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Wednesday, May 27, 2009

How Have I Made Rs. 1,65,638 By Trading ABAN? Simple Swing Trading Technology

 want to declare to my readers that I have made Rs. 1,65,638 in the last 2 months just by trading one stock, ABAN. But how??? As usual all my rules are simple. As simple as a novice can trade it like a pro. Its a buy only strategy. Buy when price closes above 5 Days Exponential Moving Average (DEMA) after a continuous and prolonged fall and sell/exit when price closes below 5 DEMA. Thats all, and My God!!! You are in profit.

Let me illustrate my trades (I always trade 1 lac for each stock):
  1. 13/03 - buy @ 256
  2. 21/04 - sell @ 470 (profit of Rs. 83460)
  3. 24/04 - buy @ 489
  4. 27/04 - sell @ 426 (loss of Rs. 12852)
  5. 08/05 - buy @ 452
  6. 27/05 - sell @ 882 [profit of 95030 (ABAN is a hold till now as its above 5 DEMA, sell shown for illustration)]
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Total Profit - Rs. 1,65,638

 
So, where to get all these datas, which stock is closing above its 5 DEMA? Again simple. all Nifty-50 stock's end of day (EOD) charts available in this blog at EOD Charts section. Thanks to http://www.icharts.in/, all levels are shown in the charts itself. Your job is very easy. Just pick your favourite stock and go long in it. Keep a standard 5% SL for all swing trading activities. I need your comments to take this discussion to further heights. Cheers!!

18 Comments:

Joshi's Blog said...

Thanks for ur great post. Now, I m going to try this from tomorrow onwards.

Thanks once again,

Joshi.

satty87 said...

wonderful man u rock......isse simple aur kya chahiye.....thnx for sharing the idea...happy trading

Nikesh Goyal said...

Test it on top 100 scrips of nifty and post the results here.

Indrajit Mukherjee said...

Yeah Joshi, look for a continuous downtrend and then a close above 5 DEMA.

Indrajit Mukherjee said...

You are welcome Sattar.

Indrajit Mukherjee said...

Nikesh, actually posting all backtesting is definitely beyond the capacities of this post. I can say it is a simple idea, for those who wants to keep life simple and stick to a particular system. Of course this system has some limitations as any EMA based system doesnot work in sideways market, but definitely profit percentage will outperform the losses and will bring u decent money.

Nikesh Goyal said...

I sincerely respect your comment. I will do the testing myself and will give the results here for all scrips for 5 EMA system.
Things I think shouldn't be taken obvious. I have done one work on nifty and that work told me that 2/3 time market moves in 0.5%-1% bracket for a week. That's may seem astonishing but that's true.
Secondly, in most of cases options are not available for such stocks. So a big downfall will swipe all money with you may be 3 years profit alone.

Indrajit Mukherjee said...

Nikesh, I agree 100% with u, and eagerly looking forward to some backtest results. I told to keep a 5% SL for all positions, hopefully that will save a trader from big losses. And stock market is all about running ur profits and minimising ur losing trades.

Nikesh Goyal said...

I like the spirit...

I was thinking of putting all like minded "traders" (only traders) to one platform.

The platform would enable us to discuss trading systems, strategies, setups etc. I know some traders have **secrets** but most of us knows that *secrets* never work in stock market.

What's your view about that?

Indrajit Mukherjee said...

Haha, secrets, i hate about the word. So far I feel, the actual secret is to control ur mind, coz we cant control the market. And secret, may be patience to stick to a particular system.

Indrajit Mukherjee said...

Nikesh u can join our forum, its a new venture and non profit forum. Traders like u r welcome. Any other ideas can also be shared at my e-mail id.

A Student for Life, of Life (and of Markets) said...

Hi,

I like the simplicity of the strategy. It will surely work in a good trending environment.

My concern is when the market goes into a prolonged sideways move. Will it still work or will it generate a lot of small losses adding up to a big amount of loss? Do you have an indicator that helps you avoid trading in these times?

Here is wishing you more profits from simple strategies ....

Indrajit Mukherjee said...

yes student it will not work in prolonged sideways mkt. but, see first i have told to enter only after prolonged down move. and if u wish u can consult some momentum indicators. but discussing that is beyond the scope of this post.

A Student for Life, of Life (and of Markets) said...

Thank you Indrajit. I guess what you are saying is to catch a turn around using 5 Day EMA "after a prolonged down move". Yes, that would work - anyone astute enough to detect beginning of an uptrend can use this to make a lot of money. Thank you again.

On a separate topic could you share your thoughts on trading in Bharti?

Indrajit Mukherjee said...

you are welcome. i shall definitely try to discuss.

Techsavy said...

Dada,

Thanks a lot for a stratgy...But I have couple of questions:

1) Why you choose Aban.
2) How to choose such a stock.
3) Its ovious that I cant use this theory on all the stocks. So kindly tell how to choose the right stock for this 5 day EMA theory.

Thanks,

Sitesh

Indrajit Mukherjee said...

Techsavy,
Look for a stock in prolonged downtrend and the peers in same industry doing much better. So ur stock can also be ready for a run. See Aban was underperforming all other shipping stocks.
Regards,

krunal shah said...

HI INDRAJIT I LIKE YOUR THIS STRATEGE OF 5DEMA BUT WHEN WE BUY/SELL AT 5DEMA HOW DO WE UNDSTND THT WHERE WE NEED TO BOOK PROFIT ..PLZ MAKE THIS THING CLEAR...THNX

KRUNAL.K.SHAH

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