cross overs. the strategy is to trade current market price cross over with 8 and 34 ema.

When CMP is crossing 34 ema from below, we go long. and we exit the long position when it is crossing 8ema from above.
and same way we short when cmp is cutting 34 ema from above and we square off when cmp is crossing 8ema from below.

And another point is please dont see the charts with 30 minutes or 60 minutes time frame. you may get lot of whipsaws. only check the daily charts. The theory goes like this. Daily after market is over check the CMP, 8EMa and 34 EMA. and plan your trade for next day. next day better to see the market at 3.15 to 3.20 pm (only EOD charts).

for eg. as on 8th EOD charts we are long in nifty. CMP is 5245 8EMA is 5225 and 34 EMA is 5116. hence the strategy should be to see the market on monday at 3.20 and if the price is below 5225 then square off at that price. and if suppose it is below 5116 which is 34 ema, then we may square off our long trade and enter a short position at that price.

there should not be any stop loss in this system. but if anyone wants to keep it safe, then they can have their own system for stop loss, and end of the day at 3.15 take a call and carry forward the trade as per this system. ie. if suppose you want to play safe on monday, then the strategy may be like, putting a stop loss sell order at 5225. if suppose that is executed, then wait for the market, how it is closing. if suppose it is recovering then re enter at 5225 ./ hence your profit is saved. and if has not recovered and it is going below 34 ema then short it only if it is at the closing time. And also pls keep in mind that this kinda cross overs happen maximum thrice in a month. so only during that times you can check the market during market hours for this trade. all other times just forget it till 3.20 and leave the trade to grow the profits.

also, if suppose you exited at 5225 and market is closing some where around 5150, high risk traders may use that to go for long as it is still above 34 ema..as lot of times market took support at 34 ema and retraced to new highs (EOD basis only. dont think of intraday)

my current plan is i am having this trade in a seperate demat a/c while all other trades in another demat. and i dont see this at all in market hours.

thanks Anand (Quickgunmurugan) for his valuable insights in this.

[greatshiva]

[greatshiva]