Hi Ironfist, Here are some ideas which I have determined are useful to me which may help you as I seem to have had/having same issues. Try using a 250 - 300 constant vol bar , it gives a faster time frame but you get more pullbacks to trade without it being too fast. I use Button Trader for simultaneously entering orders, stops and profit targets and you can trail if you wish. In your scalping try just going for 10-15 pts as your profit target, I know there can sometimes be 50 points or more in a run but as jjrvat mentioned we are scalping, and dont forget to to leave some crumbs on the table for others and also its better to get to the exit door before the queue starts. In determining what is a good pullback I had a quality issue. I was trying to trade every pullback, it didnt work so I went to one of the older methods I have used and found that a stochastic will give a good visual guide when price moves into the ob/os territory. In a downtrend look for OB in a down trend look for O/S. Don't try to trade the stoch signals, as I'm sure you will see that the stoch sigs come after a price action signal, showing what more experienced traders keep saying, they are lagging indicators. In your chart I think it was today you mention the 240wma going red-green-red-green etc . Refer back to jjrvats comment earlier its the slope and as you can see it is horizontal , not much of a trend there I find that a good slope starts to show itself after the first pb after it goes under the 240 WMA. A trader also told me some years ago if you follow the trend you generally are only wrong once and thats when the trend changes (we know there are other instances but you get my drift ). Another tip I picked up on is after one or two pullbacks, if you think about it your are on your way to the end of the wave (probably) which you are trading, thats the time to be cautious and expect those pullbacks which turn into a wave in the oppposite direction. Can anybody comment on whether they have a daily goal and then out Done For the Day? I have found that I can generally get to 25-30pts early on then give back then get more then give back etc , so why didnt I get out earlier and take my points and run instead of paying the broker for the privilige? As for today well !! Richard
Really? I was thinking 500 constant volume charts on the YM was too fast. On the NQ I have to use 1100 to get a similiar-looking chart. How would your scalping method have done on the 4th chart I posted above (the one called "Large profit opportunities do not always follow PBP")? It's because of situations like that that I am not comfortable "scalping." Seems like I would lose more than I would win... Interesting. I'm going to have to take a look at that. You mean for a short setup, right? I find it to be inconsistent and random (ie. sometimes there are lots of pullbacks during a huge trend, and other times it reverses after 1), but I will give this another look as well. I have not found a certain time of day to be more profitable than others, so I try to take every trading opportunity that presents itself.
Since reading the thread 2 weeks ago my trading has improved. I've picked up 298 pips trading Euro Cable Yen and ASX200. I have done 94 trades so I have been collecting an average of 3.16 pips per trade. I do try to let the trade run beyond 6 pips. My trading account has increased 6% during this period. Which is OK but it could have been better. I decided to play the news yesterday and dropped 4% in quick time. Cost me 48 pips [its going up go long, no its dropping go short, oops I mean go long, I've had enough now]. And as I had just increased my stake this ended up costing me 4% of my capital...... In my experience PBP works well in trending markets and not so well in choppy ranging markets. I don't think theres anyway around that but to try and identify instruments that generally trend. Thanks to all posters.
Hmm so looking at the slope of the WMA... Right now I'm using discretionary definitions of "steep slope" and "shallow" slope. This is just right now for initial analysis and obviously is entirely unacceptable in a mechanical trading system. I'm hesitant to quantify the slope of an indicator (MA) because then I feel like Woody (Woodie's CCI club or whatever it's called) and I've never heard of a single profitable trader using his methods. Anyway, here's 5/13. STEEP WMA SLOPE: 3 winners 2 losers SHALLOW/FLAT WMA SLOPE: 1 winner 4 losers Color code: Green box = profitable trade (long or short) Red box = unprofitable trade (long or short) Trades entered when fast and slow MAs go the same direction. This makes me wonder if entry technique would be changed then: 1. Would I only enter a trade if the WMA was already in a steep slope when the FastMA change to match that slope? 2. Would it be ok to enter a trade if the WMA was in a shallow slope, the FastMA was going up, and then the WMA's slope became steep? I already don't like this because it's complicating everything. I decided to do 5/16, my worst losing day, and see what it looked like: STEEP SLOPE: 1 winner 5 losers SHALLOW SLOPE: 2 winners 5 losers Conclusion: 5/16 sucked and WMA slope had no bearing at all on probable results of trades. Back to testing. edit - isn't looking at the slope of the WMA trying to quantify how much it is "trending" and therefore it's as useless as any other lagging "trend" indicator like ADX, right?
I wish I could do that, but I see this situation all too frequently. You would have been stopped out. How do you set your stop loss? edit - and the slope was shallow when this trade began
Sorry for any confusion. I'm trying to not compare myself to Woody because I don't think he's a profitable trader and I don't think any of his students are profitable, either. No offense to any fans.
I coded an indicator that shows the change in slope of WMA from one candle to the next. I'm going to see how many bad trades it prevents me from taking and how many good trades it causes me to miss. I'm not planning on adding any indicators to PBP. I just made this one to help me visualize what is going on with the 240WMA. I have a feeling that it's not going to be helpful at all.
Taking the WMAs slope into account resulted in worse performance over the time that I have data for. For the 3 days I didn't have data, I removed the corresponding data from the control group to keep things fair. This system only took trades if the WMA's slope was more than a certain amount when the HMA changed colors. In every case there were fewer trades made with the inclusion of the WMA Slope indicator. In some cases, significantly less (2 as opposed to 14) and in some cases only 1 fewer trade. Performance was improved on 3 days (losses were less) and performance was decreased on 9 days (gains were less and losses were bigger). Since the addition of this indicator caused me to only take trades when the slope of the WMA was already steep, and avoid trades when the WMA slope was shallow/flat, the fact that performance decreased means that situations for making significant profits appear when the 240WMA is flat. As I suspected, all I've done is create another worthless "trend strength" indicator that gives no clue to when large trends will start. And just for fun, here's a screenshot: Only take short trades when the indicator is red (WMA sloping steeply downward), and only take long trades when the indicator is green (WMA sloping steeply upward). When it is blue, the WMA's slope is shallow or flat. Writing indicators is fun. No wonder there are so many.
Thats all and good but you need to realize the reason for a steep slope of the WMA (HMA or whatever). it is a moving average and it will always lag the price so a steep slope for the moving average means price has moved significantly already and a pull back may be due. this lowers the probablity. but....if the slope is still significant on a pull back and price action still shows valid trend continuation then maybe then that is a high probaility situation to get in. to me indicators help(on a very limited basis) but you need to undertand how they function with price which is the ultimate leader. imo