I would like to share an Interesting trend trading strategy for Intraday traders conbining Inchimoku and Supertrend Indicator.
Here are the ground rules for trading this strategy: ( you can look at the attached chart to understand more)
Because this is a Intraday strategy I suggest 3 minutes. You will get many opportunities to play and exit.
To use this indicator Implement Ichimoku only cloud on Kite. not any other lines of Ichimoku. On a white backround chart you can make all other lines of Ichimoku to white.
Add Supertrend Indicator on the same. default settings (7,3) will do fine
Please note that Ichmoku cloud Indicates the trend Inclination of the market. Price above cloud is more oriented towards Bulls and Price below cloud is more oriented towards bears. price within clouds tend to more towards sideways movement.
You can only trade when the price is above cloud or below cloud. not when it is in the cloud.
When price is above cloud take only buy calls on Supertrend with with strict stoploss of supertrend line. Take sell calls using Supertrend when the price is below cloud ( again with strict stoploss). In kite you will get sell and buy indicators so it is easy for you to exit and enter.
Please note that like any strategy this also fails often but you can make money consistently if you are disciplined about stoploss.
@ONLYINTRADAY…When price is above cloud or below cloud usually it is trending…Prices close to the cloud and inside cloud tend to move sideways…So my recommendation is to check usually hourly chart to ensure there is a trend and then come back to the intraday chart and trade…Ideally we would like to avoid sideways as whipsaws will make it to difficult to trade…
@SureshG sir i want to know the parameters for ichimoku cloud, shall i keep it as a default or i need to modify? Also i m using sharekhan so supertrend is not available on their interface, i use it on investing.com i use parameters as 10, 1.5 do i need to change those too?
@Nikhil_Deshmukh …Yes, Keep Ichimoku settings as default and as I have mentioned settings for supertrend is (7,3) but you can use (5,2) as well for Intraday trades…as you go higher frame reduce the second parameter i,e for weekly charts and daily charts, you can look at (5,1) too…Hope this helps… if you don’t have supertrend in Sharekhan, try using ATR bands or lines…they work in similar manner and you can use the same settings as supertrend on ATR bands too!
Sir, as you mentioned in ground rules this is a intraday strategy so chart discussed here is Bank Nifty Futures chart or Nifty Bank Chart. If it is a Nifty bank chart then how to use this strategy with Bank Nifty futures. Kindly clear this confusion
I do not know if I know the right term but I will explain my doubt. If success rate is 55% then we will not get any profit at all assuming that I will lose or gain equal amount. For example, if a buy signal is seen on the above basis for a stock ‘X’ priced at 1000, we need to get at least about 0.5 rupees to break even in zerodha. So if the target and stop loss are 2 rupees then there may be no profit at all or may be a small loss. Can you kindly let me know the expected profit and recommended stop loss for this. Also the three minute time frame is too short for instruments like bnf as the price movement of 10-15 points is too easy particularly when there is a trend. Please reply when you find some free time. Or are you automating the trades because you seem to be a professional trader.