Actionable intraday strategy

INTRADAY STRATEGY This strategy requires use of three technical indicators, they are: Stochastic RSI, MACD and EMA.

DESCRIPTION OF SETUP: Select all the three above stated technical indicators. Select EMA three times. For the first select time frame of 5 days, 8 days for the second and 13 days for the third one. Use standard setting for Stochastic RSI and MACD. Also select the heikin-ashi candles with time frame of 15 minutes.

PRINCIPLE OF STRATEGY: The setup works on the principle of demand and supply. The stock price fluctuates on the basis of this principle. Whenever the demand of a stock is more than its supply, then the price of stock goes up. Conversely, when

the supply is more than the demand, the price goes down. For tracing the demand we use Stochastic RSI. The next principle involved is the support and resistance of stock. A stock when near its support, is expected to move up. And when near its resistance, is expected to go down. For keeping an idea of this we will be using three EMAs.

STRATEGY: The strategy is devised using the above stated principles. First of all prepare your setup as directed.

SIGNAL TO BUY: STEP 1: Observe the EMA lines. If the 13 days line of EMA is at the bottom, 5 days at the top and 8 days in the middle. This implies the stock is trading above its support. And it is a buy signal.

STEP 2: Observe the Stochastic RSI. If the blue line is above the red line, then check for the value of blue line. If it is in the range of 50-70, then this is a buy signal.

STEP 3: Observe the MACD. If the blue line is above the red line, then this also is a buy signal.

If you get buy signals from all the three indicators, then go for the trade.

The exit point will be depending on the stochastic RSI. Once the blue line reaches 100, and after that starts declining. Then that should be taken as your exit point.

If the trend reverses in the middle without being completed, then quit the trade. But as you are using three technical indicators therefore the chances of trend getting reversed will be very less. But, be cautious.

SIGNAL TO SHORT SELL: STEP 1: Observe the EMA lines. If the 5 days line of EMA is at the bottom, 13 days at the top and 8 days in the middle. This implies the stock is trading below its resistance. And it is a sell signal.

STEP 2: Observe the Stochastic RSI. If the red line is above the blue line, then check for the value of red line. If it is in the range of 30-50, then this is a sell signal.

STEP 3: Observe the MACD. If the red line is above the blue line, then this also is a sell signal.

If you get sell signals from all the three indicators, then go for the trade.

The exit point will be depending on the stochastic RSI. Once the red line reaches 0, and after that starts moving up. Then that should be taken as your exit point.

If the trend reverses in the middle without being completed, then quit the trade. But as you are using three technical indicators therefore the chances of trend getting reversed will be very less. But, be cautious.

The accuracy of this setup is 79%. But, you will be benefitted from the strategy only if you trade after getting proper signals from all the three indicators.

This strategy has been back tested. And also it finds good number of trades in intraday. You can check out the setup snapshot inserted in the document, for better understanding.

If you have any doubt regarding the strategy, feel free to contact us.

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