Nifty Positional trade based on 70/1030 EMA Strategy

USED Moving Average Crossovers : 1030min EMA & 70 min EMA
Charts Used : 5 day Charts, 5 min Bars 

Go Long Rules
If The faster line (red ) goes above the green - > Close shorts & immediately go long.

Go Short Rules
The faster line (red ) goes below the green - > Close longs & immediately go short.

No other Indicators Needed... Works Well Especially in Volatile Times

Stop Loss
An initial acceptable range for the stop depending on your comfort level can be put. As the Nifty moves in your direction , immediately put the the stop at the purchase price + brokerage as soon as possible.

HOW TO USE NIFTY INTRADAY

After years of trading the nifty in intraday trades and request from several followers of this page to have a comprehensive page on how to use this page for best effects in different market scenerio, finally i prepared this documentation. Every attempt is made to make it cover all market situations and to explain how rational decisions can be made, it is always to some part matter of judgement. Hence the followers are advised to paper trade first using these strategies, and when in confidence start actual trading. 

Following are the different strategies using this page for different classes of traders,

A) Based on breaking of swing high/low.( more trades /more risk)

B) Based on stochastic and rsi. (moderate trades/moderate risk) 

C) Based on wave behaviour. ( very few trades/low risk) 

detailed discussion follows

A) Based on breaking of swing high/low.( more trades /more risk)

This strategy is for those who take several positions everyday and their trading style is scalping type, in high quantity is traded for the small move in nifty. This method of trading uses the pre-fed orders in the direction of the stochastic.

Long trade entry and exitrules:

Buy rule : place buy order at recent swing high+5 points (when rsi & stochastic are moving up.)

Sell rule : Place sell order at buy price + one step* of chart

{* one step: This is one of the great feature of the yahoo chart that it automatically expands when the volatility increases and the distance between two horizontal lines in the grid is refered as the one step)..

Note: Add or substract the difference betweent the spot and future prices in order prices , the chart shows the spot nifty prices

These trades are illustrated below.

Short trade entry and exit rules:

short rule : place short order at recent swing low-5points when rsi & stochastic are moving down.

cover rule : Place cover order atshort price - one step* of chart

{* one step: This is one of the great feature of the yahoo chart that it automatically expands when the volatility increases and the distance between two horizontal lines in the grid is refered as the one step)..

Note: Add or substract the difference betweent the spot and future prices in order prices , the chart shows the spot nifty prices

These trades are illustrated below

Some key tips to follow this system:

1)Always trade in the direction of main trend, you can trade the reactions also but the chances of hit and miss are more if you are trading in the direction opposite to the main trend.

2)Stoploss: As soon as you get the position ( buy/short order executed) apply a stoploss of one step below/above the entry price.

3)Avoid the choppy days, you can identify the choppy day when the size on one step is 5 points only…

4)Never think that I will enter when the high/low is crossed , you will never get the price, because the break of that price cause the jerk move in the nifty.

5)Feed also sell/cover order at the same time. Don’t decide to exit manually, this will include the emotional interference in the trading.

6)Use higher quantities so as to make good profit.

7)Avoid trader after 2:30 pm, more chance of hit and miss case.

AVOID TRADING THE CHOPPY DAY (MORE CHANCE OF HIT AND MISS)

HOW TO TRADE USE PIVOT POINTS

 i am going to show you the way to trade Nifty future using Pivot points. We will calculate Pivot points on daily basis using daily charts and then use those Pivot levels on 15 minute charts — our main charts — where we will look for entries, stops and exits. We will use 15 minute time frame because it allows catching the best entry and exit opportunities. With hourly charts, for example, when the signal is there it is quite often already too late to react / enter.

We know we have to calculate Pivot points every single day, so that each morning we start with new fresh daily Pivot points, calculated from last trading day's High, Low and Close. Let's look at today's Nifty future 15 minutes chart to see how Pivot points were found. As you can see we use only 5 major Pivot point levels: R2, R1, PP, S1 and S2.

After Pivots are in place traders should start taking notes. First, they should note where the market has opened today in relation to the Pivot Point (PP): above the Pivot Point or below it. The answer to this question provides the first clue about traders' biases for the day, e.g. if the market has opened above Pivot Point, traders will be bias towards taking long positions, on the contrary, opening below the Pivot Point would suggests shorting for the day.

Then traders should look at how far the price opened from the Pivot (PP), and make extra notes when it opened below S1 or above R1 level which is considered to be a quite distant open.

With some small distance away from the Pivot Point it is considered to be a good morning for trading. It is very much suggested to wait for a pull back towards the Pivot line before taking a position. 15 minute charts in this case help to catch the right moment for entry.

With the second — distant opening (below S1 or above R1) — we have very high expectations that the price will try to correct such "distant irregularity" and thus instead of progressing further away from Pivot Point it will try to move back towards the Pivot — the gold-middle point of the day. As a result, we will typically see a ranging market which does not produce much of the trading opportunities. The expectations are that the price will revolve around Pivot Point for the rest of the day — nothing to do for us, we should stay out. (Some of the writings are excerpts from Pivot Points Strategy by Jeff Boyd Authors & Publishers Inc.)


Why do pivot points work? The whole Pivot point trading technique is based on two main market concepts: existence of support and resistance. These two tendencies form the core of the market moves and therefore receive full attention from the vast majority of professional traders who trade on behalf of all kinds of large, medium, small financial institutions, funds as well as for themselves.

Because Pivot points are easy to calculate, millions of automated trading systems in the world automatically execute buy / sell orders analyzing the market moves in relation to the Pivot points. Also, there are very little variations that can take place when calculating Pivot points (those are only timing factors, but even then pivot points can quite often suggest the same data).

These precision in targets and mutual "agreement" among traders on certain key levels for the day cause the market to really shift, turn and move as huge percentage of traders pull in the same direction using basic Pivot points trading rules.

With EMAs crossing, for example, every trader can set different indicators and thus timing and reaction will not be so well coordinated. Also take Fibonacci, where for each time frame traders pull their own Fibonacci levels, same for trend lines — there are as many opinions out there as traders trading Nifty future. But when it comes to Pivot points, no matter what chart you use your Pivots will be the same = levels of support and resistance, where everyone hits the same button at the same time. Pivot points outperform other trading techniques and indicators also because they are predictive as opposed to lagging.

Because so many traders worldwide use Pivot points for trading, all major indices and stocks react at these levels in a quite predictable manner, respecting support and resistance levels and creating a lot of trading opportunities. (Courtesy - Jeff Boyd for a part of this writings)

Now lets see, was there any trading opportunity today using Pivot points in Nifty future. Nifty future opened above the pivot level of 4641. So, the bias for the day was positive and one could only buy near pivot point if the pivot point is respected in the 15 minutes chart (see my earlier post) for a target of R1 (4701), or one can buy for a target of R2 (4741) if R1 is penetrated and sustained. Nothing of them happened, and so it was a no trade day for Pivot Point traders and my god, you are saved from being whipsawed in comparison to other trade methods as Nifty future moved the whole day in narrow ranges.


We already now know what are PivotPoints. We already know the basics of how to trade them. Now of utmost importance to know, daily pivot point values tend to be touched or traded through roughly 75% of the time. In other words, seven out of every ten sessions for any liquid market will see the daily pivot point come into play at some point during live trading.

Isn’t that amazing! To know that a certain spot on most any chart will be touched more often than not can be a powerful tool. Unfortunately, unless one knows what to do with that information it is worthless at best or harmful at worst. Believe me, more traders LOSE money with this knowledge than actually makemoney. Some of the worst trading sessions touch their pivot points several times (sideways choppy session) while some of the best trading sessions miss touching the daily pivot at all (gap & go trend sessions).

In general, a market trading above its pivot point value is acting bullish while a market trading below its pivot point is bearish. That's the most general rule for using these price measures, and it holds true most of the times. Fact is, the same trend filter applies to all charts and trading timeframes: intraday charts or even daily and weekly charts.

Pivot point values are not exclusive to day trading at all. We can use them in swing trades and even position trades for long-term stockholds in DP accounts. Depending on our time horizon of trading chart, the applicable pivot value works there too.

Using daily charts for swing trades in any liquid market would mean we want to keep track of the weekly and the monthly pivot points. That much is easy: once a week we calculate the previous week's price values for a weekly pivot point. The beginning of each month we calculate previous month's price action for monthly pivot points. Simple as that!

General Market Advice:

1. Never chase a stock.

2. Buy when markets are in the grip of panic.
3. Only buy fundamentally strong stocks, which are undervalued.
4. Buy stocks grown in top line and bottom line over the past years.
5. Invest in companies with proven management.
6. Avoid loss-making companies.
7. PE Ratio and Growth in earnings per share are the key.
8. Look for the dividend paying record.
9. Invest in stocks for sure returns.
10. Stocks have been the high yielding asset class over the past.
11. Stocks are an asset class.
12. The basic property of any asset class is to grow.
13. Buy when everyone is selling and sell when everyone buys.
14. Invest a fixed amount each month.

What you should do in a stock Markert

1. Get rid of the junk Stocks
Any shares you bought but no longer want to keep? If they are showing a profit, you could consider selling them. Even if they are not going to give you a substantial profit, it is time to dump them and utilise the money elsewhere if you no longer believe in them.
Similarly with a dud fund; sell the units and deploy the money in a more fruitful investment.
2. Diversify Your Porfolio
Don't just buy stocks in one sector. Make sure you are invested in stocks of various sectors.
Also, when you look at your total equity investments, don't just look at stocks. Look at equity funds as well.
To balance your equity investments, put a portion of your investments in fixed income instruments like the Public Provident Fund, post office deposits, bonds and National Savings Certificates.
If you have none of these or very little investment in these, consider a balanced fund or a debt fund.
3. Believe in your investment
Don't invest in shares based on a tip, no matter who gives it to you.
Tread cautiously. Invest in stocks you truly believe in. Look at the fundamentals. Analyse the company and ask yourself if you want to be part of it.
Are you happy with the way a particular fund manager manages his fund and the objective of the fund? If yes, consider investing in it.
4. Stick to your strategy
If you decided you only want 60% of all your investments in equity, don't over-exceed that limit because the stock market has been delivering great returns.
Stick to your allocation.

What you Must not do in a Stock Market

1. Don't panic

The market is volatile. Accept that. It will keep fluctuating. Don't panic.

If the prices of your shares have plummeted, there is no reason to want to get rid of them in a hurry. Stay invested if nothing fundamental about your company has changed.

Ditto with your mutual fund. Does the Net Asset Value deep dipping and then rising slightly? Hold on. Don't sell unnecessarily.

2. Don't make huge investments

When the market dips, go ahead and buy some stocks. But don't invest huge amounts. Pick up the shares in stages.

Keep some money aside and zero in on a few companies you believe in.

When the market dips --buy them. When the market dips again, , you can pick up some more. Keep buying the shares periodically.

Everyone knows that they should buy when the market has reached its lowest and sell the shares when the market peaks. But the fact remains, no one can time the market.

It is impossible for an individual to state when the share price has reached rock bottom. Instead, buy shares over a period of time; this way, you will average your costs.

Pick a few stocks and invest in them gradually.

Ditto with a mutual fund. Invest small amounts gradually via a Systematic Investment Plan.
Here, you invest a fixed amount every month into your fund and you get units allocated to you.

3. Don't chase performance

A stock does not become a good buy simply because its price has been rising phenomenally. Once investors start selling, the price will drop drastically.

Ditto with a mutual fund. Every fund will show a great return in the current bull run. That does not make it a good fund. Track the performance of the fund over a bull and bear market; only then make your choice.

4. Don't ignore expenses

When you buy and sell shares, you will have to pay a brokerage fee and a Securities Transaction Tax. This could nip into your profits specially if you are selling for small gains (where the price of stock has risen by a few rupees).

With mutual funds, if you have already paid an entry load, then you most probably won't have to pay an exit load. Entry loads and exit loads are fees levied on the Net Asset Value (price of a unit of a fund). Entry load is levied when you buy units and an exit load when you sell them.
If you sell your shares of equity funds within a year of buying, you end up paying a short-term capital gains tax of 10% on your profit. If you sell after a year, you pay no tax (long-term capital gains tax is nil).

OPENING RANGE BREAKOUT TRADING METHOD

****OPENING RANGE BREAKOUT********
--Do not trade for first 15 minutes i.e. upto 10.10 AM.
--first 15 minutes of trade is known as OPENING RANGE. (O.R.)
--Write down High and Low of Opening Range.
--now whenever trades above high or below low of Opening Range then it is known as OPENING RANGE BREAKOUT. (O.R.B.)
--If O.R.B. is up then stoploss will be low of ORB for intraday.
--same way, If ORB is down then stoploss will be high of ORB for intraday.
***********HOW TO TRADE FOR POSITIONAL CALLS USING O.R.B.*******
--------When call is 'HOLD LONG'

•Do not trade for first 15 minutes.
•now if OR breaks up then hold your longs keeping low of OR as stoploss for trading upto 3.00 PM.
•after 3.00 PM if trading level is above our closing stoploss level then carry forward the long for next day.
•If during inraday, low of OR is broken down and you have closed the long for intraday, then re-examine the level after 3.00PM. If trading above our closing stoploss level then re-enter long to carry forward for next day and if trading below our closing stoploss level, then do nothing.
--------When call is 'HOLD SHORT'
--If OR breaks up then close your short. Re-examine at 3.00PM. If still trading below our closing stoploss level then re-enter short and carry forward it for next day. and if trading above our closing stoploss then do nothing.
--If OR breaks the OR down then hold the short for intraday keeping high of OR as stoploss.after 3.00PM decide as per closing stoploss level.
----------When call is 'INITIATE LONG'
--If OR breaks up then initiate long.
--If OR breaks down then avoid the call.but re-examine after 3pm,if trading in green then initiate long and carry forward the long for next day.
---------When call is 'INITIATE SHORT'
--If OR breaks up then avoid the call.
--If OR breaks down then initiate short.but re-examine after 3pm,if trading in red then initiate short and carry forward the short for next day.
************CONCLUSION*****
--Do not trade upto 10.10 AM.
--From 10.10 AM to 3.00 PM trade with three levels(OR high, OR low, Closing stoploss) and one strategy (Long or Short).
--after 3.00 PM trade with one level(Closing stoploss) and one strategy( Long or Short).

--in short be alert when you are long and stock is trading red or be alert when you are short and stock is trading in green