iCharts Discussions

[sherbaaz]

Amit,
Following are the details of squaring off the trade:

Trade1: Square of at 4642 well it was not on the basis of SPF but candlesticks and today's strong bullish trend in the monring. There was a hammer formation before the candle i square off my trade. I was anticipating an upmove from here.

Trade2: Sq off at one of tgt of SPF reason again candlesticks analysis i sq off near to the closing of this candle as i was expecting it was either a dark cloud cover (which it was) or a hanging man if closes near to its open.

Trade3: This i sq off at 4600 as i was having bullish bias of NF closing above 4600 so didnt greed for much below 4600 although it had gone down to 4582 i think. But i already had more than 50 points profit.

Trade4: Not my rouitine trade as i dont take new positions after 15:00. but having strong bullish bias in mind and a perfect bullish engulfing (rare to happened to text book definition) I entered i worked along with TSL (trailing stop loss) and tgt 3rd tgt of SPF.

Hope this will help. I am big follower of candlesticks analysis. What ever is the strategy i always try to blend along with candlesticks


Regards,
Sherbaaz

[suprithvi]

well said sherbaaz, what i feel is ,parsar tchnique cannot be used as a stand alone .you will get lot of whipshaws,this will be nice only in trending market.If tou see yesterday trade of hdfc,icici and in many more, gave whipshaw and made into loss.One more thing ,when the parsar appears and before the candle close, first target reaches in most of the cases .so we cannot enter into the trade.If people watch carefully yesterdays chart can feel this.Experienced people in this may guide me if i am wrong.

[amitrajangulati]

Hi! Sherbaaz,

Many thanks for your reply. Sincerely appreciate it

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Hi! Suprithvi,

Yes, agree with you about the 1st target being met on some occasions after the candle closes on the 20 minute time frame. Maybe, one way to trade this system would be to switch to the 5 minute time frame for a candle close.

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Sesha sir, if you could you please share how you would have traded the Nifty yesterday (entry, booking of profits & exiting) it would be helpful.

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Thanks & regards,
Amit Gulati

[sherbaaz]

Dear All,

Reading post by Suprithvi & Amit made me thought on the same line. I agree with you Amit that by the time candle closes where PARSAR has changed direction, TGT1 is already been achieved.

Well, my interpretation of SPF entry price is that once'ld not enter into long/short at the exact price rather below or above it. For e.g. long above X price calculated. It would not be possible always to enter at exact price.

Regarding SL's it’s not like that in 5 minute TF it will not hit. If uses as per SPF SL's will be frequently triggered in 5 minute TF as they are pretty close. Although I trade mostly on 5 minute TF but I am a ardent believer of "longer the time frame more effective would be the strategy".

SPF has helped me to set the targets for my trade and given the entry points along with SL's.

I had done another trade yesterday. It was short in Jindal Steel. I want to share the details and thought process of this trade as it was a very logical trade due to SPF strategy.

Scrip: Jindal Steel
Time Frame: 30 minutes
A Point 3235
B Point 3016.07

PARSAR changed direction at 14:00 candle on 30th July'09 giving an opportunity to short. As per calculation:

Short below 3100
SL @ 3151
TGT1 2964
TG2 2880
TG3 2745

I saw the chart in the evening of 30th July'09 as calculated the above numbers.

I was confused as SPF was giving short signal on 30th July'09 where as bullish engulfing pattern was formed by 15:00 candle (dotted rectangle on chart) on 30th July'09. And it was a good indication to go long as after a good fall the pattern was formed.

Have I don’t know about SPF I would had been long since yesterday’s opening. I decided that if there is a close above 3100 (SPF short) I will go long in it as per bullish engulfing.

Opening candle closes above both EMA's of 5 and 13 giving me hope to go long but i waited as the close of this candle was not above 3100 (close was @ 3089). 10:00 candle high was 3097 too close to the SPS short but i waited for completion of this candle. 2 things happened here:

1) It didn’t close above 3100.
2) It closes below both EMA's 5 & 13.

I was confident to enter into short trade as per SPF. I entered at 3070 at 10:30 candle keep the SL same at 3151 and targeting TGT2 of 2880.

77 points risk (3074-3151) for the profit of 194 points (3074-2880). Healthy risk: reward ration of 1:2.52.

Near to the close of yesterday's trading session, target was achieved. I dont carry forward my positions. Pure intra day trader.

Profit of 194 points in a single trade in a single day.

The whole idea of mine to explain every detail is that you have to work according to the movement of the scrip and to plan in advance.

Planning is something you cannot do in 5 minute TF as you have to act very fast or your entry price gone. It’s like T20 cricket where as longer TF is like test match.

Hope my sharing of this trade and explanation would help you out.

Do post your comments.

Regards,
Sherbaaz

[amitkbaid1008]

Dear Sherbaaz

I also felt that entry is difficult at suggested entry price or near to that. In NIFTY too I find that Target 1 is achieved by the time entry candle completes.

In your JINDALSTEL trade I feel that your entry should be at candle marked as "Bullish Engulfing Pattern" but I think that you have delayed the trade on the basis of this pattern as other conditions regarding entering the trade as per SPF was present.

But I still feel that this is also a trend trading technique which will give so many whipsaws when trend is sideways like other trend trading technique.

I experienced this is RSEX strategy in NIFTY in recent which have given so many whipsaw trades.

Anyway cheers as you are making money

[suprithvi]

Dear sherbazz,
Thanks for your nice posting.This is not for criticising anybodys great work.while applying what kind of problems we face and in final, we make money or loose is important .This is not childs play,our hard earned money.
Take yesterday banknifty 20 mts Tf parsar A 7630,B 7549.96.( A appers on 12.20Pm).I am not able to attach the chart.Learned people pl advice my how to enter.whipsaws you can feel.So pl do trade with some other indicators combining with this.

[amitrajangulati]

Hi! Sherbaaz,

Attached is a snapshot of the 30 min spot chart of Jindalstel. I am getting the following values:

High: 3187.70
Low: 3112.20
Long : 3158.86
Short: 3141.04

Can you please re-check the tf.

Also, the bullish engulfing pattern that you have mentioned is not a bullish engulfing pattern, according to what I have read. Attached is a snapshot of candle stick readings chart that I had made a long time ago. Can you please double check this as well.

And many thanks for helping out.

Thanks & regards,
Amit

[sherbaaz]

Dear Amitkbaid1008,

As per me there is no strategy which full proof. Every strategy has it own advantages and disadvantages.

Coming back to my jindal trade. You are absolutely right I should'ad entered the long trade after bullish engulfing pattern. Had i entered into it it would had been very short trade.

With SPF I was knowing that it was a downtrend for the stock and I knew in advance about the enrty price, SL & targets. See here candlestick had given a false signal (as bullish engulfing is a very strong pattern). Later on confirmed by EMA's too.

I just want to highlight 2 things here:

1) KNowing entry price, SL & targets in advance is always g8 as it gives you logic and confidence at the time of entring a trade.

2) No strategy is perfect one has to work accordingaly the advantages & disadvantages of the said strategy. And always blend 2 to 3 tools for verification.

I will also incure losses (had also suffered) because of SPF but that dosnt not mean strategy is bad.

Hope you understand my point and i have no intention to offend you. Thanks a ton for replying.

Regards,
Sherbaz


Dear Suprithvi,

For your reference I am putting bankniftY future,my observations.Although i dont trade it as its too volatile for me.

A point=7630 (@13:40 candle)
B point=7578 (@13:20 candle)

I wonder why yourpoint B is different from mine on same 20 minute TF?

As per SPF:

Short below 7598
SL 7610
TGT1-7566
TGT2-7546
TGT2-7514

11:00 candle made a bearish engulfing pattern (not the perfect, but 2-3 ticks i take a levy) indicating the short at 11:20 candle witha SL of 7630. But I would not had entered into this short trade as PARSAR didnt changed. But i would had noted it down as observe as PARSAR had came near to candles.

Candle 1,2,3 as marked by me on chart had formed a tweezer top supporting short of bearish engulfing. But I would had waited to PARSAR to change which changed at 13:40 candle.

Now here I already had entry price, SL & targets, which always gives me g8 confidence to enter into trade.

If you see 13:40 candle high was 7600 (damm close to short price). I would have entered at closing of this candle around 7600 with a SL as per candlestick above 11:00 (above 7630, I would had kept it at 7637).

Let say i entered at 7695 in short trade. Following are risk:rward ration of SPF targets:

1) TGT1= 1:0.69 (NOT EVEN A DECENT RATIO).

2) TGT2= 1:1.16 (NEAR TO DECENT RATIO).

3) TGT3= 1:1.93 (GOOD).

I would had definitely targeted TGT2 and TGT3 with TSL. But not beyond TGT3. Here I want to thank Amit Gulati for posting excel sheet calculator of SPF. As I have pasted it in my master excel sheet for calculations.

14:40 candle close was 7504. TGT3 achieved before that.

I hope this will provide some information about the trade on banknifty-F.

Do post you comments, I am not saying to anyone to use SPF, candlesticks, or EMA. Work with what suits you. For me SPF is beneficial aas it gives entry price SL and TGTS well in advance.

Regards,
Sherbaaz

[sherbaaz]

Dear Amit,

I wonder why tehre is so much diff in both of us point A & B also there is a big difference in PARSAR end time and start time.

I have rechecked my chart its for 30 min tf only

My point A is at 14:00 candle 3235 only and my point B is at 13:30 candle at 3016.07 only. I have rechecked this too.

I dont know wht difference is coming on same TF.


Coming back to you bullish engulfing question well close of 14:30 candle was at 3015.35 which was a red candle and open of 15:00 candle is also at 3015.35, it was a green candle. I always take levy of 2 to 3 ticks. Its not possible always to have perfect pattern.

The material you have sent is only the trailer of candlesticks analysis. Try to get some good book on the same by Steve Nison. It will really help you out.

Hope it will help do post your comment.

Regards,
Sherbaaz

[amitrajangulati]

Hi! Sherbaaz,

If you take 3 day's data, then we get your values. If we take 2 day's data, then we get my values.

That brings us to the question ... how many days data should one use for this method?

Thanks & regards,
Amit

P.S. In my chart, I still can't see the part of the red candle which is seen at the end of your chart.

[sherbaaz]

[mayurnsk]

sherbaaz & amitrajangulati Hi,

I have only one comment for you for what you have posted so far. Its great !! just carry on. Unless I spot something else worth to correct upon I won't be putting my comment, may be for some thing to add as new in system or something to avoid.

Basically I want you guys to explore yourself and share, because that is only way to improve oneself and develop a system as well. Thats my only selfish motive

Seshareddy was architect of this system I was just a contractor who laid basic & workable structure in place. Now you guys tell us how to improvise it.

Just continue to carry on your wonderful exploration work , together we build the improvised system.

Cheers!!!

Mayuresh Jahagirdar

[sherbaaz]

Dear All,
I was checking the daily charts and found something interesting in RCOM.
Till time we are sharing post trade entries and exits. Trades which we have already done. I am positing chart of RCOM as it’s PARSAR has changed direction on 31st July’09 only. I will be sharing my understanding along with the tools I would use to trade it next week if it comes to expected level.

RCOM- Spot

Time Frame: Daily

Tools used: SPF, CANDLESTICK, FIBONACCI NUMBERS & my own trading levels.

Fibonacci resistance is drawn from low to high (candle 1 of 13/07/09 to candle 2 of 11/06/09) giving various expected resistance level in its upmove from candle 1.

50% resistance tested by RCOM on 28/07/2009 at candle 3. Although it never touched 50% resistance but was very close.

50% RET = 296.73 and hight of candle 3 was 294.90. (damm close!!)
Candle 4 made a bearish engulfing pattern. (again its not exact but very close) indicating SHORT TRADE.

Candle 5 i.e yesterday’s candle has changed the PARSAR. Following are entry level, SL and Targets as per SPF:

Point A= 294.90 (surprisingly also the close of candle 3)

Point B= 268.56

SHORT below: 278.62 (candle 5 close was below 278.62 it is 275.75).

SL= As per SPF 285 & as per candlestick 297.

Targets: TGT1- 262.34, TGT2-252.28 & TGT3- 236

Following are my trading levels calculated on weekly basis for the coming week (earlier i used to denote them as bull & bear levels, but as they are ST’s levels name I changed it to Bhaloo and Saand, goes well with my name too):

S5= 312.48
S4= 298.75
S3= 290
S2= 284.80
S1= 281.45
SAAND= 278.74
BHALOO= 273.76
B1= 271.06
B2= 267.70
B3= 262.51
B4= 253.75
B5= 240.03

See the power of combining my levels along with SPF levels:

As per SPF SHORT is below 278.62 which is almost exact close to my SAAND level of 278.74. As per my levels above 278.74 bullish bias and below Bhaloo level of 273.06 bearish bias with respective targets too.

If I would execute this trade i will SHORT between 273.76 and 278.62 (candle 5 close is below SPF as mentioned earlier).

Also see that my trading levels targets for this short trade is also near to SPF targets:

SPF TGT1= 262.34 which is almost close to B3=262.51
SPF TGT2=252.28 which is very close to B4=253.75
SPF TGT3= 236 which is near to B5=240.03.

G8 verification of both levels along with 50% RET and candlestick.

My whole idea is that we all watch how RCOM behave in coming week and to see that SPF in combination of other tools work how.

Request all to post their comment on this and if possible follow RCOM also on dailiy TF and share their views. It would be a good learning experience as I am planing in advance the trade on the basis of various tools.

Regards,
Sherbaaz

[mayurnsk]

sherbaaz Hi,

I must say that you are putting great efforts. Nice to see that. Putting up good work, I must say that you are getting into the groove .

Keep it up.


Regards & cheers

Mayuresh Jahagirdar

[sherbaaz]

Hi,
Thanks Mayur for your encouraging words. I request all other(s) do contribute to this thread. As will not only enchance your knowledge and of others also, more importantly we all will come to know about the advantages/disadvantages of SPF.
Today I traded in option on the basis of NIFTY SPOT. First time I have tried this.

Time Frame: 30 minutes

Option: 4600 CE

Strategy used: SPF, 5 & 13 EMA’s & my trading levels.
SPF:
Point A = 4588.70
Point B = 4658.10
Long above: 4631.60
SL: 4615
TGT1: 4674.50
TGT2: 4701
TGT3: 4743.88

My trading levels:
S5= 4729.47
S4= 4669.60
S3= 4631.40
S2=4608.77
S1=4594.08
SAAND=4582.33
BHALOO= 4560.57
B1= 4548.82
B2= 4534.13
B3= 4511.50
B4= 4473.30
B5=4413.43

First candle off today trading seesion had changed the direction of PARSAR. Giving indication of going long. Another thing I found (which I dont know how much is correct, request all to backtest the same) that if there is good gap between NEW PARSAR AND THE CANDLE ON IT IS FORMED probabiliy is very high that our direction of trada is right and SL as per SPF also works.

I bought 4600CE at candle 1 @ Rs. 186/-.

I had made a key resistance line at 4669 i.e between 4663 and 4669. As per my trading levels resistance was at 4669. Incidently CAMARILLA H3 level (for short trade) was @ 4663/- and yerterday high was also near to this levels.
Combininig my trading levels, yerterday’s high & Camarilla H3 for me key resistance(RET) zone was between 4663-4669. This key resistance zone was tested by 11:00, 11:30, 12:00, 12:30 & 1:00 candle constantly. Once this key resistance zone was breached by 13:30 candle there was no looking back for NIFTY SPOT.

12:30 candle made the day’s low at 4617.80 (very near to the SL@4615 had it breached the SL i would had closed my trade).

Another important thing was that since morning each candle close was above 5 & 13- EMA (only once 12:00 candle closed below 5-EMA but above 13-EMA).
I squareed off my trade with a decent 33 points profit at candle 2. Had i waited i would be in profit of 53 points. But as I was trading in options first time i closed my trade at TGT1.

Do post your comments on the above trade.

Regards,
Sherbaaz

PS: THIS, ALTHOUGH I HAVE NOT BACKTESTED IT. ONCE 12:30 CANDLE BREACHED THE POINT B (12:30 CANDLE CLOSE WAS 4658.20 & POINT B=4658.10), THERE IS AN UPWARD MOVE IN NIFTY SPOT. DO CHECK IT.