1. Daily Bar System. System analyzes a Daily chart of NIFTY to give signals with average holding period of 5 days.
2. Automatic Long and Short signal generation. No need to draw waves / lines and other fancy stuff on your charts to analyze NIFTY any more.
3. Backtester Results Available - Thanks to TradingView, backtest results for previous years (from 1990) are available right in the charting platform for NIFTY.
Having a good trading system is one thing and trading it to make money is a whole different ball game. One thing you must always do if you want to mimic the backtest results in live trading is to follow the rules mentioned below as if your life depends on it.
1. Each day the system gives you a Long and Short trading level. You go Long on NIFTY when the Daily Long level is breached and you go Short on NIFTY when the Daily Short Level is breached.
2. Trade using Nifty Options, In the Money calls, one strike below the nearest strike price for going Long using Call Option or one strike above the nearest strike price for going Short using Put Option.
3. Preset exit and entry orders of appropriate option contracts every day at market open. To set the levels see the difference in Nifty spot price and the trading levels given by system and then multiply it with 0.8 to give an approximate order trigger price in both directions for the corresponding option contracts.
4. Book profit when Nifty moves significantly along signal direction. Every time NIFTY moves 100 points in your direction you exit the current option contract and enter a trade in the next strike price in the same direction.
5. Rollover before expiry. Its important that you rollover (ideally one day before the expiry day) your Option contact positions by exiting the current month contract and take a new position in the next month contract of the same type and strike price of the current month contract.
6. Trade only Nifty using this system. Also Daily chart has to be used for trading. System parameters have been tested and optimized for Nifty Index Daily patterns only and hence is likely to give stated results with Nifty Daily chart only.
7. Trade all signals. Don't pick and choose or add your own or someone else's analysis to filter the signals. Take confidence from the objective backtest results and not any subjective interpretations.
8. Trade with only that amount of money you can afford to loose. Initial capital that you need to have to trade one lot of NIFTY Option using this system should be at least INR 150000. You need only INR 7500 - 15000 to open a position and the rest is the margin of safety you need to have in your trading account to account for drawdowns in trading. You can add the capital in a staggered need to basis to your trading account. But make sure you have the initial capital mentioned above at your disposal, if need be.
As always your thoughts and inputs are welcome. Happy Trading !!!
Excited to update the existing script with more features. Here is a list of changes
- Updated to Pine Version 4
Improved algorithm for even better performance
Better graphics using latest Pine features]
1. Minor fixes in the graphics display. There are some rare days when the daily real-time candle hits both green and red lines. Only one signal was being displayed on such days and the other signal was being filtered out in code. However, now the user has the option to enable/disable the display of the last dual signal day. By default, this display is turned ON. Note that the strategy backtester may place only one order per day even on dual signal days. This is because backester uses a broker emulator as published here. The base method to analyze the system is this - when the real-time bar hits the green line Nifty is likely to trend up and if it hits the red line it's likely to trend down, even if this happens intraday.
2. User control for displaying ITM option prices close to daily long and short levels have been added. By default, the ITM option prices won't be displayed. It is important to understand that this is a Nifty Index analysis tool only. The instrument you want to trade based on the tool analysis is up to you. Me or my company don't recommend to buy or sell any financial instrument. However, the basic set of rules I use to trade using the tool and the logic I use to select the instrument I trade is published on the company website. It is for your reference only and is by no means a recommendation to buy or sell.
1. Fixed a bug with dual signal days display
2. Now the current day signal lines and labels will display only during live market session. After market close and when tradingview marks EOD around 7.30 - 8 PM the next day signals will only display which will come from the strategy file. This is to avoid display clutter when both current and next day labels are shown together after market close. After market close and till tradingview marks EOD no labels shall be displayed.
2. Tooltip info added for labels to aid user comprehension of the tool labels.
3. Settings window organized better with tooltip info fields for each option to aid user comprehension of individual fields.
No algo changes have been made as this is a 30 year backtested algorithm powering the system. All changes are basically on the visual graphics side for better user experience. Please use the strategy file for backtesting at your end.
1. Added expiry day alert. Displays an alert label every Thursday when the market is live. Note that the expiry day alert wouldn't be displayed if Thursday is a market holiday and the expiry day was moved to the last market day prior to a Thursday. Also, the alert will be active during the live market session only and will disappear at the session close.
2. Daily signal price levels are now rounded to the nearest integer.
3. Code cleanup for slightly faster load time.
1. Option price correction factor (OPC) added. OPC is a simple and crude experimental factor to estimate the call option price when spot price hits the daily long level. The factor is calculated as 0.9 x absolute value of difference between daily long level and close price. The OPC can be adjusted against LTP of the call option to place pre set orders in trading platform. Use it at your own risk and along with tradingview alerts near signal levels to readjust the pre set orders using OPC for better accuracy.
2. Bug fix - the label display turned off between pre market close and market open. This is now fixed.
1. OPC correction factor adjusted to 0.92 to fix rare order miss triggering.
2. Alert option added to fire an alert a configurable preset value away from the red or green line at which alert needs to be generated. You may adjust the SLM option orders at the alert as per the displayed OPC to give more accurate entry / exit prices. Use the “Create Alert” dialog box to create an alert based on this level.
3. Label info text modifications for ease of readability.
4. Label moved slightly to the left for easy visibility on mobile layout.
5. Minor code cleanup.
1. Upgraded codebase from PINE V4 to V5. Better performance due to more efficient code made possible by PINE V5.
2. Next day levels used to come from strategy file earlier. These levels will now come from the Study file. This means less clutter on chart with one less file to load while trading with TrendShikari NTS. Only study file is needed most of the time. Use the strategy file only when you want to backtest on Nifty with TrendShikari NTS.
3. All plots now replaced with labels to reduce the clutter against the indicator name.
4. Under Display settings an option to turn off the daily price lines and labels were added.
5. Dual signal day candles will now be displayed with yellow body. The signal shown against such candle will depend on the override setting as described next.
6. Under the newly added Algo settings, an override feature has been provided. Override the current signal generated by code if it is not valid. This may be needed only during a dual signal day. Overriding will change all dual signal days on chart as per the signal type option selected which may seem invalid except for the latest signal. Only the latest signal is important when using the override mode and helps to generate correct alerts as per the latest valid signal. All dual signal days may not generate invalid signals. Therefore review manually and then enable override option only when needed. Keep it disabled otherwise. On historical price candles, the code has access to OHLC values of price candle only. It has no way to know how the price moved between market open and close looking back into history. Therefore user is required to intervene manually using the override option once in a while.
7. Market open alert added to alert you when market is open for trading every week day.
8. Expiry day alert will now come even if the weekly expiry day doesn't fall on a thursday. A label is displayed as usual on chart along with extra tradingview style alerts.
9. Muhurat session alert added to alert you when the annual Muhurat trading begins on Diwali day every year.
10. Trend reversal alert adds a price line corresponding to the set alert level. It generates an alert when closing price crosses the alert line in the desired direction. It also generates an alert when the trend reverses and a new signal is generated.
11. Using the study file on any other instrument other than Nifty now causes a run time exception. A warning message will be shown to you if you click on the red exclamation mark shown against the study file on chart.
1. A long and short line is displayed on chart by default. However now it is possible to switch off the current trend line and display only the reversal price line and label. This is a positional trading system and hence the trend line corresponding to current direction is redundant and you can hide it, if you want to.
2. Better help info added for Market Session alert.
3. Pre trend alert setpoint was earlier pre set number of points away from the trend lines. Now its modified and it is % of difference between red and green line. This allows for better alert level setting with changing volatility of Nifty.
4. OPC value shown was earlier had a fixed weight value of 0.92 throughout the week. Now the weight changes dynamically depending on day to better accommodate the time value degradation effect. Remember this is an experimental feature and use with due diligence at your end.
5. Updated Muhurat trading day info to reflect 2022 date
6. Updated expiry day info to reflect 2022 dates
7. False pre-trend reversal alert bug fixed. Pre-trend alert will now fire every one minute once condition is met. To mute this alert you will have to disable the alert in settings and then delete and add the alert once more in Tradingview. You can simply ignore the redundant alerts if you don't want to go through this process. Keeping the alerts active does have the benefit of giving you alerts if there are repeated price crossover or cross under events relative to the pre-trend reversal alert line.
8. False trend reversal / missing trend reversal alert fixed.
Your thoughts and comments are welcome as always !!!
1. New minimised mobile portrait view added for ease of use on a mobile phone.
2. Added market closing alert that will fire around 3.29 PM before market close. More help info added for Market Session alert.
3. Configurable alert interval from 1 to 5 min added for Pre trend reversal alert. The maximum delay for alert to fire the first time and then the delay between successive alerts is equal to the set alert interval. This will allow better control on the firing of alerts.
4. Trend Reversal alert early firing was noted in V2.8. A fix has been implemented. But this is in beta mode. Please let me know if you see issues.
Your thoughts and comments are welcome as always !!!
2. OPC weights adjusted slightly for better price estimation.
3. Trend reversal alert now calls out the reversal value of Nifty spot
4. Minor code mods to pre trend and reversal alerts have been added as possible fixes to false triggering. Note this feature is still in Beta. Any issues please let us know.
1. The trend lines shall now extend towards the right only. These lines only correspond to bullish and bearish levels for current day if market is live and next day if market is not live. But new users often get confused when they see historical long or short signals at candles even though the candle didn't cross the current trend lines. Hence the change.
2. Now label text can be moved to the left and right as per user preference. Also font sizes of labels can be adjusted as per user preference.
3. Profit booking lines can be now displayed along the direction of the signal.
4. Override signal option has been removed from indicator. Only the dual signal candles will be shown in yellow hence forth. On backtesting it is revealed that we don't need to change the direction more than once per day. The trend on such days shall remain on the side of the first signal of the day. If a long signal was received first the trend for whole day shall be long and if a short signal was received first the trend for whole day shall be short.
5. For pre tend reversal alert the alert interval can be now modified from 1 min to 30 min. Also a new "D" option has been added to limit the number of alerts to once per day. Note however that the pre trend reversal and trend reversal alert are still in Beta phase. Erroneous firing may happen still. Use with caution at your end.
1. Default TP interval set to 140.
2. Added user configurable option strike display against each TP line for ease of use.
3. Added display of TP lines on signal direction opposite to the active signal direction.
Pre trend reversal alerts and trend reversal alerts are still in beta mode. May not work properly. If we delete and add the TrendShikari NTS alert everyday it seems to work fine. If not it tends to misfire.
Enabled FinNifty spot and BankNifty Spot charts for experimental testing. Both these indices are heavy with couple of banking stocks and hence can be more volatile. Typically this means more capital requirement relative to Nifty index for similar drawdown %.
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TrendShikari NTS is a Nifty Index, Swing Type, analysis tool which can be used to build a Mechanical Trading System for Nifty. The study file generates daily levels & alerts for live trading. Visit www.t7wealth.com to request access to the study file.
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