J10 SAR METHOD

J10 SAR METHOD

(Courtesy :tradeinniftyonly.blogspot.com)

I have made some changes to the original J10 concept.If you r interested in original please visit "tradeinniftyonly.blogspot.com".

1.  SAR is a number based on market's strength and weakness as well as the balance of demand and supply. Whatever the number may be, a choppy market could whipsaw the number occasionally to shake off your confidence in them. However, staying with one method brings you consistent winnings.

LONG: WHEN PRICE MOVE ABOVE SAR

SHORT: WHEN PRICE MOVE BELOW SAR   

2. If after triggering a reversal trade @ 5850 and markets fall again, you do not change the trade on the same day as SAR is done only once a day but do so only the next day based on next day's SAR. (Risk averse could have a Stop loss in extreme choppiness but the essence of SAR is to keep the trade once triggered and manage it the next day only. If and when such extremes take place, I'll be around to alert you. This has not happened in the last 3 years).

3. Once a new trade is taken in a minimum 2 lots, you book on one lot with a profit of 50, 100+ points and keep the 2nd lot till a reverse trade is triggered based on each subsequent day's SAR. (Risk Management).

4. Once a new trade is taken in minimum 1 lot, when this trade gets into profit, then BUY second lot.(2 lots)  (Risk Management). Never buy 2lot at one point whenever SAR is hit.

5. After booking out on the 1st lot, if Nifty climbs back substantially and start to fall again, take a new trade again. For Eg: After triggering a sell @ 5483 on 25.08.10, Nifty fell to 5392 on 27.08.10 and the 1st lot was booked @ 5397 and on Monday, it rebounded to 5469 and started to fall breaking day's low @ 5441, another sell could have been taken and another profit booking would have been done. This step is optional and suited for the experienced.

6. You may use the filter of 0.2% to 0.3% on SAR for 2 days once SAR new trade is taken to give the new trade a fighting chance & survive. For eg: For the new long trade taken @ 5468 yesterday, the SAR of today @ 5457 may be altered to minus 0.3% to 5441.

7. Close your Position using 

     a. Trailing Stoploss       b. Divergence   c. Profit Booking