Trade Script suggestion, backtested strategy

Hello Traders,

Can somebody please suggest a good trade setup which gave good result while back testing? I am finding difficult in getting a consistent result. If someone can help with a backtested strategy, it will help me to start over.


Did you analyse your losing trades?

What went wrong? Can you share that?

try a moving average crossover.

Thanks for your reply. While testing moving crosss overs, I notice that most of the time if I keep the exit criteria as SMA cross down, I end up loosing most of the gains. Because by the time the SMA/EMA cross down happens the price is already down. Can you suggest whats the best exit criteria, when the entry was made using SMA crossover in 15 or 30 mins chart ? Thanks in Advance

I am no trading expert to offer advice buddy, but one of my friends exits whenever there is a volume spike after his entry. He uses price action strategy though. Maybe you can backtest that, and secondly also try to exit with a smaller MA crossover than you used for entry; ie, bigger ma crossover for entry and smaller for exit. Also, there is a book called trading for a living, by dr. alexander elder. I started with the market reading this book and they have many classic strategies. It is a relatively old book with a new edition having been released in 2015 iirc. I would recommend that if you want to get started.
Also, trading takes a lot of hard-work and home-work. There is no simple or single strategy that will work consistently. :slight_smile:

Thank you friend, for responding. I completely agree with you that there is no single strategy to look out for consistency. Yet I am working to find a strategy which can atleast prompt you a possibility of a promising deal. Moving average crossover, which is actually price action strategy, is good. But the place where it fails badly is during a non trending phase (as per my experience). And also the choice of the time frame on which you lay down your moving average is critical. Hence, my understanding is if moving average is combined with a strategy which can filter out those non trending zones, with a good backtest result of chosen time frame, we should be better, if not best.

When I started trading, with Zero knowledge, I made a whopping gain of 65,000 in 1st month. Added another 50,000 in next month. And it took less than a week to loose all of them. At that time, like many, I too didnot have an idea that I am trading and not investing. Hence, I didnot know that shorting stocks can also lead to making money. I only knew that we buy stocks. I didnot know that we must not always buy.

As months passed by, I grew better. And now doing just about decent, not completely decent!!

I am not a complete novice in this arena, yet considering the vastness of this field, I would say I am newer than most. Experts, who are really experts, are unlikely to login to this space and reply the queries, although exceptions are always there. That’s completely understandable and that’s natural to a greater extent… What I also lack currently is an association of like minded fellows, who want to learn and grow in this amazing lucrative business, and eventually break all shackles and make this a source of earning, living and everything, happily and enthusiastically.

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I agree! Now that you mention it, even I remember I used to do better when I knew little than now when I know a lot more!
Also, like someone said I don’t remember who, they said, instead of finding signals, we need to eliminate signals which do not work. That is the best strategy.

I think we should continue our discussions further. If you’d like to connect on hangouts, my id is [email protected].

In first week of trading One day I made 80k. After that lost more than two lakhs, but couldn’t make such profit now,

The reason is Fear. Fear of losing makes life worse. With infinite possibilities on stock movement one strategy can’t work always.

Which time frame we trade, stop loss limit , entry and exit timing, all play well. Especially for intraday trades with leverage it is the fear that kills capital.

Increase the capital by ten times, losses will come down. You should keep at least 60% capital in reserve. Don’t use leverage trades. One Wong move with high leverage will result in entire profits to lose.

As many Times discussed here less capital is the major reason. I became profitable after increasing the capital. Increase of capital means we can set higher stop loss limit and give more time to the trade to turn profitable.

Positional trading is better than intraday. Buy on dips and sell on rallies.

Do not trade with stock which are highly news based like, IT, Pharma, commodities, trading with specific stocks easier than trading index.

Usually I don’t do naked shorts. My shorting trades are less than one percent of total trades. Futures also called leverages trades. So no leverage. It will only increase your fear by leverage Factor.

Pure technical trading not recommended. You need to add news and options data for support and resistance. Use of BO and CO will only bring losses for less capital. Home work before and after trading hours is mandatory.

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Excellent input Hari! :+1:

Thanks, however, I differ from some of the points mentioned by you.

  1. I have found and find it everyday that trading in index is much better than trading in stocks. Reasons are : A stock may open even 10% gap up or down the next day. Index rarely does. If Nifty goes 100 points against you, it will give a loss of max 7k, that too if you are just sitting and watching and doing nothing. In stocks, chances of loosing are more. You would ofcourse know.
  2. If one has a decent strategy, then trading in futures is way more profitable than in cash. But only when a fairly decent strategy is known. If an entry is right, just 1 point gain can give a profit of 3-5k per lot, which needs around 70-100k margin. However, the otherwise is also possible if the entry went wrong.
  3. Why not to consider shorting stocks?? 95% of the money I have made is by shorting. Thats also a trading skill. Can a stock continue going higher and higher for ever on a smaller time frame? Rarely it happens. Thats where resistance come in place.
  4. Increase in capital is a good point, I agree. But, if the entry and exit criteria is wrong, then it may be deadly, perhaps.
  5. I would rather prefer to start with 1lakh and grow it to 10 lakhs, than, starting with 10 lakhs.

Above were just my views :slight_smile:

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I agree with your views. Each person has different trading style. Otherwise there can’t be buyers and sellers. If a person is shorting he has one View and person buying it have completely opposite view.

Predicting the index movement and range is a bit difficult. Like you many trade in index that is why turnover in index future is high.

And regarding less capital, traders always look at whether it will hit stop loss or not and never look at other things. Futures is leveraged product and if you trade future with BO or CO then leverage goes more than 200 times. This will increase the fear more and we set tight stop loss so will end up more trades with losses. This will increase trading cost. To set higher stop loss limit than Beta Factor then you need more capital. With one lakh you can use only half of it as per money management rules.

If you use entire capital and got loss on one day, next day the amount of trading capital will come down and you need to set even more tight stop loss limit. As per experts view including Mr. Nithin, Mr. Karthik, Mr, Bharath less capital means more losing trades.

With less capital you will set small target and do more trades which will increase cost of trading. If you see last seven trading sessions in Nifty it is trading in a range. If first trade goes as loss then it will raise fear factor and leads to more mistakes.

Are you using beta Factor to set stop loss limit ?
Did you analyse if you had set little bit higher stop loss limit then it would have turned positive ?

In my view positional trading is more profitable than intraday. Here is the explanation.

Nifty at 8900. You are trading futures.

Intraday :

Zero profit loss trading cost is Rs. 147.

Assume you have 80% winning trades. Each trade you made 5 points profit or loss. You made ten trades.

Profitable trades 8 - profit = 1816. Loss = 1044.
Trading cost = 1470. Net profit = 772.

% of trading cost with profits made = 190%

Positional trading :

Assume 80 % success rate.
You bought and hold it for next day.

Assume you bought at 8900 and it ended at 8920.
Net Profit = 1352. Trading cost = 148.

% of trading cost with profits = 11%.

Intraday trading means you are making profits for Zerodha :smile:

Now Risk 1 Reward 2

Stop loss 5 points
Target. 10. Points

Success Rate 80%

Number of Trades 10.

Net profit = 3772.
Trading cost = 1480.

% of trading cost with profits = 39 %.

Still it is higher than positional trading. And with positional trading you have chance of capturing gap up.

Most of the time if it opens gap down it always comes up little bit at least. You can add more lots at gap down and reduce your losses. For this you need more capital.

Thanks Hari, for sharing your experiences and views. However, with all due respect, I disagree with many of them. And thats mainly because your trading style might be lot different than mine. Trading is mainly all about mindset. As you said rightly, that how can I short a stock when there is no buyer!! :slight_smile: On one side when a trader starres at his losses, the same time there is another trader who is cheering at his profits for the same deal taken.

As per me, having higher capital is ofcourse and undoubtedly a privilage. But not unless one has discipline and strategy in place. Averaging a loosing trade is never a good idea for a retail trader. Because a stock can go against you more than your imagination.

Big players and HNIs in market never book losses, rather they keep on averaging, because they have no capital constraint. And they all do so because they have all the insider news much before they are released to retailers. … and they are privileged with special data feed from NSE which lets them monitor all long and short position built in real time.


I am dead against deploying higher capital without a good strategy and also I am dead against averaging a loosing trade. Market is full of opportunities and every new day comes up with new opportunities . If someone has more capital he can choose to deploy them in new trades rather than averaging an already loosing trade.

In less than three months I have grown my capital of 80k into 3.8 lacs, which is close to 500%. I doubt if I could have done that if I had more capital, say 8 lacs. Because may be, then, my focus would have been more towards chasing profit than trading right levels!!! I am no expert. If I had been one, having more capital would make more sense :slight_smile: , as per my mindset and outlook towards this stock market and this business of trading as a whole.

:slight_smile: :slight_smile:

Cheers!! And good wishes!!

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Nice work dude! You are already doing well. What other strategies do you want? :grin:

Very good man. You are doing very well.

The sole purpose of initiating this thread was to indulge in a discussion on Algo trade strategy. Coding is not at all a big deal, the logic is all that plays the real game.

Manual trading is tiresome. Looking at at the candles getting formed, dancing to the tune, flickering to red and green and finally getting frozen to give birth to another candle, takes a toil. Additionally, there are SMAs and EMAs criss crossing each other…

Hahahaha :smile: :smile:

Anyways, if I come across anything useful, will share in this thread. Thanks!!

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I agree that manual trading is not the best. For the last couple of days, i’ve placed atleast 4 wrong order, ie, buy instead of short and vice versa (On an related note, I even made a small profit on one of the wrong trades!). This is in addition to the emotional turmoil that comes with trading! :slight_smile:
I guess since you have a system that seems to work for you, maybe you can use a Pi scanner to identify buy/sell criteria for you. It will not place orders for you but it will generate the signals.

If you are looking for a fully automated trading discussion, I have a friend who does it with Zerodha API. I can get you both connected. I am sure he will be happy to discuss. :slight_smile: