Nifty Fifty

Strategy Intent

Trading Criteria Details
Market Suitability All markets but will work faster in a Bull market when volatility is higher
Difficulty Beginner
Strategy Type Contrarian Trading
Take Profit
DCA
Positive DCA
Pending Orders
Trailing Stop Loss
Published
Demo Server

Note:

  1. Click the cloud icon to view the demo server for this strategy;
  2. Note if the cloud icon is showing in red it means the demo server is not available right now;

Strategy Overview

  • The intent of this strategy is to follow the professional traders.
  • This strategy is named after the Nifty 50 which is India's benchmark stock market index for their equity market but also because it makes use of the 50 period moving average and multiples thereof.
  • This strategy also makes use of a compressed timeframe Bollinger Band to highlight potential entry and exit areas in a similar way to the way Connors 2 period RSI compresses time.

Entry Criteria

  • The basic premise behind this strategy is to follow one of the professional traders tactics as follows:
    • professional traders look for upward trends using the 50 period SMA. They usually combine this with a 200 period SMA.
    • once they identify a strong upward trend they will buy a large position in the opposite direction to the trend.
    • the retail traders see this large sell off and immediately sell their positions.
    • when the retail traders FUD sell off gains momentum a pull back occurs.
    • the professional traders will then take a long position at a much lower price than they could have gotten earlier.
  • trailing buy is turned off as we are buying into an uptrend.

Trade Management

  • The strategy applies the 2% and 10% rules of trading.
  • Position size is limited to 2% of risk capital per trade.
  • Only 5 trading pairs are active at any time to ensure no more than 10% of total risk capital is employed in trading at any time.
  • A trailing stop loss is employed rather than a fixed stop loss.
  • Take profit is employed to prevent loss of profits.

Exit Criteria

  • the professional traders will follow the upward trend and remain in the trade until the trend changes to maximise their profits.

Strategy Tips

  • This strategy relies on finding strong upward trends so while it will work in all market conditions it is best used in a Bull Market.
  • The key to this strategy is to identify trading pairs with strong upward trends, typically best done in a bull market but they do occur in bear markets as well just not as often.
  • ensure you do not overextend yourself by getting your max trading pairs and initial cost right to suit your trading budget.
  • Use the DCA calculator we provide to work these values out covering at least 4 levels of DCA for all your pairs. Once you have those values enter them into this strategy. The DCA calculator also ensures you have a 50/50 split on your trading budget to ensure you have sufficient budget for the sell side of this strategy.


TOP


  • niftyfifty.txt
  • Last modified: 6 days ago
  • by cryptocoyn