TDF Manual - Text format
Please read all sections of this manual to understand total trading system.
This manual explains entry , stoploss and exit rules for TDF software signals.
It is a complete guide for stocks, commodities and forex traders.
Do not trade without reading this manual.
Characteristics of all markets:
All markets whether equities,commodities or forex have only two types of movements.
1.Trending phase 2. Consolidation phase
Both are clearly shown in the following charts.
1.Trending phase :
You can see trending moves captured by our special signals in the following charts.:
As you can see in the above charts,there is an orderly movement in trending phase. So, it is easier to make money in trending phase. Our experience shows that it is very hard to make money in consolidations. There are lot of ways to trade consolidations but our research shows that if you can make 10 rupees from trending phase in one trade, it takes 3 trades to make same 10 rupees in consolidations. And the failure rate and stress involved in consolidation phase is high.
So, we wanted to design a trading system which filters market movements and shows the trending periods clearly.Historical studies have revealed that stocks spend 70% of the time in consolidation phase and 30% of the time in trending phase. So,you have to make money only in this 30% of the time.
We have tested almost all famous trading systems and found that all those systems are giving less than 60% accuracy because of several reasons.So, we have focused our research to design a trading system, which signals trending moves and filter consolidations. At the same time, our goal was to see that the trading system works on all instruments like stocks, commodities and forex for day trading and swing trading.
To achieve highest accuracy, conventional indicators like rsi,stochastics,macd etc are not useful as all these normal indicators have got some limitations.Because of this, we have developed TDF software with our proprietory indicators and expert advisors. We have created trading signals using our proprietory indicators and expert advisors with which you can trade all markets in all tiem frames. All our trading signals are 100% rule based. So, no emotions in trading which is the 1st step to success.
Not only indicators and expert advisors, with TDF Software is built with automatic scanning facility in multiple timeframes. So, you need not open any chart to know whether signals have formed or not. Just start scanners once in whichever time frames you want and scanner scans in background and shows you alerts whenever new signals are generated. In all other softwares in market, either scanning is not available or even if it is available, you have to run scanner manually every time . But in TDF software, just start scanner once in morning and forget about it. Scaners will scan in background till you close software and show you signals. You can run scanners in all time frames like 1 min,2min,5min,10min,15,min,30min,45min, 60min, 2hr,3hr ,daily ,weekly etc.
Please visit the following pages to know about all features.
Before understanding trading rules, it is better to understand our thought process while developing the trading signals.Below slides will give some idea about our thought process.
You can see all the above signals of TDF software in the following charts..
Important point : All signals are not valid signals. Valid and invalid signals are explained in subsequent chapters.
TDF software is programmed with almost 100 standard indicators like RSI,macx,regression etc and custom indicators like TDF oscaillator, TDF A,TDF B, TDF Index, etc.
Expert advisors are programmed in software like TDF signals, special signals, B signals, D signals, @ signals and many more which are meant to be used in different market conditions.
By default, TDF Software is installed with three templates.
1.Special and TDF- Fast
2.Special and TDF - Slow
3.Failure manager - Slow
As already explained in previous chapters, Special signals ,TDF siganls and @ signals are generated in TDF softwares.
All these three signals will come in one template i.e. Special and TDF signals.
Fast template has to be used if you are trading in above 15 min time frames.
Slow template has to be used if you are trading in below 15 min time frames.
Failure manager template has to be used only when a trade is failed.
This will be explained in subsequent chapters.
You can create as many templates as you want with any indicator of your choice.
T.D.F.Software comes with multiple timeframe automatic scanners which scan thousands of stocks in seconds.
Scanning process continues for every new tick and whenever new signal forms on the charts , you can see the signals in the scanners .
You need not open each and every chart and you need not watch all time frames manually for signals.
This reduces lot of work and strain .So, you will never miss any signal and you can trade any number of instruments and markets without worrying about signals..
Screenshot of the scanner is shown below.You can see the time of the signal, name of the stock, name of the signal,and the signal price and current market price .On right side of the scanner window you have trade and chart buttons.
If you click the chart button, price chart in the time frame on which signal has come will open.
SCANNER IN U.S. MARKETS:
Whether we trade special signals or TDF signals or @ signals. we always place buy stop and sell stop orders. Thatmeans we do not buy at market prices as and when buy and sell signal comes.
If any buy signal has come on any candle, we will put buy stop order above that candle high.
If any sell signal has come on any candle, we will put sell order below that candle low.
In some exchanges you have to provide two prices when placing buy stop orders. These are called trigger price and limt price. In some markets like forex, you have to give only one price. so, trigger price will be enough in markets like forex.
The candle on which signal has come is called signal candle. You have to place orders exactly as per the below equation.
Buy order prices should be as follows.
Trigger price = Signal candle high +spread
Limit price = Signal candle high + 2spreads.
Sell order prices should be as follows.
Trigger price = Signal candle low - spread
Limit price = Signal candle low - 2spreads.
We follow the same above formula to place stoploss orders.but we will add one more spread while placing stoploss orders because we do not want false stoplosses to get triggered.
Stoploss Buy order prices should be as follows.
Trigger price = Signal candle high + 2spread
Limit price = Signal candle high + 3spreads.
StoplossSell order prices should be as follows.
Trigger price = Signal candle low - 2spreads
Limit price = Signal candle low - 3spreads.
spread is the difference between bid and offer price in the market.
It is normally 10 paise for every 100 rupees in NSE for cash and futures.
Nifty spread is 5 rupees and banknifty spreaed is 10 rupees..
In commodities it is not same for every commodity.MCX exchange spreads are given below.
- Gold - 10 rupees
- Silver - 20 rupees
- crideoil - 4 rupees
- Naturalgas - 20 paise
- Aluminimum, lead and zinc - 10 paisa
- Copper - 20 paisa
- Nickel - 50 paisa
- Menthaoil - 50 piasa
Note: For other exchanges also,You can find out the spread by just looking at the bid and and offer rates in the market watch.
Before going to explain the rules of our special ,TDF and @ signals, we wish to show you a simple trading system without any rules.
This system is being shown because many traders just want simple system which can make money . Though the accuracy of the system is not so high, it is better than many trading systems which are available in market.
If you use double stoploss strategy(DSL) and multi stage stoploss system (MSL) , you can get very good accuracy even in this system.Though we like this system, we do not recommend it because we are not filtering the signals. So, observe the signals on different instruments and then take a decision.
Some charts with this system are shown below .
All signals on the charts are not tradeable. There are some limitations.
Limitations of the signals:
1."TDF signals and @ signals" cannot be traded against " TDF oscaillator B ".
2. "Special signals "can be traded in the direction of TDF B and against the direction of TDF B.
As explained in previous chapters, TDF oscillator B represents trend of the stock in that time frame. In short form, TDF oscillator B is mentioned as "TDF B".
TDF signals and @ signals are trend following signals . so, they cannot be traded against trend.
But, special signals are breakout signals. They can be traded in both directions i.e. Special signals can be traded in the direction of TDF B and againist TDF B.
--> So, only TDF buy and @ buy can be traded. (TDF sell and @ sell cannot be traded)
--> So, only TDF buy and @ buy can be traded.
(TDF sell and @ sell cannot be traded)
--> So, only TDF sell and @ sell can be traded. (TDF buy and @ buy cannot be traded)
--> So, only TDF sell and @ sell can be traded.
(TDF buy and @ buy cannot be traded)
Important point : Above rules are applicable only for fresh entry . If TDF signals and @ signals are against the trend of TDF B, they will be used as stoplosses if they are valid signals as per previous chapter.
Trading TDF signals is almost similar to @ sell signals. @ sell signal is explained with examples.
So, please refer @ sell signal chapter.
Trading @ Buy signals is almost similar to TDF Buy signals. TDF Buy signal is explained with examples.
So, please refer TDF buy signal chapter.
When a special signal comes in the direction of TDF oscillator B , it must be treated like TDF signal and same rules of TDF signals are applicable.
TDF signal is explained with examples in the above chapter no.9.
So, please chapter no.9 for entry, stoploss and exit rules.
Will be updated soon.
Stoploss rules ::
For buy position , stoploss should be below the lowest point in previous sell signal.
For sell position, stoploss should be placed above the highest point in previous buy signal.
Stoploss should always be with double qty because if stoploss gets triggered , we will go in opposite direction.
New expert advisor called "King of sonsolidation" is added in 2014 version which will help as stoploss and exits.
In everytrade , your risk is the difference between your entry price and stoploss price.
so, 1st target = 1 time of your risk.
2nd target = 2 times of your risk.
3 rd target = 3 times of your risk.
Always remember that, when you get first target, book 50% profit and move stoploss to breakeven.
If 2nd target is achievend , move your stoploss to 1st target.
If 3rd target is achieved, move your stoploss to 2nd target and wait for new signal to exit your trade.
Selection of Timeframes:
Many traders have lot of confusion about selection of timeframes.
Please remeber the following rule for timeframe selection.
Small time frame = Small stoploss, small profit and big tension.
Big time frame = Big stoploss, big profit and small tension.
Many traders think in wrong way and lose money in the market.
Small time frames have lot of volatility which will disturb stoploss levels with many false price actions.
Bigger time frames absorb all price action and ultimately proceed in the original direction of the trend.
As per our understanding, less than 15 minutes frame is small time frame.
It is not impossible to make money in small time frames.But you should have the psychology of a hunter to trade small time frame
As explained above , you will get small profits in small time frames like 1 min, 5 min,10 min, etc.
You can set the scanners in our software from 1 minute to any time frame
As the time frame increases , charts look smooth absorbing all volatility as shown in the charts below.
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