BankNIFTY Intraday System with Parabolic Sar

If you want to view the whole discussion in format of discussion. you can check here - https://www.evernote.com/l/AHS5nU3WnU9JUqLoJCmU6u_P83ZBFADBCac/

Have you guy heard of Welles Wilder?

“Some traders are born with an innate discipline. Most have to learn it the hard way.”

He is from 1930s.

Mechanical Engineer.

Right now it is pretty normal that even someone who has a chemical engineering degree ends up an electrical engineer. Back those days, this was very unlikely. So those traders back then was highly unlikely that someone being an engineer with become trader.

So -
When Welles came, he didn’t understood fundamentals of anything at all.

He was didn’t like that fact when things starting going out of their direction people kept them holding telling it is valid trade. We often emotionally reprogram yourself to convince our bad trade is correct one.

It’s psychology.

So, he tried to develop math-based models and indicators.

One of them is RSI !

You guys know RSI indicator right?
Heard of ADX (Average Directional Index)?
Heard of ATR (Average True Range)?
Heard of Parabolic SAR?

He created the whole foundation of technical analysis with logical steps and explanations. The only goal initially was to “After finding a correct investment, When is the correct time to invest

If you’re reading old books, you will often hear - " You can not time the market!"

But We definitely can time the market with a higher probability of winning!


Today @biren spotted an entry. He made 100 points (So did I - copying the idea).

The timing was apt. See, it exactly rose like a shark. Exactly touched TP and fell.


This is another example - https://in.tradingview.com/chart/INFIBEAM/3zeCv8Vv-Infibeam-Cup-and-Handle-Weak/


That guy created many indicators we use today.
Upon them RSI is the most popular one because it was the first one to be popularized amongst whole America through other articles, traders, books.
But the most advanced of his creation is ADX
He himself said it.

Here is a lovely interview - http://www.tradingbook.org/trader-interviews/welles-wilder-trading-legend (edited)
Read on free time.

Here is his short bio - http://thebestbusinessintheworld.blogspot.com/2010/05/welles-wilder-father-of-rsi-sar.html

The indicators were made for the commodity market.

ATRs are used by fundamental traders to determine their stop loss. So large money moves ATR. Huge moves happen if ATR stop loss triggers.

Today Muthoot Finance was an ATR buy when it fell 10% and it suddenly shot 10% up.

Why on Earth I am telling these story of this guy?

Add this indicator to Zerodha.
Let me know when you do it.

1 Like

Just show a reaction.
I guess people are reading that site.
Let me know when you guys come.
I found out a sophisticated method which you can use for intraday trading like badass.
The background history was needed to make you understand the passion behind this indicator.
BankNIFTY opened today at 26494
Before you begin trading you need to understand what is gap trading. You can google on it but I will give you 1 liner gist.
Let say “shit gapped down”

Think reverse way.
Open 5 minutes chart.
Think about the guy who has no positions.

He has two things to do -

  1. Just short that “shit” with red line as stop loss
  2. Close that trade if red line is hit.

Now think reverse
If red line is hit “No normal intraday trader will keep their short open”
Now as tons of people are thinking reverse :rolling_on_the_floor_laughing: Obviously

Many will keep buy limit at that red line.
if that red line is touched he will buy it.

Next question is
Why the hell it is reversing from blue arrow.
Like this is paranormal and unpredictable.
Randomness?

Who is the first?

Chicken or Egg?
BankNIFTY is main? Or BankNIFTY futures?

Bullish harami is forming after the reversal is starting !!!
But how can we do astrology by predicting it correctly.
Is the main point :slightly_smiling_face:

NIFTY Bank !

Remember in morning I told that if 26200 PE is crossed 20 there is no way BN will fall.
BN will stay above 26200?
So you can safely assume big people will do things to make things in their way.
Europe was falling harshly and we were doing consolidation.
Lets leave it
Thats not the point
Red line i.e SL is not touched for shorters.

===================================
So -
If someone has longed it and kept the target at day’s high. He saw bulk truckload profit and then it his SL :awyeah:
The core concept of support and resistance is flawed. It will always be a ±% randomness there to take people’s stop losses out (normal people’s)

So, I told about two important things

  1. Support and Resistance
  2. Gap
    Read more on Gap and shit here - unofficed.com/planning-day-trading-with-limit-orders-and-tradingview (edited)
    ==================================
    Now I will tell about the parabolic SAR!

Another core fact = “Nifty Bank is the chicken and comes first. Futures is manipulated to hit everyone’s stop loss”


Nifty Bank Opened at 26300.
Now pick any strike price which is ± 200
Let’s pick up 26400 ! :slightly_smiling_face:
Now pick a timeframe
5m or 10m
Today is weekly expiry

Lets take 5m

Movement will be fast.
For tomorrow you can do with 30m too
Ok :slightly_smiling_face:
Pick PE or CE
You pick and tell
Take current expiry.
You should take BankNIFTY 6th December 26400 PE


Or the CE does matter!
Can you guys open this chart?
Do this and do a tick. Or, You won’t understand anything later

Chalo 5 people did a tick. You will make others understand if needed lol.
I’m telling.

  1. Look where is that ParSar (Short name for Parabolic Sar)
    If it is on down which is the case here; it means it is uptrend.

We define uptrend on our own rules right? Like bounce is a strategy with swing highs and lows to tell what is uptrend or downtrend or sideways.
In this case, it is either uptrend or downtrend.
There is no concept of sideways.

As per point 1., It is buying oopurtunity!
2. Look for Support and resistance and Gap in case of gap down or gap up

The black line is gap SL.
The red line is hard SL.
Gap SL means you should exit there as it is triggering gap trade. But it also means as the SL is too near, it can hit and then hit your target.
Red line is no compromise SL.
If you keep your SL closer, it is doubled-edged sword folks :slightly_smiling_face:

It can hit your SL often if SL is kept lower and also it can save you from a big SL hit loss lol.

You choice yourself as per your mood.

Bachelors will do red, Married will do black

Now.



Focus.
This method is for ultra leverage people. Those who buy 10 lots with a full margin!
Quick recap - It is in uptrend
Now if you see -
1. As time goes, the parabolic SAR is moving nearer to the candle
Right?
2. So, if a candle moves away (away means in our direction :awyeah: ) then trade will last even longer
3. So, if a candle does BS and goes nowhere, it will HIT and give us exit.

If you buy or sell, start with 5 lots (as example)
reduce positions time to time the moment it starts inching closer !! :slightly_smiling_face:

“Why it can not be automated?”

  1. It is ultra leverage and can blow up margin immediately on mistake.
  2. Human mind is more better
    We track -
  3. Europe market
  4. Twitter
  5. Ketley on TV
  6. Other shit on TV
  7. No shit on anywhere (Like today’s middle half)
    https://i.imgur.com/vFciVXe.png

Buy trade - Good money
Sell trade - No money
Buy trade - No money
Sell trade - No money
Buy trade - Good money

Then you see a bearish candle.
You short with a tight stop loss.
An example which is too complicated for an also to understand

Then a big move happens
Now what is your stop loss?
Last candle’s high
See how it is perfectly manipulated to maintain so so awesomely!!

The next trade is even more dramatic.
Blue is entry
Red is SL.
You can keep moving TSL on candle’s low like previous method.
You see after this buy is done and a ssell call is triggered it made no money
So -
Basically you are losing brokerage mainly in trades that is not giving profits.
Even if you lose, chuck it.

Always choose one strike price only and one call or put !!

Because if system triggers 26400 PE buy, it may trigger 26200 PE sell.
You will have a headfuck.

Check examples and try from tomorrow. I am doing it for some times now
You might have seen me seeing options’ chart in my youtube live when I do.
Don’t try on stocks,stock options or any other place or shit. Only BN. Because unlike US, everything in India is sort of illiquid.