MY STYLE - BLOG
NON DISCRETIONARY trading
Finally after several years of working on discretionary trading, I have been able to design a system that is completely non discretionary. The motivation for this came from the deteriorating quality of trades on Nifty Futures which were caused by excess volatility where emotions tend to make systems go haywire. See todays trades on BankNifty futures through this system, the same one that we use also in mentoring and training traders through our mentored trading program.(click to expand picture). The Kagi representation is just one of the many ways that one can look at price movement and we chose that for this illustration. Otherwise, we could use time bars, point and figure, renko or anything else. The price movement basis is all that really matters. The trades seem to just flow with the trend. Backtests give success rates ranging from 45% to 70% based on the parameter selection. One revealing observation is that reversal trades - those that remain active till the price reverses trend are the most successful trades and beat risk based as well as fixed target trades in all time frames. One also needs to be sensitive to the natural frequency of the wave movement of each instrument to some extent as that affects the success ration.
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Abnash Singh, Am a Trader helping small traders to realize their dreams.