System Development

and
Multiple Time Frame (MTF)
Mayur Shah
www.shahmayur.com
Email: mayur_mshah@yahoo.com
 System Development
1. Market Selection
2. System Selection
3. Entry Selection
a. Direction Identifiers
b. Setups – Alerts
c. Triggers
4. Exit
a. Risk Control
b. Trailing Exits
c. Trend Reversal Exits
d. Profit Taking Exits
 Market Selection

1. Best Market
2. High Liquidity
3. Clear Direction & Good Volatility
Basic Bar Chart
Basic Candlestick Chart
Added “Paint Bars” and 2 Moving Averages to identify Intermediate Trend
Added “ShowMe” Indicator to Pin-Point Swings within Intermediate trend
Donchian 20-Bar Channel added
3/10 Oscillator (momentum indicator) added
 System Selection
1. Mechanical Systems

2. Discrete Systems
a. Trend Following System
b. Counter Trend System
 Entry Selection
Entry Process has 3 Logical Function

1. Direction Identifiers
2. Setup – Alerts
3. Triggers
Daily Chart – Bank Nifty, Weak Relative Strength (No Green Bars from Mid June)
Trigger Chart – Bank Nifty An A-B-C correction on Intra day chart is a Flag on Daily chart
Bank Nifty with Keltner Channels and the 3/10 Oscillator
ACC- No Strong trend on either side since 6-mths. Red-Green-Red bars
ACC – 60 mins. Chart. Only One swing was profitable as no strong trend on Daily chart
Breakdown / Breakout from sideways trend is very strong
Trigger Chart…..Allahabad Bank – 60 mins……..Consolidations witnessed with low ADX
Arvind Mills – A fresh breakdown from the sideways mode, A First pull back will be good opportunity to Short
Arvind Mills – Trigger Chart New Lows in Momentum followed by a New Low in price
Recognize the power of a move out of a sideways line.
Trigger Chart – Ashok Leyland…Breakdown on 60 mins. Charts from a sideways line.
Recently Biocon Broke out of a Big Sideways mode. Check the Strong Volume after breakout.
Trigger Chart – New Momentum high + New High in Price.
Another stock in a Sideways mode. See the alternating Red – Green – Red Bars.
No strong swings on Lower Time Frame. Hence always check higher time frame before taking swings on Intra day charts
Canara Bank – “Text Book” breakdown from sideways line occur a small percentage of the time
Trigger Chart – A breakdown from sideways mode on higher time frame is usually strong with good swing trades
Again Breakdown from Sideways mode. Setup chart. First Pull back is the best opportunity to short.
Trigger Chart – MMA help follow the trend on lower time frame. Angle Oscillator confirms downtrend
Setup Chart. Breakdown from sideways mode. Bars remain Red throughout the downtrend.
Trigger Chart – After the breakdown, all pull backs were opportunities to add to short.
The same DLF chart was in a strong uptrend since Dec 2012. Look at the Setup Signals on pullbacks
Setup Chart – Donchian Channel signalled a sell & the first pull back was an excellent position trade.
Trigger Chart – After the breakdown, all pull backs were excellent sell opportunities confirmed by CCI indicator
Trigger Chart confirmed an end of the downtrend.
Persistent Uptrend in Hexaware suggest institutional buying.
Trigger Chart – Only way to get in a Persistent trend is to look for swings on Intra day charts
Setup Chart – Strong Downtrend favored by Banking sectors weakness.
Trigger Chart – After the breakdown on 15 mins. Chart, use all pull backs to add to shorts.
Move out of the Donchian Channel, & the first pull back gave excellent buy in May & excellent sell in June.
Trigger chart – 15 mins. Shows breakdown and a number of opportunities on the short side.
Setup Chart – Follow the colors of the bars and use swing setups to look for trades on the lower time frame.
Trigger chart. The Angle Oscillator shows trending (Green and Red color) and non-trending (blue color) phases.
Setup Chart – Breakdown from a sideways line. A sea of RED.
Trigger Chart – Scores of Swing Trading opportunities.
Persistent Uptrend – Only way to trade such a stock is to go to lower time frame for swing trades
Trigger Chart – All GREEN – Scores of swing trading opportunities.
Stay away from sideways stocks till we see a breakout or a breakdown
No Strong Swings in a sideways stocks. Probability of the failure of swings in Intra day charts are very high.
 Profit Taking Exits
In an Uptrend as shown in the chart, the targets for the Swing Trades
are as follows:
BC1 = 1.272 * AB
BC2 = 1.618 * AB
BC3 = 2.618 * AB
In a Downtrend as shown in the chart, the targets for Swing Trades
are as follows:
BC1 = 1.272 * AB
BC2 = 1.618 * AB
BC3 = 2.618 * AB
Fibonacci Extensions – Swing Trading Targets in an Uptrend

BC1 = 1.272 * AB
BC2 = 1.618 * AB
BC3 = 2.618 * AB
Fibonacci Extensions – Swing Trading Targets in a Downtrend

BC1 = 1.272 * AB
BC2 = 1.618 * AB
BC3 = 2.618 * AB
 THANK YOU!

Mayur Shah
www.shahmayur.com
Email: mayur_mshah@yahoo.com