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Hi all...! This is going to be my day trading journal. My method is a simple scalper that has a 1 : 1 Risk reward ratio and depends on high win percentage to maintain overall profitability.
I use a band made of 5 EMA of the high / low to determine my entry level. target / stoploss is 1.5 times the ATR of the last 5 bars. Once entry limit order is triggered, both stoploss and target order is placed and as long as momentum remain with the trade, i wait for the target else get out of the trade at break even.
simple macd (12,26,5) and stoch (19,3,3) is used to gauge the momentum.
I had opened a demo account at EXNESS to test out the logic and the result seemed satisfactory.
Market moves because of the net difference between the bullish order flow and bearish order flow. Market is a continuous stream of data that consist of transactions between the two opposing forces that have different view on the current valuation of the scrip but agree on the price and decides to act or transact.
When I am using 15 min time frame for my analysis, I am essentially breaking the continuous stream of data into bars of 15 min duration. The HIGH of a price bar is the highest price point buyers were willing to pay to fill their inventory. Sellers found the price point attractive and have decided to act. All the demand is absorbed at this point and price auctions lower.
Like wise, LOW is the lowest price point sellers are willing to sell to offload their inventory. Buyers have entered the markets and absorbed the supply and price auctions higher.
As a trader, I have to accept the randomness of price movement. Only way forward is to accept the probability of a particular group to find prices attractive enough for them to act and take it towards the other extreme of the price bar.
In an uptrend, the range of bar shifts higher as the order flow is essentially more aggressive on the buy side. likewise on a down trend, the range shifts lower.
The (exponential) average of the LOW of the last 5 bars is my entry into the long side.
The (exponential) average of the HIGH of the last 5 bars is my entry into the short side.
Momentum is determined by eyeballing the slop of this band and for confirmation of trend I'll use MACD and stoch.
A protective stop loss is placed at roughly 1.5 times the Range of the last 5 bars.
Target of the trade is 1.5 times the range from point of entry.
Sequence of events is as follows:
1. trend is established on the 2 oscillators.
2. buy / sell trigger is placed at one end of the band in the direction of the established trend.
3. Price retraces to fill my order.
4. protective stoploss is placed.
5. Target is placed.
6. IF trend changes to neutral or opposite direction, then the target order is modified to scratch the trade.
7. IF trend continues, then I show patience and wait for target to hit.
First trade of the day :
nifty 5600 put :
Buy trigger @ 18.55
SL @ 11.90
TGT @ 25.15
Target done...!
Remark : good execution...! detected trend change on smaller tf early. Managed good entry location. could have held half and converted to bear spread @ first sign of trouble. it moved another 10 points from point of exit, momentum was with the trade from bar one. hindsight always appears rosy...! As long as target was made...I'm happy....!
Remark : market is bracketed. The trade still has potential to hit target, but once the edge is gone, time to get the hell out. execution was good. alls well that ends well...! market was kind enough to give exit...!
linkon7
India
Posts: 73 since Sep 2010
Thanks Given: 52
Thanks Received: 60
trade 3 :
ICICI bank futures.
buy triggered @ 971.45
sl @ 965.45
TGT : 977.40
tgt done...!
remark : could have entered on the last bar itself, but index coming down and bank nifty stabilizing made me linger. I was lucky to get entry, could have ran away without me.
linkon7
India
Posts: 73 since Sep 2010
Thanks Given: 52
Thanks Received: 60
remark : It did hit tgt without me. but got to follow the system like a book. my gut feelings are right only 51% of the time.
linkon7
India
Posts: 73 since Sep 2010
Thanks Given: 52
Thanks Received: 60
LT was on my watch list... setup worked nicely there also..but went for icici bank instead. already had the nifty call active, so didnt want more than 2 positions active...!
HDFC is looking good...! will tgt that now...!
linkon7
India
Posts: 73 since Sep 2010
Thanks Given: 52
Thanks Received: 60
first trade of the day :
Buy reliance march 8400 call @ 36.20
exit strategy : short futures at 830.85 on spot
tgt 854
Remark : Don't want to scalp this as the counter is not very liquid. Have to hold this for few days. Could have gone long for the futures contract and play for a scalp but decided to give it room with minimum damage to over night position.
