- : January 23, 2021
- : Prashant Shah
FAST is a strategy for intraday trading in stocks.
Click here to view the video
Stock selection, entry and exit levels are clearly defined in FAST strategy. There are two important points in this strategy:
Being in news, there is more volume and attention to the stock. Anchor column is a price confirmation.
- Anchor column
- Stock that is in news
Reason for these rules is: Many of times we get price action in charts, but they lack the attention which is not very useful for intraday or a short-term trader. At times, stocks in news lacks the price confirmation or action and we end up trading them without any benefit.
Can we develop scanners for FAST?
Actually, No. Because you can’t scan for stocks in news. Your friends will tell you that.
But you can run a scanner for Anchor column and check if stock is in momentum. Normally, stocks with significant gap-up or gap-down will have some news. Anchor column is a parameter to know whether that news is significant.
How about an idea of trading FAST strategy whether stock is in news or not?
This is fine. If there is an anchor column, there must be some news and we will trade follow-through instead of searching for news. We will ensure stop-loss is affordable and placed in the system.
But technically, this will be Anchor column Follow-through strategy. Super Pattern, ABC, T20 etc are basically Anchor column follow-thought strategy. Even if you don’t know them, you can learn method explained in FAST strategy and develop a scanner for it. Let’s call it A FAST.
P&F and Renko chart methods are objective in nature, if you want to develop scanners on them – draw the pattern you are looking for on a piece of paper.
See below image – Will you want to buy this for Anchor column follow-through?
It is a double-top buy followed after Anchor column and box-price is above moving average. So, it qualifies for A FAST.
To know breakout level in advance, you can look for stocks in column of ‘X’ but yet to trigger a double-top buy.
Check below image.
You can define column number for any query in TradePoint System Builder. Numbering starts from recent column to the left. Column number of recent column is 0, previous column is 1 and so on.
So in above image, Condition is ‘Not double top buy’ on column number 0. And Anchor column on column number 2. You can also define the stop-loss. If you want stop-loss of not more than 8 boxes, put condition as ‘Number of boxes not more than 6’ on column number 1.
But with this condition, you will miss on the stock that immediately turns to column of ‘X’ and triggers double-top buy signal. If you want to trade only upon double-top buy, then condition on column 0 should be ‘Double top buy’.
Anchor column Follow-through can be triggered on subsequent columns also. You can run above scanner and keep a track of instruments as long as they are above the moving average.
Check below image.
Even above pattern qualifies for Anchor column follow-through. There is no limit for number of columns for follow-through and it is difficult to define Anchor column follow-though in system builder because of that. But our attempt is to make it objective as far as possible so that we can run the scanner and get the list of stocks to analyse.
Below are the conditions for above scenario:
We can build scanner with above conditions and track the stocks. It is possible that double-top buy signal is generated in subsequent columns and it is valid as long as stock is above bottom of Anchor column and moving average.
I assume stop-loss of not more than 10-boxes, so I have put condition as ‘Number of boxes not more than 8’ on column number 1. You can select what initial risk you are comfortable with.
Condition number 4 can be removed from above list if you are also looking for stocks giving opportunity to re-enter.
We can go further:
- Not Double top buy on column number 0
- Box above moving average (10-column SMA) on column number 0
- Not more than 8 boxes on column number 1
- Not double top buy on 2
- Anchor column on 4
Even above image qualifies for it.
Below are the conditions to define above scenario:
How to define that in system builder:
Go to TradePoint -> Backtesting -> Sytem Builder –> P&F -> Add
- Not Double top buy on column number 0 (You can select Double top buy)
- Number of boxes less than 8 on column number 1 (You can define your risk parameter)
- Box above MA on column number 0
- Anchor column on column number 2
- Anchor column on column number 4
- Anchor column on column number 6
Can you give it as a ready-made system in TradePoint?
We will. But, designing patterns this way will give you more ideas to play around it. You can change box- value requirement, you can define whether you want to scan up to 6th column or you are fine up to four columns, you can define your risk parameter etc. These things will help you to gain more conviction in trading.
Some tips on FAST strategy:
- It is a momentum strategy, if you see a trend or sudden gap-up / gap-down in Index – Go FAST.
- If you see a momentum in a particular sector or group of stocks – Go FAST in them.
- If you see sudden news in a particular sector or a stock – Go FAST in that.
- When you see most of the traders are shocked due to a news or a price action – Go FAST.
- When you see a lack of momentum in market – Go slow in you FAST strategy. Trade less or be a lazy trader on that day.
- If you get a FAST trade in index – don’t miss that.
- Please follow number of maximum loss rule or initial risk explained in the video. There can be a bad day, but those rules will help you to handle them. Overall, these strategy can have a positive expectancy.