6th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets.html#post642060 Hi Friends, I will be posting my swing trading system here.

As all of my other systems, this is again based on trend trading and I will use only EMAs to trade, this allows to keep this system simple and easy to follow. I will use it on Nifty futures only here however this system only and the timeframe I will be using is 30 mins. The next couple of posts are blocked from future amendments or links. Do leave your comments as I would like to know how many people are looking forward to trade my swing system (I dont want to put a lot of effort in case there are not many takers). Cheers SH

6th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-3.html#post642460

ok then ... here we go then.... This strategy is highly inspired by Dow theory and Elder's greaters fools zone. The Dow theory defines a a trend as a sequence of higher highs and higher lows (bullish trend) and lower highs and lower lows (bearish trend). Elder's greater fool zone has already been covered by me in one of the previous threads. It explains how markets tend to revert to mean (ie correct back to a particular EMA) after it reaches a point far away from the EMA. Basically when markets are trending, they tend to trend till they hit extremes, then correct back to value zone ..and then start the trend again. Our jobs as swing traders are to: 1. Identify the trend as well as trend reversals early. 2. Identify when the markets have trended to extreme zones 3. Wait for enough pullbacks before we enter the trend again. We will cover all the above 3 gradually as we evolve this thread. First things first, what all do we need on charts as indicators. We need to plot: 1. 15 EMA on 30 mins nifty futures charts 2. SMA envelope (17 SMA, 1.5 % deviation) Now coming back to the 3 things we need to do as swing trader using 15 EMA and envelope as stated above: - How to identify trend and trend reversal As stated above, a trend is a sequence of higher highs and higher lows (or lower highs and lower lows). For the sake of this strategy, in a bull market, a lower high will be defined as a correction to 15 EMA after making a new high. If the correction does not reach 15 EMA, we will not consider any low made during that correction as lower high... our lower high will stay at the point where 15 EMA was last touched. A higher high is obviously a high made above previous high. Similarly, in a bear market, any correction going upto 15 EMA and then falling to new lows would mean a lower high made..any other rallies that cease before 15 EMA is touched will not be considered at lower high. If we see markets making highs, then pullbacks to 15 EMA, then making new highs, then again correcting to 15 EMA and then making new highs again .. we are in bull run. Each successive 15 EMA retest makes a higher low, We will call the higher low as 'bull SAR'

Similarly highs made around 15 EMA in bear trend will be called 'Bear SAR' Trend reversal is whenever a bull SAR or bear SAR is taken out, we reverse to opposite position. I will post some charts to explain bull SAR and Bear SAR in detail before talking about entries, SL and targets for this strategy. Till that time, digest above Cheers SH

7th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-3.html#post642482

Nifty futures charts for last 20 days (15 EMA and 30 mins) all red dots are proper corrections to 15 EMA after making a new high (sometimes markets correct to go below 15 EMA, thats ok). As you can see, each red dot has made a higher low so each red dot makes a bull SAR. A breach of bull SAR (i.e markets dropping even by 1 point below bull SAR) triggers trend reversal and shorts are triggered. Currently the bull SAR is at 5232 (lowest point between previous high and current high) . Today nifty touched 5398 before falling to 15 EMA and making 5333 low. If nifty was to make a new high above 5398 tomorrow, it would mean todays 5333 would become a new bull SAR. If Nifty keeps falling and goes below 5232, it will mark the trend reversal and shorts will be triggered. Please understand the above charts.

Tomorrow I will post about when to enter, book profits and pyramiding etc. Cheers SH

7th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-4.html#post642657

Quote:

Originally Posted by ptk Dear SH, I think there is a small correction in your writeup and on the chart also, please correct me and forgive me if I am wrong. I have made the changes below:QUOTE As stated above, a trend is a sequence of higher highs and higher lows (or lower highs and lower lows). For the sake of this strategy, in a bull market, a higher low will be defined as a correction to 15 EMA after making a new high. If the correction does not reach 15 EMA, we will not consider any low made during that correction as higher low... our higher low will stay at the point where 15 EMA was last touched. A higher high is obviously a high made above previous high. UNQUOTE Similarly on the chart, it should be "Bull HL" instead of "Bull LH" Many thanks for sharing the strategy and I am looking forward to trade this setup. Regards, ptk Yes thanks for pointing that out....was writing up the post late at night after a hard day at work and a few drinks down... Cheers SH

7th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-4.html#post642659

Currently Nifty has made a new high so bull SAR has indeed moved to 5333 short will trigger below 5333 I will post more about profit booking zones and re-entry/pyramiding zone. Cheers SH

7th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-5.html#post642696

Quote:

Originally Posted by lvgandhi do you consider making a high or closing at high. Just making a new high is enough ...close doesnt matter. Cheers SH

8th February, 2012

http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-6.html#post643025 Quote:

Originally Posted by mysticalrun hello sh, thank you for new masterpiece.lots lots of thank sir, now as according to it ,nifty today breached bull hl,so now its in sell mode in 30 mins , am i right? i am saying about nifty spot. Mystical - at the start of the thread I said this thread if for nifty futures Nifty futures longs still intact bull HL 5332 Cheers SH

8th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-6.html#post643029 Quote:

Originally Posted by mangup Dear SH, I have few queries. Kindly do reply. 1. What is the logic of deciding 30 min candle, since 15 min may be better as per me (keeping in mind that all the candle are of full 15 min). In 30 min we have one candle which is not having full 30 min data. Will it not distort the indicators/EMA/Envelopes? 2. In this strgty u suggested to use 15 EMA & 17 SMA envelope. Will this EMA-SMA combo will be in sinc or it has to be EMA-EMA combo? 3.From the chart i observed that somewhere we have gone below 15 EMA thereby hitting Bull SAR suggesting to reverse the trend. But the Bull SAR mark is lowered can u pl clarify whether some filters are used to mark the Bull SAR or it is to be more visual? 1. doesnt matter that much ...I have chosen 30 mins becuase thats what suits me .... if you are comfortable with 15 mins you can apply the same strategy in 15 mins. For that matter intraday players can apply this on 5 mins too. The only thing to keep in mind while shifting to a lower timeframe is that stoplosses will be small but whipsaws can be higher. 2. I just have access to SMA envelopes so i use SMA. Never tried with EMA envelopes so cant comment. 3. please tell me the date when you see bull SAR getting hit.... please understand just going below 15 EMA doesnt mean bull SAR is hit ... bull SAR is the lowest point made after testing 15 EMA ..... Cheers SH

8th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-7.html#post643050

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Originally Posted by VJAY Dear SH, Awaiting your entry/exit/adds rules?...are you using any filter for reversing trade? entries i have already posted (break of bull HL or bear LH) .. in current case bull HL is 5332 so a brak of it means square of longs and open shorts. Exit and add rules later today. Cheers SH

8th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-7.html#post643431

Quote:

Originally Posted by vinst 5340 (yesterday's low) Fantastic Vinst...spot on with 5340 Candle close doesnt matter as i posted previously. Bharti airtel gave a whipsaw...part of the game! Cheers SH

9th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-8.html#post643768

ignore freak lows .... just look at normal lows and highs. Unfortunately have been keeping very busy so havent been able to post additional rules yet. Hopefully over the weekend will do it. Cheers SH

9th February, 2012

http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-9.html#post643883 Quote:

Originally Posted by amol_gh123 Todays new HL 5343.90 ..Amol New high made so bull HL shifted to 5343 ... Please note how the mkts have closed at 5440+ with bull HL at 5343 (100+ point difference). So if mkts were to reverse tomorrow and hit 5342 to trigger our shorts we would have lost 100+ points from the peak. this is where exit zones (greater fool's zone) based on 30 mins charts comes in handy. (already covered in a separate thread). And this is the profit booking strategy here under this thread (you can also use 3 EMA reversal sometimes to book on gap ups etc) I will post about how to re-enter and how to pyramid over the weekend. Till then enjoy your best friend ..the trend !!! Cheers SH

9th February, 2012

http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-9.html#post643980
Dear SH, I am posting the chart of Gold for learning purpose. Sorry for the poor markings as my comp knowledge is limited. Pl discuss,how u would have traded this chart. Initially Long SLR was triggered & Then Short SLR was also triggered without much profit & then again Long was stopped. Have i understood yr method correctly.

10th February, 2012

Quote:

Originally Posted by rangarajan Dear Vinst, After the firstSAR for long, the stock pulled back to 15ema & again traded below the previous LL. Hence the logical s/l for short should be 1747 & not 1752. If it is correct,this s/l was taken & trade reversed to Long once again. I had marked it with an up arrow. For Long,the SAR to be 1724. Stock went upto 1751 w/o triggering 1724. My query is whether it is correct & if so whether the TWO failiures were part of the trading?If so,how to protect. Pl discuss. While gold broke the low then retraced to 15 EMA and then broke the lows again .. clearly all those candles are sideways moves and not trending moves....

So gold SAR stays at 1752.... however since now the range has been broken and gold has made fresh lows..you can shift the SAR down to previous lower high. Cheers SH

10th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-10.html#post644427

Quote:

Originally Posted by mangup Dear SH, I think what i undestood from the rule if Bull SAR is nothing but the retest of prices when it touches 15 EMA & making it is higher high in bull trend. This makes our Bull SAR. For eg.1 on 6th (12:30 pm candle) low touches 15 ema so low=5346.50 is our bull sar. Then 6th (3 pm) it breaches this prev bull sar. Should we have to reverse here.? one more eg.2 on 7th (2pm) low hitted 15 ema so low=5373 is our bull sar. next subsequent 3 candles closes below our bull sar. Should we assume our bull sar is hitted here.? One more eg.3. on 10th (12 pm) low hitted 15 ema. next candle closed below low should we assume this hitted our bull sar. Kindly clarify my understanding. Hi Mangup, Just hitting 15 EMA does not mean it is a SAR... SAR is lowest point with 15EMA touch between two higher highs... refer attached image...unless previous higher high is not broken by another higher high, u can not call candle touching 15 EMA as SAR.. i hope this clears ur concept of SAR... ..Amol

11th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-11.html#post644881

Quote:

Originally Posted by rajesh pawar Traderboy... On 3rd when the bull SAR is breached and you have entered short then that same point does not become your bear SAR. Bear SAR is the high formed between two Bull SAR. In this case bear SAR is the high formed at opening bar of 2nd. absolutely right rajesh, when bull sar is hit the previous peak becomes bear sar (843ish in this case). However its not necessary to be the highest point between two bull sars ..its just the previous high made by pulling up to 15 EMA. To explain my point, please look at the right hand side of the charts posted for RIL, if RIL falls and breaks bull sar at 839ish .... the bear SAR will be 10th Feb high and not 8th Feb high....however if the difference between 8th Feb high and 10th feb high is very small ..it becomes kind of double top hence its sensible to keep 8th Feb high as safer bear SAR Cheers SH

12th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-12.html#post645064

] horizontal white lines show the new high made so take previous low can be made our bull sar. Trader_boy

12th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-12.html#post645103 Dear all - adding the Exit, re-entries rules. Pyramiding later. Exit rules when trade running in profit We have to follow the greater fool zone strategy here. Please see this post to understand it more. http://www.traderji.com/technical-an...tml#post612691 We book profits when greater fool's zone is hit or hedge by buying some options that can be exited when nifty corrects to touch 15 EMA. I personally do not exit when the GFZ is hit first time(this happens after first breakout), however start exiting from second time. Profits should also be booked in case 3 EMA has not touched the daily candle in two consecutive days (3EMA reversal rule) Re-entries Once profits have been booked due to GFZ (greater fools zone) hit, re-entries should be done once 15 EMA has been retested. However to ensure that we do not get trapped into a correction that started from GFZ but is going to hit the SAR, we have to ensure that the markets show signs of taking support at 15 EMA and then only we reenter. So we need to look for strength being shown near 15 EMA to re-enter. I follow a simple rule here, once 15 EMA is touched by a 30 minute candle, I wait for the first green candle to close above 15 EMA after the candle that retested 15 EMA. the candle which retested 15 EMA is irrelevant, we need to wait for the next green candle and then we re-enter. The SAR stays as per the system and moves up only after a new high is taken out. Please see below chart to understand re-entry.

Please review the method properly and the trade. Like any other method this one is no holy grail, it will have its whipsaws every now and then and the key will remain to be consistent, patient and disciplined. Since 1st Jan we have been in an extremely rare uptrend so any trend following method (including this one) would look magical ... please dont get overexcited over this method ...trade safe with sound money management rules and dont overleverage .... Happy trading and Cheers ! SH

13th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-14.html#post645360

Quote:

Originally Posted by Tradewithhunter absolutely right rajesh, when bull sar is hit the previous peak becomes bear sar (843ish in this case). However its not necessary to be the highest point between two bull sars ..its just the previous high made by pulling up to 15 EMA. To explain my point, please look at the right hand side of the charts posted for RIL, if RIL falls and breaks bull sar at 839ish .... the bear SAR will be 10th Feb high and not 8th Feb high....however if the difference between 8th Feb high and 10th feb high is very small ..it becomes kind of double top hence its sensible to keep 8th Feb high as safer bear SAR Cheers SH Hi all, I would like to amend the above.... the SAR will have to be the highest/lowest point and not just the last 15 EMA touch .... Rajesh arora is absolutely right. Cheers SH 13th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-14.html#post645366
Quote:

Originally Posted by techtrader2 SH based on your experience how many points can we make in Nifty per month using this strategy? Also how many trades in a month and what is the winning % of trades? Thanks Techtrader - this depends on what phase the market is going through.... during times of good trends, one single trade can give 200-300 or more points.... I personally trade all my strategies together (swing, 315, market correction prediction) so my personal results may differ. However if one was to trade this strategy from March last year till now, the person should be sitting on around 3000+ points profit per lot. Cheers SH

13th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-14.html#post645419

Quote:

Originally Posted by VJAY Ohh sorry attached wrong quote... I would like to amend the above.... the SAR will have to be the highest/lowest point and not just the last 15 EMA touch .... Rajesh arora is absolutely right. Want to clear this ... Ok let me explain.... Lets see current trade ... Nifty longs with Bull SAR at 5342 ... nifty recent top is 5450.95 ...... Lets assume nifty makes a new high now above 5450.95... the bulls SAR will move to the lowest point between 5450.95 and the new peak i.e 5350 OR Lets assume nifty crashes now and takes out Bull SAR 5342 ...shorts will trigger our bear SAR will be the highest peak made i.e 5450.95 Cheers SH

14th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-15.html#post645675

Quote:

Originally Posted by amol_gh123 Hi SH, As per your sheet, on 7-Mar-11, there was a short from 5480.. agreed .... but as per chart attached SAR would have been 5552 ... but u have considered 5421 as SAR.. even though new low was not formed... can u plz explain for better understanding.... is it like, if new low is formed consider latest 15 EMA touch and forget the highest point between two lows.... ..Amol

my charts showed new lows at previous days new lows and the next gap up to 15 EMA before making fresh lows ...so SAR 5421 If that is not the case, SAR will stay at 5552. Cheers SH

14th February, 2012

http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-15.html#post645676 Quote:

Originally Posted by VJAY

Vjay - gap up above our SAR so we exit shorts immediately ... but opens in GFZ, so we wait and enter longs at 15 EMA touch. Cheers SH

14th February, 2012

http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-play-markets-16.html#post645677 Quote:

Originally Posted by VJAY Dear SH, how you traded this chart?...25th we are long ..SAR @ whiteline...here on how you would trade....no new high after that...if we exited @GFZ then clear cut reentry @11.30 of 31st...here are we wait for hit our SAR?

Yes unfortunately. What I do usually is after massive rallies and gap ups (SAR moves far away) I book profits in futures and take positions in options, that locks in some profits and reduces heartburns if SAR is hit. you would also see these 2 days were when 3 EMA was not touching for 2 consecutive days so another strong reason for booking profits and waiting for 3 EMA to get hit. Cheers SH

14th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-16.html#post645678

Quote:

Originally Posted by VJAY

This is extreme trend and yes after we book profits it will be the case of missed opportunity since it keeps falling without coming to 15 EMA ... but this doesnt happen often so worth sticking to the rules in long run. Cheers SH

14th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-17.html#post645817

Quote:

Originally Posted by amol_gh123 Thanks such for ur kind support... SH as per ur sheet short initiated on 11-Jul-2011 @ 5615.. perfect but for me as per chart, SAR 5515 got hit on 29-Jul-11.. and the trade turns into Long closing short... this going Long trade gave whipsaw and gave 51 point loss...why u didnt u close that position on 29-Jul ??? In ur case u close this position on 29-Aug @ 4888... even for me that is not SAR.. it would be 4970.55 (chart 2)... totally confused now ..Amol chart 1:

Chart 2:

Sorry my office firewalls block the charts posted but I just looked back on my charts... 5615 shorts on 11th July with SAR 5735 .... Nifty made a low at 5503 next day but 15 EMA not touched anywhere so SAR stays at 5735 Nifty stayed in this range (5735 to 5503) and finally gave a new low on 28/7 hence bringing down the SAR to 5711 (25th July high) you are right that trade was closed at 5515, longs initiated and then reversed to shorts with 60 point loss. From 5450 shorts again and nifty fell to 4721 non stop... Pardon me I missed that trade .... I just created that sheet in a hurry yesterday manually .... When you trade live with me ... you will understand the results better. Cheers SH

14th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-18.html#post645983

Quote:

Originally Posted by KID_of_MARKET

High is taken hence stop shifted to 5350 Yes, what is frustrating about last 3-4 days is that we have hit new highs 3-4 times but the bull sar has only moved 20 points up ....this is becuase each recent low has been higher than previous low but very close to it .... Lets see if we can get another correction to 15 EMA now and then a new high which can move our SAR in 5400 range Cheers SH 15th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-18.html#post646165 Nifty makes a new high now around 5500 ..bull SAR still at 5350.... GFZ above 5525 currently... This swing started at 4821 so around 680 points profit (530 points locked in) ... this excludes any additional profits due to booking at GFZ and re-entering at 15 EMA. Cheers SH

15th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-19.html#post646196 Hi all, Lets try and follow the same strategy on 5 mins charts too for traders who want smaller stop losses .... no greater fool's zone and this method should be followed on just SARs. 5 minutes trade: current longs with bull SAR at 5395 30 mins trade: current longs with bull SAR at 5350 Cheers SH 15th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-19.html#post646243
Quote:

Originally Posted by NTrader42 Hello SH for 5 Mins, should it be traded only in intraday mode, without carrying position to next day? Thanks NT Can be carried....

16th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-23.html#post647068

Quote:

Originally Posted by NTrader42 SH For the 5 mins system, How about taking trades only in the direction of 30 Mins swing trade ? Effectively becomes a nice system to sacle-in / scale-out with the swing trade. Thanks NT Yes can be done. I am running with 5 mins experiment here in forum to showcase why I always recommend trading on larger TFs cheers SH

16th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-24.html#post647145

Quote:

Originally Posted by Bakul Shah Sir, How about working with 15 min period. It may better result than 5 min!!! Bakul Yes, 15 is worth trying ..... (no experiments here) If SAR on 30 seems to be too high ... 15 can genuinely be pursued (i personally do look at it while trading) 15 mins - longs booked at 5517 today (4888 to 5517 profit 630 points) This short has SAR 5566 Cheers SH 24th February, 2012 http://www.traderji.com/technical-analysis/66593-shs-swing-trading-system-simple-way-playmarkets-28.html#post650552
Quote:

Originally Posted by thanibee Is the bear SAR at 5541.8 now? Since it has expired (Feb. Futures), and we will be using March futures data from tomorrow, how is this going to affect? March Futures Bear SAR is 5591.25. Which one should we use as the SAR? Thanks In such cases please refer to spot prices. Nifty spot has made a new low today so 5537 spot becomes new SAR. However on NF March charts recent highs are 5563 highs so you can use either 5537 spot or 5564 NF as new SAR March series shorted from 5639 SAR 5564 now Cheers SH