/es momentum/flag trades

Discussion in 'Journals' started by trendisciple, Sep 19, 2011.

  1. long time lurker, finally thought i'd share something, i'm not sure if this is the right place to do it.

    i am probably in the 1% of people who never really failed at trading. i never blew up an account, i never even lost money really, my equity curve never went in the red, not once. probably because my personality is that of a lurker, i learn, absorb, educate, read, until i feel i'm ready to give something a shot. i didn't start live trading till last year, after 4 years of reading trading forums, books, etc.

    a bit about me: i don't like holding onto a trade longer than 6 hours, but i don't like scalping, it doesn't fulfill the trader within me, though I have no doubt I could make money scalping. anyways, i needed a strategy that was somewhere inbetween in terms of how long i was holding onto my position.

    when i discovered rate of change/momentum i knew it was the indicator for me. for months, i gobbled up various iterations of them from different sources, coding them to fit thinkorswims platform(which im too in love with to depart from to this day).

    all i generally use on my bars is rate of change, and a "MOST" anchored momentum indicator.

    here's some info on the anchored momentum indicator: http://www.carljohnson.net/LDN/Technical_Analysis/Momentum and Divergence/Anchored Momentum.pdf

    my trading style can be summed up in one sentence: price has to make up for momentum.

    as with many good trading styles/systems, everyone wants concrete rules, where none can be provided, you just have to get a feel for the thing, and it's better shown in graphs than explained in words (especially for the beginner)

    the risk of being on the wrong side of the trade here is very large as we are playing at the brink of reversal points....the goal is to not get shook out with too tight of a stop but also to keep your sharpe high.
  2. SonnyJim


    Looking forward to reading your journal...big fan of detecting momentum changes myself...
  3. thanks, i really like the anchored momentum because it reflects price more accurately and you can build trendlines on the actual momentum that give you great exits while capturing most of the trend (sometimes you need to draw more than 1 since momentum starts fast at first and then slows down ---i.e. you need one steep line to catch the beginning but then you might need a shallowerline to keep with the slower part of the trend

    one thing not shown here is that i always fade exhaustive spikes, anything that looks like an exhaustive spike, i exit on the first sign of weakness and short

  4. Trend, would you mind posting the code for the momentum indicator at the bottom of your chart for the think or swim platform?
  5. wildshoe



  6. Thanks Wild!