DYNAMIC - A SWING TRADING SYSTEM
Motivation
The momentum feature is well known and researched in the market. Momentum trades/signals often result in out sized positive returns when trades go well in their favor. At the same time, almost all momentum methods/signals suffer from frequent, small and multiple losses.
Dynamic indicator/system is a proprietary systematic method designed to capture momentum on Indian Indices of NIFTY and BANKNIFTY
It aims to identify bullish / bearish patterns in a systematic manner and uses volatility adjusted entry levels and trailing points. The method employs a proprietary method to filter out market noise from an underlying trend to ensure whipsaws arising from a trend-following method are removed.
The expected outcome of using this is to improve risk adjusted returns on Nifty and Bank Nifty.
Trade Usage
The indicator can be used either as a standalone indicator/method or can be used as an additional confirmation to user’s Long/Short method.
Time Frame
The edge plays out on all time frames. Most common being 30/60 Minutes for Swing Trading with holding periods of a few days to weeks and 5 Minutes for Swing Trading with holding periods of a few hours to a couple of days.
Trade Usage
The indicator can be used either as a standalone indicator/method or can be used as an additional confirmation to user’s Long/Short method.
Elements of the indicator
BUY/SELL markers - They depict the BUY/SELL at the open of that bar. The set up is ready at the bar prior.
Trail SL Marker - Current SL of the system. Often times the trade would exit or reverse if market conditions have changed, even before hitting SL.
A ready BUY set up is depicted by Green vertical bar. A ready SELL set up is depicted by Red vertical bar.
Example Chart:
Back Test Performance
The initial Backtest was conducted on TradingView PineScript and following are the results:
NIFTY
Time Period: Jan'14 - Nov'20
Chart Time Frame: 30 Minute Time Frame
Strategy gained 10811 points(vs Nifty points 6700) and a draw down of 1158 points (vs Nifty draw down of 4900 points)
BANKNIFTY
Time Period: Feb'2009 - Nov'2020
Chart Time Frame: 60 Minute Time Frame
Strategy gained 31529 points(vs Bank Nifty 25000 points) with a draw down of 4921 points (vs Bank Nifty 15,000)
GET TRADINGVIEW ACCESS
AUTO/ALGO-TRADING
DYNAMIC Signals on 5 Minute Time frame can now be automatically executed on your trading account. The strategy is Live on Tradetron, which is an algo trading marketplace. Below are strategy statistics for period of Jan-2020 to Jan 2021. LIVE performance from thereon can be viewed on Tradetron Strategy page. iIt has two versions:
-
Futures Version - Trades Long/Short on Nifty & BankNifty futures
-
Options Version - Trades Long Calls/Long Puts on Nifty & Banknifty Weekly Options
-
What is DYNAMICDYNAMIC is our proprietary trend-following system designed for Index and Crypto
-
I have obtained access, but can't view anything on charts. Help?"The following video should help you troubleshoot. Please ensure you are using Normal Candles and not Heiken Ashi or other such special candles.
-
How much money is needed to trade DYNAMIC?You can trade the system with 1 Lot of Nifty Futures and 1 Lot of Bank Nifty Futures. The margin requirement may vary by broker that you utilize.
-
How much return is expected from the system?Systematic or Algorithmic trading aims to generate returns that are above and beyond the simple underlying returns. Returns go hand in hand with the risk undertaken and capital deployed. Decibel Capital has provided an indicative backtest on the product page and that can be used as an assessment of risk:reward of the system.
-
How do I get access to the system/indicator?Currently, DYNAMIC is being offered through TradingView. You can click on the button "Request Access" on the page above and submit a request to get access.
-
Do I need a paid account with TradingView to access this system?No. As a user, you can avail benefits even with a free account of Tradingview. Go to www.tradingview.com to set up your free account.
-
Do I need other indicators to trade using DYNAMIC?DYNAMIC is a full fledged systematic system that aims to capture large trends. You can club it with more indicators to improve it's performance as per your comfort. DYNAMIC provides a starting point from which several other systems can be germinated.
-
How much does it cost to get access?For a limited time, the access to the system is being provided free of cost. Just sign up and let us know your TradingView User Name to get access.
-
When to Buy or Sell or Exit?The indicator comes with labels that will tell you when the system is entering a buy mode or a sell mode. For ease of visualization, an occurence of vertical "GREEN" line on the chart will indicate that the system has identified a "BULLISH" regime. If not already Long, you can initaite a position at next bar open. Similarly, a vertical "RED" line on the chart will indicate that the system has identified a "BEARISH" regime. If not already Short, you can initiate a position at next bar open.
-
Is this a SAR (Stop And Reverse) or Always In Trade system?NO. The trade strategically enters and exits trades. The easiest way is to look at the bottom of the chart that shows the current state. Green - Long Position in market Orange - Short Position in market Purple - FLAT or No position in market It may happen that at the time of an exit, next entry is also triggered. However, it is not always the case.