J10 SAR METHOD - NIFTY TRADING SYSTEM

J10 SAR METHOD

(Courtesy :perfectniftytrader.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 3 lots, you book on one lot with a profit of 50, 100+ points and keep the 3rd 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 two more lot.(2 lots more)  (Risk Management). Never buy 3lot 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

8.Money Management -

I am using Fixed Ratio Money Management. My daily goal is 5000 per contract and my weekly

goal is 10000. I choose a Delta of 100000, i.e. I can increase my position every 10 weeks

assuming that I achieve my goals every week.

9.Other Rules

a)I am not trading the day before a major holiday-Christmas 
b)I am not trading on a Rollover Day
c)Once I have achieved my daily goal, I will stop trading or place stop loss and leave.
d)I am not trading when I'm distracted or feel sick
e)I will not trade into a major report: I close my trade 5 min before the report is released
and consider entering a trade 5 min after the report
f)If i don't do my home work I will not trade next day.

10.
a)Always  use  stop loss
b)Maintain trading journal
c)Evaluate Risk Reward



11.Keep log of Bank Nifty ,VIX SAR => if SAR is hit in Nifty only,trade lightly .
Decrease your position size considerably


12. Stop loss: 
    Volatility for Nifty is studied,15% of Daily Range or 20 points appear good.


13.Side ways Markets=>Decrease your position size considerably .out of our 3 lots we keep only one lot for sideways markets and continue our view points with previous trend.
if our weekly goal is met ,I will prefer to close my position and look for next opportunity.


14.

-----------------------------------HAPPY TRADING -----------------------------------------------------




    










15. Read  your rules every day.