What it does
Every other stock strategy here can only buy. In a market that falls for a year, the best they can do is stay out. This one can also sell short: borrow the shares, sell them, and buy them back cheaper if the price falls.
Shorting a stock in India is only allowed within the day, so this is an intraday strategy by law as much as by choice. Every position, long or short, is closed by 15:15.
How it makes money
It watches the Supertrend line on each stock. When the line flips below the price, the stock has turned up, and it buys. When the line flips above the price, the stock has turned down, and it sells short. Either way it needs the ADX to confirm the move has strength; with no trend it waits.
The exit is the next flip. A stop and a target bound each trade in between, at the same distances in both directions.
A worked example, in rupees
Illustrative. ₹1,00,000 account, balanced version, a stock at ₹1,000 on a day it falls.
- 10:30 entry
- sell short at ₹996 as the Supertrend flips down with ADX at 23
- Position
- 8% of the account, 8 shares
- Stop
- ₹1,011, 1.5% above
- Target
- ₹966, 3% below
- 14:05 exit
- buy back at ₹972 as the Supertrend flips up
- Result
- ₹192 before charges, about 0.2% of the account
The short side is what makes a falling day usable. It is also no better at choppy days than the long side: a flip up, a flip down and a flip up again costs three stops. Our two-year test of this family lost after charges, and it is not published.
When it does well, and when it hurts
Does well when
- Trend days in either direction. A sharply falling day is as good as a sharply rising one.
- Volatile markets, where moves are large enough to clear the stop-to-target distances.
Hurts when
- Choppy days. Two directions means twice as many ways to be whipsawed.
- Shorting has its own frictions: borrowing rules, the risk of a sharp short-covering bounce, and auto square-off penalties if a position is somehow left open.
What the robot does when a trade goes wrong
These are the real rules, in the order the strategy checks them. Nothing here needs you to be watching.
- 1
Exits when the trend flips
The next Supertrend flip closes the trade, long or short.
- 2
Stops a few ATRs away
Above the entry for a short, below it for a long.
- 3
Takes the target if reached first
Two-and-a-half to four percent, by version.
- 4
Only trades between 09:30 and 14:30
No new positions in the last hour; everything is closed by 15:15.
Adjustments, and why it does not make them
It never flips directly from long to short on one bar: the first flip closes the position and the next clean signal, if the ADX still agrees, opens the other side as a fresh trade.
No adding, no averaging, no moving the stop further away.
The three versions
Each strategy comes as conservative, balanced and aggressive. They share the idea and differ in how much they risk once in.
| Setting | Conservative | Balanced | Aggressive |
|---|---|---|---|
| Companies | 3 | 5 | 6 |
| Trend strength needed (ADX above) | 25 | 20 | 18 |
| Stop | 1.25% | 1.5% | 2% |
| Target | 2.5% | 3% | 4% |
| Position size | 5% of the account | 8% | 12% |
Entry: Between 09:30 and 14:30 when Supertrend(10, 3) flips and ADX(14) is above 20
Action: Buy on upward flip or sell short (MIS) on downward flip with 8% equity
Exits: Close on opposite flip, stop at 1.5%, target at 3%, or square off at 15:15
Want a stricter filter, a different stop, or your own stock list? Open a working copy in the builder and run a backtest.
Customize this ruleRisks you should know
- A short position loses when the stock rises, and a stock can rise without limit. The stop and the same-day close keep that theoretical, but it is the reason shorting is treated with more care.
- Charges on frequent trades in both directions.
- Not yet published; it has not cleared the quality gate.
The jargon, explained
- Supertrend
- A line that sits below price in an uptrend and above it in a downtrend, and flips when price crosses it. The flip is the signal.
- ADX
- A number from 0 to 100 that says how strongly price is trending, in either direction. Below 20 is drifting sideways; above 25 is a trend worth following.
- ATR
- The typical size of one bar's move. Stops in these strategies are set a few ATRs away so ordinary noise does not trigger them.
- Intraday (MIS)
- A position the broker requires you to close the same day. It allows larger sizes and, for stocks, is the only way to sell short.
- Square-off
- Closing a position. These strategies square everything off by 15:15 so nothing is held into the next day.