Two scenarios that can lead to a better performance of SAR trades.

Trading in the markets has been quite tough recently. I have been observing that we are getting too many V-shaped recoveries and falls. The volatility is huge and the swings are just too quick to catch.

Today a Bank Nifty long trade got stopped out and now we are short in bank nifty futures. Check out the chart below and some observations regarding SAR trades.

Bank nifty futures long trade, was triggered on the budget day, at point “B” (10701) on the chart.
It was around 485 points from recent low; point “A” (10216) on Chart. Was the SAR too far from the point “A”? On the hindsight, one can say yes, but I would like to say that market was very volatile therefore that was the appropriate level to keep a SAR trade.

Let’s come to the second trade. Long trade that was initiated at point “B” was stopped out today at point “D” (10700). Calculating the range from recent high point “C” (11155), it is again 455 points stop.

SAR and Volatility
I have previously discussed the relationship between SAR and volatility in the post “Should you take all the SAR trades?” Do check that post for some strategies that you can apply when you take your next SAR trade. Volatility will result in bad entries for the SAR trade that needs to be compensated with better exits.One needs to book partial profits as the trade progresses.Entering a trade on the first pullback results in better entry than SAR in volatile market conditions. 

Two scenarios that can lead to a better performance of SAR Trades.
Coming back to the main topic of this post, following two conditions will result in overall better performance of SAR trades:

1) SAR trades, should last for a large price movement, for example the January short SAR trade in nifty gave around 630 points. That trend lasted for more than a month same is happening in gold and crude trade currently.
2)Second condition is that when a SAR is breached, there should be low volatility prevailing. Top and bottom formation should be a gradual process rather than a V- shaped recovery or a fall. Unlike the above chart.

Three possible trade setup keeping above two conditions in mind.


1) Find a SAR trade when a stock has seen a long period of sideways movement and is about to breakout.
2) Try to work on a narrow range seven strategy.
3) You should strive to catch a news release breakout example current crude oil trade.

Can you think of more technical setups? Please do contribute in the comments section below.

Trend following and SAR
SAR is a trend following/breakout strategy. One of the basic characteristic of a trend following system/ technique is that you will never be able to catch the absolute top or bottom. Therefore in a SAR trade it is very important that we choose a trade or a trend which has a better probability of a larger move with respect to our time-frame. Trading a corrective move based on SAR will often lead to a low profitable/losing trade.

Finally to conclude, I would like to use the most over used statement that we see in the trading blogs:
“ It’s always easier said than done” :-)
Do share your thoughts and opinions below in the comments section.

Related Post
Should you take all the SAR trades?
Opinion and Answers about SAR and Trading.

What is the average profit per trade of an intraday Nifty trader?

I think I am asking again :)

Any idea what is the average profit per trade of an intraday trader?

For example if an intraday trader takes 3 trades, makes a profit of 20 points on all the three trades, his average profit per trade would be (20+20+20)/3 = 20 points per trade.

If another one, takes 3 trades like win 20 & 20 on first two and lose 10 points on the 3rd trade. His average profit per trade would be (20+20-10)/3 = 10 points per trade.

Another example of a trader, win 20, lose 10 and 10 His average profit per trade will be (20-10-10)/3 = 0 points per trade.

I would request traders and readers to please tell what is the average profit per trade of an intraday Nifty trader? This will help in setting the right expectation for our intraday trades, and one can plan the trades, the right way.

As per today's levels a trader would have made approximately 80 points from peak to trough (5740-5660) and approximately easy 50 points (5740-5690) if the position was squared off close to end of the day

So do you feel 50 point per day per trade is fine for intraday, at times we may not get the profit the same day but that's never the intention, as these are swing trading levels. If we get more than 50 points, we should be out of the trade end of the day (EOD)?What is your opinion?

Cheers.

Trading For A Living – A Practical idea?

Whether trading can be done for living, has always attracted the interest of active traders and people in general. I firmly believe that trading can be done for living provided certain conditions are fulfilled. Below are some of the factors that play a significant part in deciding whether a trader achieves success in his goal of making a living from trading the markets.

1)Experience – As trading is all about probabilities and trading psychology, more the experience better are the chances of success in earning a living out of trading. One should have sufficient experience (years not days), that too should come out of operating in different market cycles (bull and bear markets). If you start to trade for a living from day one, you will fail badly. This point is basically about finding a system and being at ease with it.

2)Capital Requirement – Returns from markets are variable, but let’s take a return of  10-15 percent CAGR for a conservative estimate (some traders will laugh at this number, Larry Williams made 11,376% return in World Cup Championship of Futures Trading!).Your living expenses should be less than 10-15 % return on your capital. As living needs are different for different people, you need to do your own math to find the amount of capital required, before you take a step towards making trading, the only source of income for yourself. This point is all about money management and setting realistic expectations from the markets.

3)Psychological Challenges – Apart from dealing with the madness in the markets, an individual trader has to face psychological pressure from the family and the society as well. Trading is considered synonymous with gambling by a large section of “non trading group”. They will surely ask very difficult questions once a new trader takes up trading as a carrier. Other thing that adds up to the psychological pressure is debt. Make sure you don’t have any outstanding loans, it should be paid off  before you start trading your own account. In short, try to minimize the noise and distraction to achieve a focused approach towards your goal.

Odds for achieving success in trading become quite favorable if above conditions are met however experienced traders can work in very demanding conditions as well (Larry Williams made that kind of return in 1987 when many traders went bust). Trading is like a business, just as millions of people are running their businesses successfully, you too can be successful. Quite a lot of businesses fail, you too can fail in trading. Understanding and managing the risk is all you need. Finding your own space in the trading arena is very important, and that takes a lot of time and effort. The sooner we realize this, easier and less stressful, will be our journey towards our goal.

Life (as well a trading) is all about probabilities, when certain things align in certain ways, things tend to look simple. We find an effortless way around things that once seemed complicated, demanding and impossible. Trading for a living is much harder than people assume.

Good luck.


Related Post
Reposting the Holy Grail Post in text format

Opinion and Answers about SAR and Trading.

Piyush has some questions about SAR trading from the previous post 
*********************************

hi anuj,
ur sar and volatility is interesting. i actually use sar. but what i know abt ur sar is that it is discretionary where u use certain ingredients (disclosed) in a secret way :-) to bring sar.
for jio sar users which is use of 10 ema as sar. how will volatility be relevant. suppose the example u gave. the short call was closer to top so u increase position size as compared to long call which was far frm bottom. suppose the long call turns more profitable then? can u give any example how sar users can make use of volatility
in skipping trades/position sizing. volatility can be measuerd in vix/atr. how can j 10 sar (10 ema sar)/psar/5sma sar users use vix to position size?
*********************************
My reply

Piyush (Sharda Saheb!)
Nice to receive a comment from a "hawk eyed" critic and a learner.
First of all there is no secret about my trading levels. I rely on classical trading techniques like Trend following and observing price patterns (higher/lower highs and higher/lower lows)not fancy chart patterns. I also use moving averages, RSI, Price pivots (not to be confused with pivot points).ATR is one of my favorites. I am a big time follower of J. Welles Wilder, Jr techniques and really admire his contribution to technical analysis. Very simple and effective approach to trading has been highlighted in his book, New Concepts in Technical Trading Systems.

Agreed...that I don't specifically recommend the use of a particular moving average, or say that this parameter is better than the default setting, or this trend line is more relevant than that one. That’s simply because there are infinite possibilities that exits in a market. There are all sorts of people involved in the market with different objectives like value, swing, day, spread traders etc.There can't be a single formula for everyone.

"The biggest secret of the success in the markets is that there is no secret."

One has to find her/his place in the trading arena and stay committed to the system and the plan. There is no holy grail system or parameter available. Trading is all about probabilities, there will be whipsaws and losses.
This is just my "written trading plan”. I made this keeping in mind that it will be useful for an "office going person" (who can't afford to sit at the system during the intra day trades).One just, has to put a stop loss order in system and forget the intraday price movement.

Regarding J10SAR (10 day EMA)
It will have the advantage and disadvantage of a moving average system i.e. giving excellent returns in trends and poor returns in sideway and volatile conditions. If I am right you and others from OJN have conducted extensive research regarding 10EMA.Check the performance in July and August and compare it with performance in September 2010.There will be huge difference in performance and profit per trade during this time.
We need to have a method that tells us a low risk entry price. One should skip the SAR trades when volatility is high and rising as it will give bad entries.SAR is a breakout trading method. It works excellently when there is a range breakout after a low volatile market condition. For example taking the J10 SAR signal when Nifty ATR is 60 will be better than taking the same trade when ATR is 120.That's applicable for any stop and reverse (SAR) system which is essentially a breakout trading technique.Breakout trade works well when markets move from range contraction to range expansion state.Trends should also last for a sufficient time as well, otherwise we will be chopped out.

I hope it will give you some ideas to work on regarding Stop and reverse trading.
Cheers

Related Post
Should you take all the SAR trades?
How do I calculate SAR ?

Should you take all the SAR trades?

Hi,
SAR (Stop and Reverse) Trading seem to be quite popular these days with traders. This is an "always in the market" strategy.
Traders believe that if they stay always in the market they will be more profitable. However there is a popular market maxim that "Standing aside is a position"
Without getting into the debate about which is a right or wrong strategy, let’s check this recent trade in ICICI Bank futures that got stopped out yesterday.

In the chart given above we can see two trades i.e. a short trade that concluded yesterday (From here on referred as trade A), and a long trade that started yesterday (From here on referred as trade B)

Check out the range (recent top compared with SAR level, marked with red horizontal lines in the chart) that was broken when the respective stops were taken out.
In Trade A range was approximately 31 points when stop was taken out, a system short was initiated.
In Trade B range was approximately 55 points when stop was taken out, a system long was initiated.

Market conditions during both the trades.
Volatility was comparatively less at the time trade A was initiated on the down side hence giving us a tighter stop loss therefore providing a better risk to reward ratio.

Learning from these trades
1) Initiating a trade based on SAR during low volatility period (Trade A) results in better entries thus better overall profitability
2) If one wants to take every SAR trade that a system alerts, she/he should ideally trade with bigger volumes during low volatility period (trade A) than higher volatility period (trade B).Position Sizing Strategy to be implemented as per trends in volatility.
3) During higher volatility periods (Trade B) one should enter a trade on a pull back (Low Risk Entry) or closer to the range extremes than getting caught in the middle part of the range.

System trading versus Discretionary trading?
Both trading methods have their advantages and disadvantages. Traders, who find it difficult to stay disciplined, should use system trading as it eliminates emotions from trading.
While traders with sufficient market experience should prefer discretionary trading as it gives better entries and exits.Which one is a better method? That’s an endless debate.

Feel free to share your views, strategies and ideas about SAR trading below.
Good luck.

Related Post
How do I calculate SAR ?
How to use the market calls table
Opinion and Answers about SAR and Trading.

Are you using the Buy Only / Sell Only Watch List?

Hi
I was just checking the performance of Buy Only / Sell Only Watch List.The results are incredible.In this downtrend the stocks featuring in the "Sell Only" list are giving a  massive down move.
Check the charts and see it for your self. This is a classic example of not trading each and every move in the market but trading specific moves in specific stocks for better performance ie trading the high probability setups.
Really jaw dropping returns :)

"Chance favors the prepared mind"
Cheers

Buy Only / Sell Only Watch List

Hi,
I have created a watch list of stocks falling under two categories i.e "Buy Only" and "Sell Only".
The purpose of this watch list is to help us allocate money as per the underlying trending of the markets.
For example, if the market (Nifty) is bullish,we will try to find a buying opportunity from the "Buy Only" watch list and vice versa


How this watch list is created?
I have started to follow both fundamentals as well as technical factors affecting a stock's performance.
Stocks falling under "Sell Only" watch list have both bad fundamentals as well as poor technical setup currently.
I will try to update this list every quarter after the result season is over.


How to use this watch list with this blog?
As I track the markets on a regular basis and update short term trends via the "Market Calls Table".
I would request you to trade the "Buy Only" Stocks when trend is "UP" and trade the "Short Only" Stocks when Nifty's trend is "DOWN" as per the Market calls table
The Nifty's trend should only be used to establish a bias to trade either a buy only or short only stock.
Once a stock is selected you should just follow the stock's own technical levels to trade and not get bothered by Nifty's movement
Avoid selling "Buy Only" Stocks and dont try to bottom fish the "Sell Only" Stocks.
Of course the "Sell only" stocks can sometimes give better returns on a reversal than "Buy only" stocks but that will be like trading against a larger downtrend and bad underlying fundamentals.Opposite is true for "Buy only" Stocks as well.
As always plan your trades in advance and always keep stop losses.
I have selected stocks which are traded in F&O market and hence ignored the rest of cash market stocks.
You can check both the lists of stocks below.
*****************************************
Buy Only

ACC - Cement
Bajaj Auto - Automobiles
Bharti Airtel - Telecommunications
Hindustan Zinc - Metals
Indraprastha Gas - Oil & Gas
ITC - FMCG
Larsen & Toubro - Engineering
Mahindra & Mahindra - Automobiles
ONGC - Oil & Gas
Sun Pharmaceuticals - Pharmaceuticals
Tata Consultancy Services - Information Technology

*****************************************
Sell Only

3i Infotech - Information Technology
Development Credit Bank - Banks
GTL Infrastructure - Telecommunications
Housing Development & Infrastructure - Real Estate
Ispat Industries - Steel
Kingfisher Airlines - Airlines
Mercator Lines - Shipping
Punj Lloyd - Engineering
Reliance Communication - Telecommunications
Suzlon Energy - Power
TTML - Telecommunications

*****************************************
List Updated on 12 December 2010, Next update around mid February.

Related Post
How to Use The Market Calls Table

Neglected Essential : Simple Money Management Rules For Online Stock Trading

I have been posting Stop And Reverse (SAR) levels for some time now, its performance has been satisfactory. Recently I reviewed the performance with bank nifty as example. Since we had budget presented in this review period, the returns were impressive. Now as we have entered sideways market conditions for the past few days, we are getting whipsaws in trading, resulting in losses. One such loss was experienced today in trading nifty. So how to deal with such situations and minimize the loss?


The answer to the above question and for overall "good trading discipline" lies in sound money management practices. Money management is perhaps the most neglected idea in trading, psychology is another aspect often ignored by traders. Some people have written very complicated books on money management and related aspects using all sorts of mathematical ratios. But I am going to present it in a simple way (that's what this blog is all about,"the made easy" stuff right?). It will ensure that you keep your trading volumes in check, thus giving you enough liquidity and peace of mind in tense situations.

So here is what you need to do:

1) First find out how much is your trading capital? Let me take 1,00,000 (one lakh) as trading capital in this example.

2) Divide this amount by 2, that comes to 50,000

3) Keep 2 lots (of 50,000 each ) one for UP trending stock/index and other for DOWN trending stock/index

4) Now divide 50,000 into two, that comes to 25,000 worth two lots.

5) One of these lots (worth 25,000) is for breakout trade (breach of SAR in intraday trading) and other is for a pull back trade (when the price comes close to "low risk entry" in intraday trading )

That's all about it, money management in trading can't be simpler than this. Now let me list some advantages and disadvantages of this plan.

Advantages :

1)The Plan keeps you in both bullish and bearish trending stocks...so you are automatically hedged.

2)You are diversified, as you will have positions in two different stocks/index

3)You enter into two positions, one at breakout and other at first pullback therefore a lot of confusion in the mind is resolved.

4)You average down your  winning trade and not your losing trade (as long as SAR is not breached you assume that you are in a winning trade). Check this how I suffered badly by averaging my losing trade. You should never average a loss making trade.

Disadvantages :

1) Psychologically it's a bit tough. Why? because you have to be long in one trade and short in another, many new traders are not comfortable with the idea of shorting.

2) What will you do if all stocks are going up and you cannot find a single stock to short and vice versa? In that case you let the other half (50,000 for short) lay idle in cash and wait for one of the short trade to appear (you will surely find it in couple of days)

3) Too much capital is required to follow this plan, it may not be not easy for new trader initially. In that case you should follow half the strategy, that is, enter your trade in two tranches one at breakout other at pullback

Above are some pros and cons of this plan. Clearly I can feel that advantages are more in this plan than disadvantages.

That's all about the plan for the time being. I feel it's quite good. I will make necessary changes as per your feedback and suggestions. Please share your experiences with money management practices and also try to highlight some more advantages and disadvantages of this simple plan.

I hope it will help a lot of traders. It is certainly going to help me :)

Related Posts:

How to use market calls table
Should you take all the SAR trades?

Online Stock Trading Made Easy - Lazy Trader...Crazy Returns

Hi, 

I don't know from where to start...ok..let me start by saying a BIG thanks to Sriganeshh, yesterday he asked me how I calculate SAR for my trades.You can check the comment section here,for details of conversation.

He also asked me what is my success rato in SAR.I had no clue about that,so after a reply to his question,I thought let me go back and check the performance of SAR.Although I am confident of system and returns but checking the actual performance revealed some interesting facts

I checked the returns of bank nifty in specific, as I track it very often and it compliments my trading style

You can do it by going to Indian market calls label and check the past performance.

I found out that the system has been long since 09 February 2010 from the level of 8421

Bank nifty closed at 9180 and made a high of 9230 on 12 March 2010 (last trading day)

So total return comes to around 800 points approximately 8.5 percent 

But since we buy futures of bank nifty the returns goes up significantly.Lot size is 50 and approximate margin requirement is around Rs 50000 and gain is 800*50=Rs 40000 that comes to 80 percent returns 

So its 80 percent returns in a month, in one trade and the trade is still not closed.Considering these facts I feel these are excellent returns

Now we should just not look at facts and get too excited about the returns.We should try to read between the lines and find out the real reasons for this kind of performance.

Some important details about the system's  characteristics which I mentioned in yesterday's post

Since this is a trend following system and uses trailing stops(SAR)...you will see it does well in trending markets (will perform better for bank nifty than nifty....and will perform better in case of icicibank than reliance)
It will have the disadvantage of trailing stops which is you will always enter away from market tops and bottoms...thus giving back your accumulated profits...and also have advantage of trailing stops...will let profits run to maximum limit,and will not take you out when oscillators scream "OVERBOUGHT"
What ever system you choose it will favor certain market conditions and perform badly in other conditions

With that knowledge my task becomes easy...I am on look out for stock about to breakout in trend...or simply trade in trending stock and ignore sideways markets and stocks(FMCG and Pharma)

After this trade's analysis I truly understand the following quote.

"The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight."

                                                                                                                        - Jesse Livermore

So "sitting tight" is what I take away from this trade,although I did not trade in Bank nifty this time,but it still gives me important insights into my trading system...and more importantly my own psychology

Wishing you good luck and hope everyone has a nice weekend

Cheers

Triple Screen Trading System - Dr. Alexander Elder trading system

Sriganeshh said....
anuj
just thinking..u created so many excel programs.
what's ur view on elder's trading system..is it not good?
like to know ur views
best
sri
*****************************
My notes:
Dr. Alexander Elder trading system - http://www.elder.com/
Do you mean the triple screen trading system?
I think it is one of the best and logical way to trade.I feel it is similar to other systems or setups.like multiple time frames theory and what Ilango mentioned today in this blog 5th of  5th in Elliott wave...
What is 5th of 5th in Elliott wave? If you take a closer look you will see that, there is a 5th wave in progress and there are a smaller degree of  a waves within that fith wave ,which is making 12345 wave pattern.
So the best place is to sell or buy is when markets are overbought or oversold in two time frames.I do this quite often.I check 15 min time frame and establish a bias (markets call table)and use Intraday (5 or 1 mins chart) to enter in direction of trend.

How do I do that?
Information that I have before the market opens (I know the direction of trend and I also know when it changes(SAR - Stop And Reverse )
Assuming we are in down trend(opposite in case of up trend).I try to establish a point where market will be overbought in 15 mins chart.Then I move to 5 minutes or 1 minutes to find overbought levels in that  time frame.
This point is the place which gives me best risk to reward in terms of 15 minutes chart and my  SAR (Stop And Reverse).So I enter shorts at that point
In simple words, look for a pullback (against the trend movement) in your trading time frame to get a good entry (better risk to reward ratio)

I hope it gives some new insights,for more read Dr Elder's book,Come into my trading room.I will discuss this in details with chart some other time
Good luck
Cheers

Related Post
Free Online Forex Futures Trading Strategy
Free Gold And Crude Oil Futures Tend Update
How do I calculate SAR

Budget Day - Great way to test your intraday trading system's performance

Hi all,
First of all Happy Holi to everyone,hope every body enjoy playing with "other colors" apart from our daily favorites, green and red!!!
Friday was the budget day and as always it was a volatile day,reasons are quite simple, a lot of economic and industry specific news is released in very short period of time while the market are open.
I am attaching three charts :
IFCI - went up all day
ITC - went down all day
DLF - went up and lost ground at much faster pace

I feel these were nice intraday movements and are quite good to test your intraday system.While the news flow is heavy on budget day,tracking, analyzing and reaction to every piece of news is impossible.Price movement is our most reliable tool in this case ,as always.I would like you to test your intraday trading system base on these stock price movement.It will tell you whether your system is more of a leading or lagging in nature.It will also give you important insights into your own psychology of how you tend manage changing market conditions.Try to imagine how you would have traded in these three stock that day.As history repeats itself(one of the basic principles on which technical analysis is based) it will make you better prepared the next time you witness such a volatile day with divergent stock price movement
Cheers.

IFCI

ITC









DLF

How do I calculate SAR ?

Hi,
A lot of people have asked in the daily "Trader's talk" post about how do I calculate the SAR.
But before I put down some details about it ,I would like to mention that this method may not be suitable for your trading style for example an intraday trader may find "SAR" too far and the calls will be of no use to her/him.While a Positional trader will find it too close to his entry point and fear a whipsaw( even if he has a time horizon of as less as 5-6 days).
This method has evolved keeping in mind the swing trading mindset (we try to enter during intraday pullbacks in the direction of trend and hold on to the position till the SAR gets triggered,we keep adding to our position every day on intraday pull back  and use the gap (up/down in our favor) to add or reduce position.


What is SAR?
SAR (stop and reverse) is a point/level at which it is believed that the trend which is currently in place changes to the opposite one.For swing trade SAR can be any level that is beyond the expected intraday noise(movement),yet it should not be too far from the recent price action(that will result in bad exits and you will end up giving back your accumulated profits)
there are no hard and fast rule for SAR and method changes as per market conditions (stock/index in trend or sideways movement)


Following are some ways how I calculate SAR
1) Recent price action (one,two, three day high/low )
2)Moving average (200 dma)
3)RSI recent peak and price at that point
4)ATR (average true range)


The system does not uses any trend line, pivots,and the use of indicators is minimal.All the importance is given to prices.I give more importance to selecting stock and trading them with this method.You should not stick to your favorite stock/index and be willing to change as per market conditions.


I think thats all about it,if you have questions related to above feel free to ask,but make your own rules and do your own research.that will help you in your long term success in the markets
Good luck


Related Post
How to use the market calls table 
Should you take all the SAR trades?
Opinion and Answers about SAR and Trading.
Two scenarios that can lead to a better performance of SAR trades.

Market calls performance -Analysis

Hi
Friday marked the end of first week of my blog,I have got immense support from visitors across the world (Thank you all for paying a visit and hope to see you/hear from you on regular basis)
By Friday i had posted 5 days of market calls and it has been very tough for me to do all this stuff(i will find some convenient way to do this ,please suggest something on how it can be done and i will also ask for your help)

Now coming back to main topic,I have posted how the market calls have performed for the week  , result are quite good as per my opinion,thats not because i have made good decisions but because market finally moved in a trend and this is a trend following system,so it worked and will always work under strong trends

How did i calculate the returns?
Since this was the first week ,I assumed that we enter the index/stocks on the first SAR breach which happened on Tuesday and in some case Wednesday(check it yourself)
Second assumption that i have made is that we closed the position on Friday EOD in order to calculate the profits/loss.
Third Assumption (the most dangerous one to assume!!!) is that we were able to act on SAR that was recommended.
Decimals have been rounded off

Now keeping the above points in mind if we calculate (provide I did it right,and please correct me if i am wrong for benefit of all) we get these returns which to me are excellent,but just check out how Tata steel performed,if you were trading as per levels mentioned you would have had a tough time.See how difficult Friday morning would have been for you if you were long in it (as it was going up till Thursday)It gapped down below the SAR and went straight down to 620 from around 650(Thursday's close approximately)...In calculation i have taken just the absolute values ,so how i calculated it ? 624.5 (fridays close) - 641.5 (thurs days market call SAR for longs) comes to 17 points profit !!!...But i doubt if anyone could have managed that in real trading.People generally wait for first 15-30 mins before acting on SAR...this one would have landed you in a mess if you did that

Rest results were good and it was easy to enter at SAR...But do check Tata steel to understand what risk you face while trading.All in all it was a good weekly performance and most of shorts will continue for Monday and another down day is expected (i will post market call for Monday by evening).

I need to warn you about how people show there performance.My brokerage company keep posting how well their calls perform.Stuff like...90 % accuracy ...if you invested 1 lakh it will be 4 lakh in 6 months if you followed our calls.Be very careful of such misleading information....ask for detail ...do your own maths...and see how practical the entries and exits would have been if you followed the calls as per your trading style

Anyways you should not follow  anybody's advice build your own system and to do it now ,you should check this link  if you have not done till now .

Good  Luck

PS....the way i have calculated the returns is perhaps the laziest way to trade ....and we still end up in profit!!!....and it takes 15 sec to put that trade .Returns can be much more if you can fine turn that and use intraday moves to enter/exit/add/reduce your positions(in short money management,keeping 'swing'and "sar' levels in mind)

UPDATE - How to use the market calls table

hi
I have made certain changes in the post How to use the market calls table 
In market calls table instead of "Trend" i have now updated it to call 'Swing" and i have added a few ways in which you can use the table for intraday trades.
Cheers

How to use the market calls table

Hi,

From today I will be posting the market calls for the next trading day .As I have mentioned before, being a swing trader these are short term calls and they may not be suitable for your trading style. Please read the disclaimer before taking any decision on the strategies mentioned.

The most important thing in the table is the “SWING” column, it indicates the current swing direction and it is advised that we should trade in the direction of the swing

Next is "SAR" or the Stop and Reverse point , if the price touches that level, the current swing direction changes to the other direction (that will be reflected in the next post)

Then comes the column “Low risk entry ” this is the approximate level where the stock / index will retrace to during intraday trade,failing to reach this point during intraday trade means momentum is HIGH (in the direction of swing)

Then we have a “Target ” level ,which is simply a point that I expect the stock/index should reach if the trend is strong during intraday, failing to touch this level indicates a possible chance of reversal or LOSS of momentum (in the direction of swing)

That’s all about the table; I believe it’s very simple to understand. I would like to repeat that the most important column for a swing trader is “Swing” and “SAR” as long as that remains intact we can enter at any point (intraday over sold level)or book profits at any level(intraday overbought level) for long positions and opposite in case of short positions.But we should carry the position for the next day as suggested by 'swing' column provide SAR is not breached

For intraday trades you should trade in direction of the 'swing' and enter at "low risk entry"point with a possible target at the levels mentioned in the "target" column.You can modify this approach and trade as per your risk appetite or daily profit expectation but only in direction of  "Swing"

These levels and SAR work best in trending markets / stocks,ranging markets will give whipsaws.So try to avoid stock in consolidation phase or trade with less volume or use oscillators extremes to enter and exits out of trade.

Since SAR is a trailing stop,you will end up giving back some of your profits always.That is a basic disadvantage of trailing stop loss order.For best trading results you need to book profits near "target" and re-enter near "low risk entry" zone.Although I have given precise points as "SAR","low risk entry" and "target" you need to watch that zone and react as per prevailing market conditions.

Always wait for prices to become stable as the markets opens and put in your stops 10-15 minutes after market opens.Enter intraday trades as you see prices stalling,that skill will come from practice.

If you have a counter view to the current swing it is best to wait on the sidelines or trade with less volume with strict stop-loss for a short duration.

If you have any questions or comments feel free to ask

Good luck.


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Should you take all the SAR trades?

The Holy Grail of Trading: a roadmap to trading and investing

Hi all,
Well this is my first post regarding trading and this is my first blog as well.I have been trading / investing in Indian Stock Market for about three years. So speaking purely in terms of years I am quite new, but I have been trading, following the market daily and have put in tremendous amount of time on daily basis close to 10 hrs and sometimes even more.


Over the years my way of trading has changed immensely, I started with fundamental analysis then moved to pure technical analysis, but now I am using both fundamental and technical analysis in conjunction. However my short term analysis and trading decisions are based on technical approach.


Enough of information about me (that’s not important anyways) now let’s come  to the main topic “the holy grail”. No I am not going to tell about any magic indicator or any specific parameter to use or a time frame for consistent trade (Sorry to disappoint a few people who were expecting that but trust me what I am highlight here is better than indicators).Instead of that I am going to present a checklist of various experiences that you will have in your quest for becoming a consistent and a successful trader


The credit for highlighting these points goes to a person by the name “jaydaraniya” in icharts forum. I have just made the points in the form of a checklist so that readers can find it easy to assess  where they currently stand in their  development as a professional trader. I have added a few pointers here and there but tried to retain the content as it is.

You can download the Excel file from this link. 

How to use the checklist?

Six types of traders or we can say six board stages of development as a trader are mentioned. You need to find first where you actually are, once that is known you will know what challenges you will face in coming time, knowing that you are better prepared to face the obstacles. It will be like what a map is to a sailor. Once things become clear, you will enjoy your voyage around the trading world

I would like to say thanks to “jaydaraniya”, his article completely changed the way I approached trading and I am quite certain that it will have an immense impact on others who will follow the checklist and work towards the final goal of being a consistent trader / investor.

Good Luck.
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Holy grail in text format