Cycle strategy

Hello Everyone,

I've posted a couple of times in the past sharing some of the things that I've found useful (or at least interesting). I've recently created a page that outlines the indicators and strategy involved in the creation of my automated system.

If you have some time to kill and you'd like to see some screenshots of my strategy along with the logic behind the trades that it takes, you can go to:

http://bobby.kimble.googlepages.com/cyclesystem

P.S. - I'm not selling anything. I just thought that some people might be interested in looking at an automated trading strategy.

Enjoy!

-Hoo_doo

 

Excellent!
You are on the correct path in your methodology.

You should look to add some sentiment type indicators to the mix to increase the odds even more in your favor.

I use much the same type of method, using monthly, daily, hourly.....down to the tick level cycles; along with price momentum; price trend; sentiment plus 30 years of experience in making my discretionary decisions.


RTS

 

Depending on time frames, have you thought about adding something like ADX or something to determine if there is trend/volatility?

Or perhaps you can add in increments of 1 pt or whatever.

Sideways choppy markets can be costly since they might appear to oscillate (since they flatten) and indicators start showing a divergence when there is a stop run etc.

Alternatively, you could say that the differential between the 2 mas (say 5 and 34) has to be x to take a trade so if your in consolidations you dont take a trade.

Cheers!

 

Hi Hoo_doo,

I am not familiar with the indicators. Why do you classify double smoothing stochastics a cycle indicator? Are there any other indicators besides Jurik? Thanks.

 

Thanks for checking out my site!

On the "market cycles" section I've listed Jurik, Walterbressert.com, and Jan Arps as sources for well written double smoothed stochastic indicators. I prefer the Jurik indicator for a few reasons. The Jurik indicator is a bit faster than a traditional double stochastic, it provides you with several configurable variables, and Jurik makes the code available to you in a way that makes it easy to add to an automated strategy.

I refer to the double stochastic as a "cycle" indicator because it oscillates very closely with the tops and bottoms that form the cycles in the chart. If you are interested in learning more about cycle analysis in the market I would recommend reading the Profit Magic book by JM Hurst as well as the information on the Walter Bressert website. Also, there are threads on this site that are dedicated to cycle analysis.

Thanks again for looking at my site!

-Hoo_doo

 

rtstrading,

I really appreciate you taking the time to look over my strategy!

I've looked at adding different time frames into the mix. My problem is that I'm not really sure where to start with the times. I've found that using a monthly MA on a daily chart works well and that using a daily MA on a 45 min works well. coincidentally, both of these will create roughly 30 bars of the short time frame for every 1 bar of the long time frame. I don't know if that really means anything though.

I would really like to be able to trade a short time frame of around 3 to 5 minutes. Unfortunately, I've not been able to figure out what long time frame I should use to find the trend.

You mentioned adding a sentiment type of indicator. I'm always open to adding an indicator that will stack the odds more in my favor. Can you suggest a starting point for me to research these types of indicators?

Thanks again for taking the time to give me some feedback on my strategy!

-Hoo_doo

 

Thanks empee!

The sideways choppy market is definitely an issue. At the moment I take the "fishing" approach to avoid getting beat up in the chop. The idea being that I'll get in with one contract and if the other indicators show that the market is in my favor I'll add on really aggressively and then exit at the first sign of a change. Since I'm only in it for one contract at the beginning it's not that painful if I turn out to be wrong.

Bill Williams uses his "Fractal" breakout method for getting in at the beginning of the trend. This method seems to work very well at keeping out of the choppy markets, but it doesn't seem to work that well with my strategy.

I haven't looked at ADX in any great detail, but I will now that you've suggested it. Something to show volatility would be very handy!

I like the idea of setting a threshold for the differential between the MA's on the Market Accelerator. At the moment, I'm using the two oscillators the way that Bill Williams outlines them in his book for taking "zone" trades. When I have some time I'll probably add in some of the other trades he mentions just to see how they perform.

I really appreciate you taking the time to look over my system!

-Hoo_doo

 

hi bobby,

found your blog as i was searching for some cycle stuff.
most interesting. especially since i also use the bressert stochastic
indicator and the AO indicator from bill williams.
i have used the activefractal from bill willams as entry. but after some
false trades i do it without.
now i use mostly a simple price channel. average(c,10) plus a fixed $ above
and below. like the Pitbull Channel.
this helps me to avoid some choppiness.

i was never able to code it as a system like you that i can position
pyramiding like bill williams.
does this pyramiding is really an advantage opposite to buy once and sell
once?
anyway i always liked the idea like bill williams to ride the trend like
this <g>

if i may ask on which markets do you use your system.

thanks and please don't stop to contribute on your blog...i really like it
karla

ps: is it possible that your blog email isn't working?

 

Hoo_doo,

Using the indicators you talk about on your website(trends, momentum, acceleration, market cycles), whats your profit/loss on average?

thanks

 

Hi Karla!

Thank you for checking the link to my email! My email is working now. I accidently mistyped the address. D'oh!

I've found that the pyramiding definitely adds to the profitability. I look at it like this; I get in for one contract and if it goes bad it's really not a big deal. Once I'm in a good trade I'll add on really heavily. Using this method, my losers are typically only one contract and my winners are up to 5 contracts. This is similar to the Williams method.

I've tested the automated strategy on about 30 or 40 different futures charts as well as a myriad of different stock charts. Even though the strategy makes money on the majority of the charts, I'm mostly interested in the Euro, gold, and silver.

I've been successfully using this system for about a year on stocks. I was approached by another trader (a very successful one) who was interested in funding a futures account and helping me to monitor the success of the strategy. Unfortunately, my friend has had some serious family issues and has decided to stay away from the market for a while.

So, for the time being I'll be trading stocks and watching futures ;-)

-Hoo_doo