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Intraday trade using gann angle

In my book on "Gann Method" though I have explained various principles of W.D.Gann's method and  its application on the stock market but the one which inspired me a lot is  "Gann angle" principle. The Gann angle is defined as the set of trend lines drawn from an individual price point or from different price points (i.e. high, low, and midpoint) in order to identify the supports and resistances of a future price move.  At this stage, do not worry much about this definition. It will become simpler as you proceed to the next part of this article.  The next big thing about the gann angle trend lines are that they are drawn at a particular angle with respect to the X-axis or to the time line. This concludes the basic formation of gann angle trend lines.

Now let me explain this concept with the help of an example. Say I wish to draw a trend line at 1X1 (read it "one by one") gann angle. This means my trend line is a straight line drawn in the price time chart which makes an angle 45 degree with the X-axis.  You must ask me that how I have derived the 45 degree. Quite simple! This is a trend line drawn assuming 1 unit of price change happens with 1 unit of time change. If I will plot 1 unit of price change with respect to 1 unit of time change in a semi log scale and measure the angle with the help of a protractor I will get the angular measurement as 45 degrees.

 For making an intraday trade decision we need a point to make buy or sell entry. We need a stop loss point and couple of target points. Though this job can be done with any guess work but we need perfection. The perfection will be achieved only through the mathematical calculation which is accepted by the market.

W.D.Gann has given us 11 different trend lines which will guide us in making a trade decision.  These trend lines are drawn based on the geometrical angle proportion in X and Y axis. For example the 2X1 (2 by 1) trend line is drawn assuming the 2 unit of price raise or fall happens in 1 unit of time.  This trend line makes geometrical angle of 63.75 degrees with X-axis when drawn from a lower price point and projected towards the higher price points. Similarly this trend line will make 26.25 degrees with respect to x axis when it will be drawn from a higher price point and project towards the lower price point. This is the mathematical logic available in origin shifting, parallel line algorithm.

 Now the 11 sets of trend lines from a lower price point towards the higher price point are as follows  1X1, 1X2, 2X1, 1X3, 3X1, 1X4, 4X1, 1X8, 8X1, 1X16 and 16X1.

 The geometrical angle made by these trend lines with the X axis in an up move corresponding to 2X1= 63.75 degrees, 1X2= 26.25 degrees, 1X1= 45 degrees, 1X3= 18.75 degrees, 3X1= 71.25 degrees, 4X1= 75 degrees, 1X4= 15 degrees, 8X1= 82.5 degrees, 1X8= 7.5 degrees, 1X16= 3.75 degrees, 16X1= 86.25 degrees.

 The geometrical angle made by these trend lines with the X axis in a down move corresponding to 1X2= 63.75 degrees, 2X1= 26.25 degrees, 1X1= 45 degrees,3X1= 18.75 degrees,1X3= 71.25 degrees,1X4= 75 degrees,4X1= 15 degrees, 1X8= 82.5 degrees,8X1= 7.5 degrees, 16X1= 3.75 degrees,1X16= 86.25 degrees.

 Gann Formula for calculating the support and resistance:  In gann study the 180 degree is considered as factor 1. This is because between the sun rise to sun set the solar motion happens approximately 180 degrees and it is considered as 1 day time.

 The 2nd universal concept accepted by the financial analysts is that the supports are always calculated in a falling trend and it used to be calculated from the high.

 The 3rd universal concept accepted by the financial analysts is that the resistances are always calculated in a falling trend and it used to be calculated from the low.

 Gann formula for calculating the support and resistance is as follows:

 Support = (square root of (high)- Degree factor)^2

 Resistance = (square root of (low) + Degree factor)^2

 Trading Rules as per gann and as modified by me (Soumya Ranjan Panda Author of this article) 

1. The 3rd support or resistance of any price move is important (as per W.D.Gann).
2. In intraday trade 45 degree support break (1X1 support) will favor sellers and 45 degree resistance (1X1 resistance) break will support the buyers. Provided the annual volatility of the trading instrument  must be higher than 50% (as per my own research )
3. In low volatile or medium volatile market (i.e. the annual volatility of the trading instrument is less than 50 %) the (1X4= 15 degree) resistance and (4X1=15 degree) support must be utilized for long and short entry provided no congestion or entry error should be present in the calculated price. (as per my own research ) 
4. If sell entry price at 15 degree or at 45 degree  greater than buy entry price at 15 degree or 45 degree price point then it is considered as error and rectified by changing calculation procedure from the high and low to mid point of high and low. This says that instead of calculating the supports down from high and up from low you can calculate the same from the mid point of high and low (as per my own research ) 
5. If the price unit of the trading instrument is a 4 digit number then between the buy entry and sell entry price at least 5 unit difference is required to take unbiased decision as per this principle or else it is considered as congestion and it is rectified by changing the high and low to mid point. (as per my own research )  
6. If the price unit of the trading instrument is a 3 digit number then between the buy entry and sell entry price at least 3.5 unit difference is required to take unbiased decision as per this principle or else it is considered as congestion and it is rectified by changing the high and low to mid point. (as per my own research ) 
7. If the price unit of the trading instrument is a 2 digit or single digit number then it must be converted to 4 digit number by the way of multiplying it with 10 or 100 or even with 1000 and the resistances and supports will be derived from the 4 digit number. And the results need to be dividing by the multiplier to reconvert it back to its original form. (as per my own research )
8. The smallest time interval in which you can identify the high and low is 5 minuets after the opening bell or the highest time interval you can consider is the 1st 15 minute after the opening bell.  Any auction period must be ignored. Like now in Indian market 9 a.m. to 9 :15 is considered as call auction period. Hence the data from 9 a.m. to 9:15 a.m. must be ignored (as per my own research )
9. If any trade of yours triggers the stop loss or trailing stop loss then do not reenter the  trade in the same direction again. 
10. As a day trader speculation is my profession and I will follow these calculations like religious testimony.

    Example:  on 11th November 2010 SBI between 9:15 to 9:30 a.m. made high 3238.35 at 9:16 p.m.  low 3214.10 at 9:27 p.m.

     Below given are the calculation of resistances and supports for reference.

     Low3214.1 High 3238

    Angle Degree Degree-Factor Resistance Angle Degree Degree-Factor support

    16X1 86.25 0.479166667 3268.6604 1X16 86.25 0.479166667 3184.0442

    8X1 82.5 0.458333333 3266.2787 1X8 82.5 0.458333333 3186.3958

    4X1 75 0.416666667 3261.5178 1X4 75 0.416666667 3191.1015

    3X1 71.25 0.395833333 3259.1387 1X3 71.25 0.395833333 3193.4557

    2X1 63.75 0.354166667 3254.383 1X2 63.75 0.354166667 3198.1667

    1X1 45 0.25 3242.509 1X1 45 0.25 3209.9592

    1X2 26.25 0.145833333 3230.6567 2X1 26.25 0.145833333 3221.7735

    1X3 18.75 0.104166667 3225.9219 3X1 18.75 0.104166667 3226.5053

    1X4 15 0.083333333 3223.5558 4X1 15 0.083333333 3228.8725

    1X8 7.5 0.041666667 3218.8262 8X1 7.5 0.041666667 3233.6095

    1X16 3.75 0.020833333 3216.4626 16X1 3.75 0.020833333 3235.9793

    (You can download a ready made free to use gann angle calculator from our web site from the following link http://www.smartfinancein.com/free-software.php . The paid calculator which is given along with the master course validates more number of logical conditions and infuses more number of gann principles in the decision making so as to give you greater success in intraday trade.)

    As per the above discussion and calculation procedure we have made the calculation of resistances and supports. As per the current volatility condition we are being advised to buy the stock at 3223.5558 or sell at 3228.8725. This is violating the point D trade principle and considered as an entry error henceforth we will change the high and low to its mid point and do the calculation from the mid point the mid point of 3238.35 and 3214.10 is 3226.225 . The modified calculation table is as follows.

    As per the modified calculation we are advised to buy at 3235.6986 for final target 3280.8878 and sell at 3216.7653 for final target of 3172.0214

    Low 3226.225 High 3226.225

    Angle Degree Degree-Factor Resistance Angle Degree Degree-Factor support

    16X1 86.25 0.479166667 3280.8878 1X16 86.25 0.479166667 3172.0214

    8X1 82.5 0.458333333 3278.5016 1X8 82.5 0.458333333 3174.3685

    4X1 75 0.416666667 3273.7318 1X4 75 0.416666667 3179.0654

    3X1 71.25 0.395833333 3271.3482 1X3 71.25 0.395833333 3181.4151

    2X1 63.75 0.354166667 3266.5837 1X2 63.75 0.354166667 3186.1172

    1X1 45 0.25 3254.6874 1X1 45 0.25 3197.8876

    1X2 26.25 0.145833333 3242.8129 2X1 26.25 0.145833333 3209.6796

    1X3 18.75 0.104166667 3238.0692 3X1 18.75 0.104166667 3214.4025

    1X4 15 0.083333333 3235.6986 4X1 15 0.083333333 3216.7653

    1X8 7.5 0.041666667 3230.9601 8X1 7.5 0.041666667 3221.4934

    1X16 3.75 0.020833333 3228.5921 16X1 3.75 0.020833333 3223.8588

     Trade outcome:

    1. At 9:34 a.m. We got a chance to sell at 3217 and kept out stop loss at 3235.70 this as per our calculation. Upon achieving the 1st target 3214.4we trail to stop loss to 3216.80, then upon crossing the 2nd target we trail the stop loss to 3214.40. Unfortunately after touching the low 3211 at 9:39 a.m. the trailing stop loss triggered at 3214.40 and we just bagged less then +3 points.
    2.  Considering our short trade adventure is wrong and as per the last protocol set in the trade rule we waited for the 3235.70 to come which we have got a chance at 10:07 a.m. and achieved till 3254 till 11:27 a.m. which is close near to our 45 degree target point.

    In this case if my shell stop loss triggered at 3235.7 I will accept close near to 18.9 point loss and be a buyer at this point keeping the stop at 3235.7 and aim for the last target  3281 with some logical trailing stop loss.

     This concept works in commodity, currency as well as in stocks.

     However the limitation of this article is that it does not discuss all the trading rules and conditions which are being researched by me. In the gann master course the supplied software uses all the extended set of logics.

    
    

My Intra Day Copper Trading Technique

Hi,

First of all let me tell you I am not an expert in technical analysis. I am still learning from many gurus here. I am going to explain here an intra day system to trade with copper. So far it is giving me very good results. Thats why i thought to post the system here, so that small traders can try this their own.

The system is very simple. Indicators used here are simply PSAR and Stochastic. And if you know camarilla Pivot points that will give you extra confidence.

Input values for PSAR are step - 0.02 and Maximum 0.2
Stochastic - 
%K - 5
Slow 3
%D 3

Levels 20-70

This image has been resized. Click this bar to view the full image. The original image is sized 1200x714.

Trade In 15 Min Charts . Whenever A New Psar Signal Comes Have A Look At The Current Trend With Stochastic. Suppose If We Gets A Buy Stop In Psar Check Whether Stoc. Is Over Sold Or Gaining Up From Down. If So Go Long In Mcx. Other Wise Leave The Trade. Similarly If A Sell Stop Comes And If The Stock Is Over Bought Or Tending To Go Down Go Short. 

Now the safety part. STOP LOSS. Once Enters Into A Trade I Used To Put 3 Point Sl Always. But Suppose Market Goes In Opposite Direction To That Of Our Trade, I Used To Modify Stop Loss So That It Can Match With $ Sl. Dont Let Inr Variation Eat Your Sl. 

Work With 15 Min Chart And Always Book Profit 0.80- 1 Rs In Mcx. Will Get 3-4 Trades A Day. 

Enter only after closing of first candle.

If you really want to try this, do paper trade first. Then only trade with real cash.

THANK YOU .....JASSUJITH

1 lakh to 652 lakhs in 497 trading days - Winning 20% of Trade in NIFTY Futures

The Strategy.

It is not a Real positional method because I don't want to take the positions to the next day. It is also not Intraday because I am not going to sit the whole day for Trading. The above statement with the assumption that the backtested results of last two years data will work for future also

So coming to steps.
1. End of day, Take the OHLC (Open, High, Low, Close)
2. Calculate the 25 DAY EMA on the HIGH - We will Go LONG only above this Price
3. Calculate the 25 DAY EMA on the LOW - We will Go SHORT only below this Price
4. Calculate the 15 DAY EMA on the OHLC - We will use this to calculate the BUY/SELL signal
5. Calculate the 25 DAY EMA on the OHLC - We will use this to calculate the BUY/SELL signal
6. To Confirm the UP trend, there should be HIGHER HIGHs and HIGHER LOWs. For DOWNTREND it should be LOWER HIGHs and LOWER LOWs.
7. Using the above rule, we will get a BUY or SELL signal for 15DAY EMA and 25 DAY EMA. If we can use TOD for TODAY and PRE for PREVIOUS Day. Then we will get a BUY Signal if TOD_HIGH >= PRE_HIGH and TOD_OPEN >= PRE_OPEN and TOD_LOW >= PRE_LOW and TOD_CLOSE >= PRE_CLOSE
8. For a SELL Signal we have to check the LOWER LOWs and LOWER HIGHs.
9. We will get one signal for 15DAY EMA and another for 25DAY EMA.
10. If both are BUY then for tomorrow we will go LONG or if both are SELL then for tomorrow we will go LONG.
11. If both of them do not give any BUY/SELL signal then no trade for tomorrow.
12. If the signals are different then we will go with the 25DAY EMA Signal because we want to go with the Trend (so we use higher EMA value)
13. IF it is a LONG, then we will go LONG above the Price (Calculated in Step 2)
14. IF it is a SHORT, then we will SHORT below the Price (Calculated in Step 3.)
15. We will have to calculate the Stoploss Price so that the Win Ratio confirms with the Trend. For Example if NIFTY is trending only 25% of the time and 75% of the time it is Rangebound, then we will have to find a stoploss so that we will win the Trades only 25% of time. The value from my tool comes to around 7-10.
16. Once you open the trade around 9:15 AM to 9:30 AM after checking the opening price, then put a Stoploss trade and close the Trading Terminal.
17. At around 3:15 PM to 3:25 pm, you need to close the trade if Stoploss was not hit.
18. After market hours download the OHLC for today and continue the steps for tomorrow.

All the above steps and calculation have been done in the Excel tool. The only thing which needs to be done is daily add a row and update the OHLC manually and check the column W for LONG Signals and column AB for SHORT signals in the tool.

I have not actually used this system. So please use it if you feel confident and that you are convinced. I am planning to paper trade for some time before actually using it. Please share the tool and please don't sell this tool for money... It is supposed to distributed freely...

__________________
Best Regards,
                                         THANKS TO RAJ

Extract from Zatrino ( 6 Common Mistakes of Trading Novice) THANK YOU Arvindh

1)Position Size
One of the most common mistakes made by new traders is the lack of any discipline when it comes to position size. This mistake is especially prevalent in leveraged markets such as forex and futures. The ability to control a large amount of currency or commodities with a small amount of money is quite enticing as it allows the trader to make large profits off of relatively small movements. Quite often, the trader will come into the market with unrealistic expectations of profits that are available. Most of the time, this comes down to something they have heard during a presentation or sales pitch about the markets. Quite often, the person selling the system or education that they are using makes claims of outlandish gains in a relatively short amount of time.
Unfortunately, the average person completely ignores the warnings that most regulatory bodies insist on these people posting. If you ever look at the “fine print”, you will see mention of the fact that leverage, and for that matter markets in general, can work both ways and you can possibly lose the entire principal you trade with or even more money. This is a fact that most people seem to be willing to ignore, but only seem to focus on the claim that the system or trader using the education made hundreds of percent in gains over the year for example.

The biggest mistake that most of these new traders make is to trade large positions sizes as a result of these extreme claims. The average trader has no idea when they start out what a difference risking 1% of your account per trade makes as compared to 10%. The simple fact is that you can indeed make more money if you risk more, but the reality of trading is that there are always going to be losses. The simple mathematics of the trade is that a loss of 10% is a much more significant loss than 1%. Most traders don’t take into account that a 10% loss takes a gain of 11.1% just to get back the money you lost on that trade. When you have a string of losses, the compounding difficulty can make for an almost impossible task. The idea that you will have losses leads to the next common mistake…

This one can cause a lot of problems for the trader. The tricky part about this is the fact that you get into trading in order to make a profit, so it makes sense that it is the part you would be most interested in. However, trading is about making money overall and not necessarily in a few short minutes. The main reason of course is the sheer randomness of events and fluctuations in the markets.

2)Focusing only on potential gains
The truth is that you will have losses; there is nothing that can prevent this. The market will make sudden moves based upon headline events as an example. No matter how much you plan your trades out, there is absolutely no way you can predict that some political scandal involving the European Central Bank or other such unforeseen event will come and suddenly move the market against you. Because of such problems with the human nature of the trading crowds, you simply must have an idea when the trade is no longer working in your favor. There is always going to be a point in which you know the trade was wrong, and if you are not looking at the possible losses as well as the gains in any trade before putting it on, it is very likely you will find out the trade is wrong when you have taken far too large of a loss to recover.

3)System Hopping
Another big problem that new traders will create for themselves is the mistake of system hopping. The average new trader is introduced by some kind of sales pitch, and then will often hear of legendary bank traders and other such urban legends in the trading world. Unfortunately, this leads to more of the unrealistic ideas mentioned earlier. The truth is you can make quite a bit of money trading the markets, but the business of trading is like any other business, returns are relative. In other words, a 5% return is a solid return at any account level. However, if it is a 5% return on a $1,000 investment, it is only $50. With a larger account, the return is much larger. This can often lead to switching trading systems frequently because the trader doesn’t feel that they are making enough money, and certainly not fast enough!

Generally, they will have a loss or two, and feel that perhaps the system is junk. Maybe it isn’t working in the current environment, or perhaps the person that sold the system to them was offering junk. None the less, the system has produced a few losses, and all of the sudden the trader goes onto the new big thing. The constant hunt for the “Holy Grail” trading system that will produce almost no losses and almost all winners is a fruitless pursuit that far too many traders get themselves stuck in. The truth is that a system that is proven over time is just that, proven over time. This doesn’t mean that there are no losses, just that on the whole, the system makes money. However, far too few traders are willing to give it long enough to prove itself. If you are constantly new to whatever system you are using, you never learn to trust it. Not trusting the system is a part of the next major issue.

These are some of the points you missed above. Could be useful

Trading System – Common Mistakes & Belief.....THANK YOU RAJENTHIRAN JI

Iam just listing down some of the common mistakes done by traders and their belief when they jump into the concept of Trading system. These are some of my observance from the people those who jump newly into the trading system world. If you observed a lot please list ii here.

1) Iam Blindly Trading based on the Buy & Sell Signals without analyzing the risk involved in the trading system.

Anyone those who are very new to the trading system concepts got attracted towards it. These Buy and Sell arrows on the chart give them psychological confidence on the trading system to trust those signals to trade.

These Buy and Sell logic built using programming languages are just mathematical models and doesnt do any sort of prediction works. So its better to understand the nature of the trading system and the risk involved in it.

2) I follow the trading system if someone/my friends/relatives provoke me that the trading system is good because it had made them considerable amount of profits using that trading system after few trades and they advertise me that it is a very accurate trading system as they had observed few trades and followed some of the buy and sell signals from the trading system.

Most of the common people are getting attracted towards this sort of trading system. Visual testing alone is not enough as the observation of the sample size is very low and it is very tough to evaluate a trading system behavior based on visual observation alone.

3) Iam looking for a good intraday trading system which gives 75-85% accuracy. Iam even ready to pay for that. Let me know if you have.

Many website in india very recently opened shops to trap these kinds of traders as these traders are very new to trading system and they do have a lot of inner spirit to earn more or probably they would have lost more. Such traders are getting trapped because of the cacthy Charting Images/Snapshots on their websites/facebook showing Distance Buy and Sell Signal with unbelievable profits. But once you started trading based the trading system in realtime scenario you could observe that something wrong with the trading system

4) I want to make 30,000 every month. Please provide me a trading system for that?

This is a wrong practice. If you are having such a attitude you could probably lost now or might be lossing very slowly. Remember Losses are part of the trading system. View Trading system as a mathematical tool to reduce the risk and trade in a business perspective and never view trading system as a gambling factor.

5) I loose my patience & Hope whenever i see 4-5 or even more consecutive losses

4-5 consecutive losses are very common in any kind of trading system and in the worst case 10 or even more losses are common. A trading system is considered as a good trading system if it withstand the worst case scenario and making consistent returns. No Necessarily such a trading system should have a winning ratio of more than 50%.

6) I want to trade higher timeframes as it involves less noise and i dont want to trade lower timeframes as it involves lot of whipsaws.

There are certain strategies where trading in higher timeframes involves lots of risk. Assume thatSupertrend accuracy is 42% in 5min charts and you might thought that 15min charts and hourly charts would have lesser noise and higher winning rate. The answer is “yes” it invovles lesser noise when compares to 5min charts but the risk factor is very higher in higher timeframes . 3-4 consecutive losses are possible in higher timeframes in such cases huge damage will be done if you are trading such a trading system in higher timeframe.So better analyze the worst case scenario of trading in such a timeframes and make sure you have the potential to withstand those losses.

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