NIFTY trend change finder - 9ema

Hi friends

This is one of the trend change finding methods using 9ema.   Method is same but with some minor modifications by KK’s factory

Method :

• Calculate 9 days EMA for nifty
• Calculate the difference between previous days 9ema and current days 9ema

Copy the formula for the entire historical data set.

Now you can find  difference  as  +ve number series   or  -ve number series basis the current trend  which is going on.

When to enter the trade ?

If the current trend is UP  and accordingly  difference will be +ve numbers.  When the number changes to –ve  and difference is more than -0.06% of current days close value, then SELL

Similarly,

If the current trend is DOWN and accordingly the difference will be –ve numbers.  When the number changes to +ve  and the difference is more  than +0.06% of current days close value, then BUY.

Accuracy of this method is almost 85 to 87%

Kindly back test with past data and confirm your findings.

Thank you

Candle patttern identifier

This is an attempt to make the candle reading easier to the layman like me.

This excel sheet is a result of that thinking  where in formula are fitted in an excel sheet  so that,  just by entering  open high low close  values of any stock or index,  the system will identify the candle pattern and give some general interpretation of the same.

I had posted about this in a social site called mudraa   and link is as follows

http://www.mudraa.com/trading/166885/0/candle-pattern-identification-formulas-in-excel.html

Those who want this excel file can write to me with your email id.

Some more work on this is still going on ....  More revisions of this excel sheet will follow

Trend reversal identification is child play now

This was an attempt to find out a simple method  to identify the trend reversal  for the common man who don’t know to much about any technical software or any other tools.

Method :

Compare todays closing price with 6 day prior  closing price.  ( can be used for stocks as well as nifty ).

If the current closing price  is less than 6 day prior closing price,   then “SELL”
If the current closing price is greater than 6 day prior closing price,  then “BUY”

Here no calculation,  no formulae is needed.  Only visual inspection is enough

Eg:    RANBAXY
Date           Closing price
20/1/12         468.35
23/1/12         463.45
24/1/12         467.70
25/1/12         474.50
27/1/12         443.90
30/1/12         450.65
31/1/12         449.55

here in this example,  as on 31/1/12,  the closing price was 449.55.    5 day prior closing price is  463.45.

So, the current price is less than the 5 day prior closing price.  Therefore it is  SELL as per this method.

Simple trading strategy for common man like me (13-23 or 19-31 method)

This was an accidental discovery.  But i myself is really surprised about the accuracy level of this method.

Method :

This is a simple method,  which tells you when to buy or when to sell.   13 - 23 method works well with stocks in the price range of  Rs 150  to Rs 350

For nifty,  19 - 31 method works very well.
You have to sum up  all the digits of the closing value  of (any stock   or nifty ) whichever you want to study.

Assume that you want to study nifty.

You take the closing value of nifty on any day and sum up all the digits including the decimal part of it.
If the sum is less than or equal to 19,  then BUY  next day.
If the sum of greater than or equal to 31,  then SELL next day.

eg: 

if nifty closing is  5281.20  then the sum would be  5 + 2 + 8 + 1 + 2 + 0 = 18  which is < 19.  So it is a BUY

if nifty close is  5339.75  then the sum would be 5 + 3 + 3 + 9 + 7 + 5 = 32  which is > 31,  So it is a SELL.

Thumb rule to find out actual level of nifty at any give day

The idea behind this method is to find out what would be actual level  of nifty on any given day irrespective of how much high  or  low  it has moved.
Studying the historical values of nifty,  it has been observed that,  nifty moves  on an average approx  11  to 12 points (up  or down)  in a day.  Taking this as a bench mark,   we tried to find out the actual value of nifty on any given day  basis the time period you want to calculate the level.

Method :
Suppose one want to know the actual level of nifty in the last 10 days duration,   we find the maximum value of nifty in that last 10 days period  and also find the minimum value of nifty in those 10 days.
Calculate the number of days  “D1”  between that high (max value of 10days)  and the current day.
Similarly we calculate the  number of  days  “D2” between the  low  (min value of those 10 days)  and the current day.
Calculate the actual value of nifty as follows :
N1  =  Max nifty  - (D1 x 12)   
N2  =  Min nifty + (D2 x  12)
Actual level of nifty on the current day  =   (N1 +N2)/2


Studying historical data of nifty, we observe that  NIFTY takes on an average approximately 92 trading days to scale 1000 points in UP move.  Similarly it takes approximately 74 trading days to scale DOWN 1000 points.
This means that on average the movement of nifty per day is 12 points (approx).
The recent high of nifty on 28/10/11 was 5399
on 23rd nov 2011, nifty made a low of 4640.
Suppose we assume that, 4640 is the low and nifty is moving upwards with 12points a day, then the current level of nifty should be
4640 + 12x5 = 4640+60 = 4700
Similary, if we assume that 5399 is the high and nifty is moving downwards at 12 points a day then,  the current level of nifty should be
5399 - 12x 20 = 5399 - 240 = 5159
therefore,  the exact level of nifty should be = (5159+4700)/2
                                                                     =  4929.50


Conclusion :
What we try to do here is,     from the high point of those 10 days,  if nifty move down as per the average (12 points)  every day  it should reach a particular level.   Similarly  if nifty move up from the lowest points of those 10 days  at a speed of 12 points in a day,  it will reach at some level.   We calculate the average of these two levels,   which should be the actual level of nifty at any given point of time.