3 day high,low,close strategy

3 day rule...

I like to introduced a new Strategy for trending market which i have learnt from niftydoctor blogspot.It produces excellent return in trending market but failure in range bound market.Given the risk reward ratio of 70:30.

I have setup 3 day high moving average,3 day close moving average,3 day low average
A close above 3 day high moving average is a buy signal with 50% stoploss at 3 day
close moving average and 50% stop loss at 3 day low moving average.Same as for short position also.

For past performance look at the chart below and how it has produced many signals.In general
we use three day close for any breakout confirmation same it is been used here.The same strategy is been used in niftydoctor.blogspot.Credit goes to him!

Watch the last 15 minute trade if there is possblity of closing below or above 3 day low MA OR
3 day high MA then initiate fresh long or short accordingly.

This strategy is best used for day chart, in hourly chart it gives whipsaws.

Below is the chart,using the 3 day strategy it has given excellent return in trending market

Below is the another chart which shows the failure to work in the range bound market.


Rules:

1)If prices closes above 3 day high MA go long .

2)Initiate stoploss at 3 day close MA(50%) and remaining 50% stoploss at 3 day low MA.

3)If prices closes below 3 day low MA go short.

4)Initiate stop loss at 3 day close MA(50%) and remaining 50% stoploss at 3 day high MA.

For experienced technical analyst,they can use it will MACD,STS,RSI(14) for excellent returns.

Happy trading!