No, I do not use described principle. Position size depends on the stop to be used, ie 2 point stop max lots and 4 point stop minimum lots. Stops are defined by the probability of the system used at the time and S/R levels. The first trade yesterday (loss) was a 10 lot trade as the signal was not sufficient enough to trade maximum size, though the 3rd trade I believe was called by a primary system (high probability) therefore maximum lots traded and minimum stop used. EDIT: After the 2nd trade started shifting against me it got me thinking that I am not going with the flow, that my judgement is wrong, that's why I reversed in the 3rd trade. IMO following the law of averages, a proven system will eventually keep a trader in profit. Yes there might be draw downs during the day, but EOD is more important to me, than a couple of bad trades. Romik
Ok, it just looks like so...., nonetheless i just remember one trader, posted a lot in eminiblog (and irc channel), PT^ or something, he lost the money of the past 4 months in one single day by doing any martingale against a NQ trend, may be his pockets were not deep enough or his nerves to weak....all the time before he did very well, very good trading day in day out... @B1S2, by thinking about divergences, you end up that divergences are just loss of momentum, so far this means not too much, this can end in a turn of market, a reversal or it can be just a stall/pause of the underlying trend. There are times when divergences lead to a more or less tradeable move, and times when not. In a strong trend you can see 3-5 divergences in a row, just telling you that there is some stall in momentum between. In a more range oriented market, divergences are working often fine for a scalp at least. Why divergences seems to work more often than not is by the fact that very strong trends are not to often. By excluding false signals you should look for any further way to define the state of market, you will not find the solution by changing timeframes or indicatorlength or whatever. You need to find a way to define like, well, we are in a more rangebound market, the signals are doing well, or well , we are in a strong trend, take care with this signals. Your signals are probably fine, but not working in the wrong marketenvironment and doing fine in the other. It`s all about to find a definition of the state of market, not a matter of heavy finetuning your system. I´m out, weather is fine, good trading
I look on divergences too, but on a trendday i look only on divergences on a shorttimeframe in direction of the day`s trend, to catch a probable end of a reversal/pullback/congestion to enter in trenddirection
I scrolled through my charts to find a example, this is by my definition a trenddown, of course it`s to some degree subjectiv when a trend ends and the other starts, so the second divergence could be seen already in a new uptrend, but so late in the day(14.40) i don`t want to doubt the day`s overall trend, and my longer/slower MA did not moved up, so i have no uptrend and i look only for divergences to the downside and i ignore any divergences to catch a bottom(falling knife), if very good in entries you can make a few ticks by trading divergences against the trend, but the risk/reward is very bad. I need no second timeframe to define the day`s trend, i like to look at openprice and marketaction and my MA`s. I doubt the useability of 60 min. for daytrading in means of scalping, cause the state of market changes completely from one day to the other, the information you got over the last (1-2)days by 60 min. means not too much. You can have 2 days in a row beeing narrow range days, this means high probability of a coming trendday, the information of the 60 min gives you no edge for the tradingday looking for frequent trading cutting out a few points. If you use 60 min for estimating where this day may close and you are doing 1 trade/day, it`s a different thing.
System created several signals since midnight. They were: 0:54 bar Long at 1314.25 1:54 bar Short at 1313.25 2:30 bar Long at 1314.75 3:30 bar Long at 1315.50 5:30 bar Short at 1316.75 6:42 bar Short at 1316.50 7:06 bar Long at 1317.50 7:30 bar Long at 1317.50 8:18 bar Short at 1317.75
This is incorrect. Adding positions after losing is a huge part of my strategy and is one of the main reasons that I have been so successful over the years. The reason the statement is incorrect is that Martingale involves doubling positions. One doesn't have to do that (and I don't) when they are looking for a profit to run. In other words- while Martingalse may work for a while at Blackjack where it's 1 to 1 R/R, you don't have to use it in trading where your eventual running profit will be very large with size on.
Example of adding positions and creating income--let's add one unit each time as long as daily PNL is still negative in just these overnight signals-- we'll use limit orders which is what I use. Buy 1314.25 Sell 1313.25 loss 1 point one unit Sell 1313.25 Buy 1314.75 loss 3 points two units Buy 1314.75 Sell 1316.75 Gain 6.00 points 3 units Sell 1316.75 Buy 1317.50 Loss .75 points 1 unit Buy 1317.50 Sell 1317.75 Gain .50 points 2 units Sell 1317.75 Current price 1313.75 Gain 12 points 3 units. This is simply the correct way to trade--at least for me.
============ Helpful points & also there are profitable traders who trade with a bias , since like most of trends were down last week ,down last 20 days in DIA,YM,ES,SPY can certainly use that bias. Just like weekly, 20 days is now mostly up, same markets mentioned; in no way [zero %, goose egg]is that ''knowing ''what ''next bar '' as you correctly stated. ESpecially useful for swing traders; and intraday chart traders, scalper may not use that the same way
Long signal here on the successive higher RSI trough at 1315.50 9.54 bar. 12 min and 60 min do not agree.