Custom Tailored System

Discussion in 'Index Futures' started by ElectricSavant, Mar 14, 2003.

  1. I wanted to start this I believe this might be a common question and some may be intimidated to a point of not asking. I hope this thread helps you.

    I am a believer that one of the factors is to find a way to trade that fits your abilities, needs and preferences.

    To understand this many people go through years of trading and I suppose the pro's can just about adapt to any sytem or methodology. They seem to be able to recognize the character of the system and the instrument and adjust...kinda' like a chameoleon. Now they too have a favorite "way" to trade, but it does not matter as they can consistantly make profit.

    I know what I "like" in a "way" to trade now. I feel that I am half way there.

    I simply started out saying..."I want to make the most money...holding time, frequency of trade, drawdown, win rate and avg. win/loss ratio did not matter....whatever pays the most! I will adapt!

    Now that I know this is wrong due to emotional factors that I am constantly trying to control, I want to ask the readers of this thread for some help. Also share where you are in this realization that I am discussing here.

    Here is my criteria:

    1)SP E-Mini is the Instrument

    2)Intraday w/no overnight holds

    3)frequency of trade 0-25 times a day or more, I like to have at least 1 trade every 2 days at the least.

    3)High win/rate and an avg. win/loss ratio to pay for the commish and remain consitantly profitable would be fine. This win/loss ratio does not need to be high, just enough.

    4) purely mechanical without discretionary decisions....just now...add to.....sell half.......sell....sell skirming in the seat...just press buttons.

    5) anticipatory with signal delivery to allow the execution at the signal price with a minimum of slippage.

    6) MOST IMPORTANT....I WILL SACRAFICE MORE PROFITABLE WAYS TO TRADE....IN RETURN FOR CONSISTANT SMALL PROFITS WITH THE MINIMUM OF DRAWDOWN. If I wish to make more money, perhaps after 6 mo's or 1,000 trades, I will have the confidence to increase my lot size.

    My tools include:

    1) Jtrader with 5.90/RT all fees...(no monthly fee either)

    2) Investor R/T

    3) E-sig

    4) 3 laptops: 1(p4)w/win XP pro.... 1(pentium2)w/win 98,.... 1 (pentium2)w/win 98.

    5) dsl

    6) cable

    Well....have at it.....lets see if we come up with anything....

    Michael B.
  2. dbphoenix


    The ORB system posted in the Keeping It Simple thread meets all your posted requirements, though it may not offer an emotional fit. The most recent set of rules was posted on 12/21.

  3. Thanx DB...I will check it

    Michael B.
  4. All you need is a coin, a tv and a phone.

    1. Flip coin, heads go long, tails short.
    2. If market moves against you 1 point, flip coin, tails hang on, heads exit for loss.
    3. If market moves in your favor 1 point flip coin, heads do nothing and wait for it to move another point in your favor.

    tails, go see if tv is showing a commercial. If it is, do nothing and wait for mkt to move another point in your favor.

    If you flip tails, and TV is showing a real show, then you have to wait for phone to ring to exit.

    Best r:r ratio occurs when tv is tuned to major network and all friends are kept alienated. (never let a telemarketer take you out of a good move.)

    Hope this helps
  5. Profitseer,


    1) Can the coin be weighted with a 'Lagging indicator"?

    2) Will you phone me when I am profitable?

    3) Could I purchase Telezapper for the "False breakouts"?

    4) How does watching the "Lifetime channel" effect the system? Perhaps "Animal Planet" could be an alternate choice?

    Michael B.
  6. ZBEAR


    Profitsser that is my Proprietary System.

    I am going to sue.
  7. You didn't mention how much money you were willing to risk per trade. Are you comfortable risking $50 or $500 per point? Following up that question is What percentage of your capital are you comfortable risking.

    I personally have ascribed to the notion that a trader, who wants longevity, should not risk more than 1% of his/her capital per trade.

    Therefore, if you decide that you have $10,000 to trade eminis, then you need to custom design a trading style where you are only risking $100 or 2 pts per trade (if you want to only risk 1% of you equity). :cool:

    Of course, you can do the rest of the math for your own specific case. My point is ... when you custom tailor your system, be sure to include money management and risk management.

  8. Spreadm

    Thank you for your thoughtful question.

    Fortunatly the equity size can be sized to the 1% formula. The ratio is what is important.

    10k 15k 100k does not matter. But your point is 2 points per 10k...this is a good observation for me.

    Now the question is will the dynamics of the system work with a 2 point stop.

    Again...a pro trader will look at this very question...and adjust. I am looking for specific criteria...So your point brings out a new question.

    Are there multiple systems that can fit my criteria with differing stops?

    Remember read my criteria carefully and pay special attention to win /rate and Avg win loss/ratio, while controllling a MINUMUM OF DRAWDOWN AND SKIRMING IN THE SEAT. I am not looking for the most money!!!! REALLY! It is much more important to find the the entry timing to yield at exit the long term DAILY consistancy of profit taking out of the market. This is what I have learned that I am most happy with. I am not a new trader and I have tried several methods...and I am currently trying several "work in progress" methods. I DO NOT WANT THE HOLY GRAIL.

    I am discovering this hypothetical system we are discussing here must adapt and use solid fundamentals within technical analysis. This point was another forgotten point. I have discovered with the criteria I am searching for there must be a method to capture both wide range days and low range days. I do not need the highs and the lows....but I need say just a few points per make it easy give me 3 points a day......I can always control the bottom line with solid MM to increase lot size.

    I have observed Nitro in the Chat room and he is able to take break even trades at a heartbeats pace and then capture small increments of ticks. He is truely an artist...but don't tell him I said that. Anyway's my point here is that his scalping method seems to fit my criteria...but it is a lot of work! Plus he makes his living from this and he say's the same thing as I do to inquiring minds...NO

    Michael B.
  9. ptt


    Electric, it almost sounds like you are looking for the grail, especially when it comes to the low draw down part. It seems that most mechanical systems have draw down, and that's what causes problems for a lot of traders because trading through those drawdowns can be painful.

    On the other hand, I think there probably is a system that can be consistant with low drawdown, but it is not a simple system. I will be watching to see if your thread pulls up any good ideas.

    Here is a quote from daniel_m that is somewhat relavant:

    03-15-03 04:40 AM
    Quote from candletrader:

    I view such days as simply a bonus... what counts is consistency throughout the year, not the occasional windfall day like Thursday....

    quote from daniel_m

    i totally disagree.

    i labored under the misconception that a 'consistent' return was the best way to trade. (taking $X from the market every day, or every week). sold myself way short doing so.

    markets simply aren't conducive to making a 'consistent' return on them. they fluctuate through periods where the going is good, to where it is not so good.

    it is imperative that you take advantage when the going is good.

    consistency is important when you're working at a job, it's fool's gold for a trader. there's nothing wrong with treading water, or losing money, while the going's tough.

    but you have to make sure you're ready to pounce when days like thursday come up.
    for probably the first time in my (short) trading career, i can happily say i was. luck? maybe. but maybe the trading shibboleths of the old timers -- who have made a dollar or two -- are worth paying more than just lip service to.
  10. ptt,

    Perhaps you are correct. I read your post with disappointment. To me the holy grail and finding yourself never match. That search I had in the beginning differs from the search I have now. I have traded long enought to know what makes my job enjoyable.

    I hope this thread will benefit some...and maybe it will not discover the anwer to my criteria. I will continue my search though.

    To me..... I am not being unreasonable to ask for a "cycle" or a way to 'time in" 3 points a day? No matter what the character of the market may be...this would always be possible.

    My vision is to bracket in all the swings, reversals, highs and lows and calibrate it with the average range to get in the middle and grab out a piece of profit.

    Being conservative....I think there will always be 1 trade or more every 2 days and my other criteria to satisfy my needs. I do not mind watching the market all day everyday to grab the 3 points....I do this now...I enjoy my job sometimes. I am just searching for consistancy..I can make the numbers bigger with size.

    If anybody has some ideas....please contribute. We can write are system together collectlivly in this thread.

    Michael B.
    #10     Mar 15, 2003