In Entropy, we take leverage of the fact that stock market follows the normal distribution and we apply the methods using Bollinger Bands and other means of mean reversion. We have few in-house strategies modified for NSE which is namely BRS, 3BB, F3BB, FIBS.
As the strategies are in-house, we had to code our own scanner using Python which is right now linked with our slack as well as Zerodha directly. It’s a profitable strategy and running successfully!
Currently, it is free, and you can use it by joining our slack group –
How the scanner is coded –
Time Frame of the scanner is 5 min + 10 min + 15 min.
Now not all three can ever have one candle inside 1SD and next open and close outside 1SD at the same time; so system handles it beautifully to check where it is strong and if other timeframes are supporting it or not. So basically you should get open close both outside on all timeframes and one timeframe should have the previous candle inside which is mostly 15min time frame.
Here is how you can trade –
- Take entry at BRS signal, Exit at fixed SL & Target
- Take entry at BRS signal, Exit at fixed % of SL & Target
- Take entry at BRS signal, Exit as soon as you see profit [recommended]
- Take entry at BRS signal, Exit when price crosses 1SD median line
- You can take limited trades by filtering it further
- Wait and watch till BRS gets converted to 3BB and trade 3BB
We have added few more filters and conditions to minimise false breakouts. It also checks immediate daily trend to ensure more profitability.
Our current exit strategy for this scanner is exit when price cross-median of 1SD Bollinger band on 15 minutes time frame.
We have run this strategy live in our accounts where we traded in this way –
Suppose there is a short BRS on JUBLFOOD. Then we short x number of shares. Here x is 2,00,000/CMP.
So if 1073 is the CMP while shorting we have shorted 186 shares as 186*1073 = 199578
Considering 3x as average leverage (as we select all FnO stocks) and all trades mostly last MIS; capital required per trade is around 65K.
The BRS Scanner was free and we didn’t monetize it for a long time. Then we improved our scanner which gives BRS as well as 3BB. It gives us an edge to add scripts to the watchlist which are in BRS and hence probable 3BB.
In case you want to check performance difference of our Entropy Scanner Version 1 (BRS Scanner), click here. In case, you want to check the performance of the current version of Entropy Scanner (3BB Scanner), click here.