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MySAR is the price level which guides us for the trend of the market for that particular scrip and for that particular period. Price has the tendency to go up if it crossed MySAR level with conviction and has tendency to go down if it breaches MySAR level with conviction.
Hence once can take a buy call if price crosses MySAR from below with conviction and remain in buy mode so long as price remains above MySAR level. Similarly one can take a sell call if price breaches MySAR from above with conviction and remain in short mode so long as price sustains below MySAR level.
MySAR simply
guides us for the trend, but remains silent for target and stop loss. Hence we
have to take the help of other tools such as daily – weekly pivots, daily -
weekly high/low ema, high/low made today and in last two days etc to decide the
level of target and stop loss. The stop loss should be put at such a level that
it is not eaten away by the market easily and then bounce again.
For trades of Nifty future, generally 20/25 points stop loss is advisable, while for trades of BankNifty 60-70 points stop is recommanded.
MySAR technique is more advantageous when at least 2 or more lots are traded so as to facilitate partial booking of profit and riding the trend. Due to partial booking of profit, one
- can easily ride the trend,
- can keep his funds released to re-enter the trade,
- can protect the employed funds easily.
Profit should be booked at 40-50 points of price movement in case of Nifty future trades and 70-80 points in case of BankNifty future trades. Once profit is booked the stop loss should be trailed to the entry price.
Watch higher time frame price movements and trade in lower time frame.
Take each trade with self confidence and without any fear of loss. Even if you have to incur any loss due to stop loss or gap up/down opening etc, accept it with smiling face and try to recover it in the next trades, but step by step….never intends to recover it wholly at once in the next trade.
Keep habit of transferring profit to your personal a/c and do not keep it with broker’s account so that you are not tempted to trade for more quantity. Keep only required funds in broker’s account and not too much.
Keep habit of transferring every month some parts of profit earned into safe investment like gold/silver, bank fixed deposits, any good sip schemes etc.
EMA rules :
Price above
Lowema......it is a Buy on dips....for Highema ++
Price above Highema...Hold buys...Because upward momentum has been picked up.
Price below
Highema...it is a Sell on rise ...for Lowema --
Price below Lowema.....Hold shorts...Because downward momentum has been picked up.
What you have to do.....???
Do spare 1 or 1.5 hour daily to do some homework before opening of the market.
Download excel file from the link given in the blog http://mytradingtechnique-mysar.blogspot.com/
Note down
the following numbers on a piece of paper or in a note book page.
(a) MySAR
(b) daily 5Highema & 5Low ema, (c) weekly 5Highema & 5Lowema,
(d) daily
pivots along with mid points (e) weekly pivots along with mid points.
(f) High and
Low made during last two days.
(e) after opening ORB of the day
Co-relate the above mentioned numbers with the price movement and take decision
- (a) for taking fresh entry of the trade.
- (b) for booking partial /fully profit and
- (c) for deciding stop loss level in such a way that it is not easily eaten away by the market.
Keep the
full records of daily trades
Examine the trades done during the last few days and try to locate the mistakes if any committed and try to learn from those mistakes.
How to use MySAR Levels :
1…MySAR
levels guide us about the market trend for that particular commodity for that
particular day only.
2…Price tends
to move up above this MySAR level and tends to move down below this MySAR
level.
3…One should
remain in long position so long as price is above this MySAR level
and should
remain in short position so long as price is below this MySAR level
4…One can enter
into a long trade when price crosses MySAR level from below with conviction and
remain in long position till the price remains above MySAR.
5…One can enter into a short trade when price breaches MySAR level from above with conviction and remain in short position till the price remains below MySAR level.
Rules to be followed strictly
1. In fact, the system is meant for positional trading specially for future segment, but one can enjoy intra day volatility by watching MySAR_A levels carefully.
2. MySAR are levels are derived daily on the basis of EOD and they are to be applied on the next day, hence I have termed it as MySAR_A (MySAR applied).
3. MySAR level guides us for the trends of the market for that particular script for that particular day. Price tends to go up above this MySAR_A level and tends to go down below this MySAR_A level.
4. Hence one can keep long position so long as price is above MySAR_A level and keep short position so long as price is below MySAR_A level.
5. Always enter into a long position when price crosses MySAR_A level from below, and enter into a short position, when price goes below MySAR_A level from above. Means never try to catch the running train so as to avoid the risk of accident.
If the scripts has ran up or down too much from MySAR_A level, please please do not enter into a trade of either side because script may bounce back at any time. e.g. TCS triggered for long trade on 6th Sept at above 847 ran up too much. For 1st Nov its MySAR_A level is 1124. Here as per My Trading Technique of SAR, long entry is not advisable though the script trades above 1124, because it has ran up too much. Of course it may go up further, but it may invite risk of accident of bounce back any time, or such type of trade may give little profits only. Here one should wait and seek the opportunity for the short trade at the breach of MySAR_A level.
Better wait for the hit of MySAR_A level for any trade. Patience pays...............
6. In this system, one is required to remain in trade either long or short for a long period of time.
7. At the point when price crosses, MySAR_A level, one is required to cut is position and reverse it soasto minimize the effects of whipsaw.
8. After
entering into a trade at the breach of
MySAR_A level, if price goes against the expectations and again crosses
the MySAR_A level, one is required to wait for 5 – 10 minutes and then again
reverse his position.
e.g. If you enter into a long trade at the breach of MySAR_A level of 5384, if price goes up….upto 5395….5405…..5415…and if you do not book profit either partically or totally, and if suddenly price starts declining …..declining….and goes below our MySAR_A level of 5386, then in such circumstances you are required to wait for 5 – 10 minutes and if during this time period price goes on declining with volume, you have to cut your long position and enter into a short position without any much more delay because price tends to go below MySAR_A level.
Of course, you have to face certain number of whipsaw in such circumstances, but after the completion of certain time period the effects of whipsaw can be nullified only if you reverse your trade, and that will give you more returns in total.
Again you may also consider the levels of 5EMA, Day’s High-Low, Previous Day’s High-Low etc. to reverse your position, if the price goes against expectations.
9. It is advisable to take position for 2 - 4 - 6 - 8 - 10 lots depending upon your investment capacity. If the lot size is too much large take position for few lots only so that M2M can be managed easily. Multiple lots are advised to be traded sothat partial profits can be booked in between. At least two lots should be traded to get the requisite return of the employed funds.
10. Always keep 25% of your investment capacity reserved for M2M and other contingency events.
11. Always book partial profits in case of gap up / down opening.
12. To facilitate fresh entry of trade, always put alerts at MySAR_A levels for all the scripts before opening of the market sothat whenever price reaches to MySAR_A level, it becomes easy to take fresh position for that particular script.
13. Keep position alive for few scripts only. Means do not take positions in so many scripts that it becomes difficult to takle all. e.g. It is advisable to take positions for 2 lots of script A and B, and not 1 lot for script A, Script B, Script C and Script D.
14. Always stick to the selected scripts for trading and never jump from one script to another script frequently.
15. For example take position for Nifty 4 lots, Bank Nifty - 4 lots and along with these, select any one or two scripts for trading and try to stick to these selected script for trading for a certain longer period of time. Of course, you can change the position size as per your capacity.
16.This
trading technique is more beneficial and gives more return if atleast two or
more lots are traded. In that case. one should book profit in between for one
lot, and ride the trend for the second lot.
