Swing Trading is a popular short term trading method which is less riskier as compared to Intraday trading. In swing trading, positions are held for an average of 2 to 6 days, but in some cases can be extended beyond that. Most of the strategies that we have discussed in this blog belong to this category. The one that I am going to talk about now is yet another swing trading strategy with exceptional profit potential. And the good part is, you need not to monitor the markets all the time following this strategy, you can just spend 30 minutes a day in front of your trading terminal and still make good profit. The average CAGR for last 8 years in Nifty is 132% which we would see further in backtest results . This strategy is also known as 3*5 MACO method, and was first developed by Mr.Viswanathan, and then modified by Mr. Shiva Galrani. We have further modified the strategy and added essential risk management rules. Also, we have replaced offline excel with google sheets to make this real-time.
Note: To best view this post and embedded Google sheets use Firefox browser.
Swing Trading Strategy Rules
|Indicators Used||EMA 3, EMA 5|
|Stop Loss||50 points for Intraday whipsaw. Configurable in the Google sheet|
|Targets||No fixed target. Governed by the signals|
|Position Size||100% of Equity|
|Initial Equity||100000. Configurable in the Google sheet.|
|Brokerage||Not considered for backtesting|
|Margin||Approx 10% , Margin per lot configurable in Google sheet|
Note: The live signals and backtest report in the below sections are fetched directly from Google sheet. So sometimes, they do not load properly in the first attempt. Please refresh the page to see the signals, and use Mozilla Firefox browser for best results.
Live Signals for NSE Nifty
This section auto updates everyday to provide reversal point and trade signal for the next day. Below signal is based on Nifty spot prices. Its always recommended to apply your strategy rule on spot price and trade corresponding futures based on it.
Check below couple of illustrations on how to use this swing trading strategy in live market. Each illustration starts with a screenshot of current day signal followed by various use-cases on possible trade scenario for the next day.
Illustration 1: Buy to Short
|Open Price is greater than 1015
|Open Price is less than 1015 (Gap down)||
Illustration 2: Short to Buy
|Open Price is less than 1035
|Open Price is greater than 1035 (Gap up)||
Please read the above illustration carefully to understand this swing trading strategy in-depth. The strategy may sound difficult at a single glance but once you get comfortable it is like a cakewalk. In the next sections, we would see the backtest results of this strategy on NSE Nifty. All the backtest results and charts gets auto updated everyday from the underlying google sheet.
Backtest Summary: NSE Nifty
Monthly and Yearly Profit/Loss Points
Trades from last 50 days
Access to Google Sheet
As mentioned earlier, this swing trading strategy is coded in a Google sheet which auto updates everyday. The prominent sections of this google sheet is already embedded in this post above, but there are lot more things to explore in the real sheet.
- Change symbol name. You can pick any symbol from any exchange in the world as long as it is supported by Google Finance.
- Change time period for backtesting. Default is 3000 Days.
- Change Initial capital, lot size, margin per lot.
- Change EMA parameters and intraday stoploss.
- Access to excel formulas used for coding the rules and backtesting.
- Flexibility to modify the current rules as per your needs.
- Add your own risk management rules.
The development of this tool is in final stages. We are trying hard to make sure it is error free and useful. Drop you email in the below form to get early-bird access to this google sheet.