How 'simple' is your trading system?

Discussion in 'Trading' started by bjg, Aug 20, 2006.

  1. bjg


    Anyone here just trade chart patterns and volume? Or rather, anyone here not use indicators?

    I don't, but I'm a swing trader... however I do sometimes use the RSI to give me an idea of recent buying/selling activity.
  2. how many swings a year and what profit are you compounding per swing?
  3. bjg


    On average about 1 opportunity per stock I follow (20) per month. So about 240 opportunities a year.

    Expectancy: 0.43
    Win/loss ratio: 3:1
    Wins: 50%

    Do the math with different risk percentages.
  4. My system? Simple to explain.
    The ability to properly execute it and manage the trades? Probably a tough job for most, it's even tough for me sometimes, especially when volatility is low.
  5. When I trade the ES, I use little else but patterns (laterals, pennants, cup / handle, double bottom / top, etc.) and volume. I have the MACD and Stochastics on the chart, but rarely glance down to see them. When trading equities, I use the indicators as the 'set up,' but I use the pace of price and volume as the signals for entry / exit. I trade the ES intra-day, and equities over a period of 4 - 8 days.

    - Spydertrader
  6. Define simple.

    Using a single chart with OHLC data, with no indicator is simple.

    Buying someone else's system and autotrading it in a bot broker is simple.

    Trading in a CME / CBOT pit as a local is simple.

    Developing models and having it automated via FIX / API is simple.

    Having a CTA / Hedge Fund trade your account is simple.
  7. I'd assume, simple would be being able to explain your system to someone who doesn't know much, if anything about finance, and have them understand it.

    I believe I could explain to my sister and her husband my system within a few minutes and they would understand, as I can properly define it and everything, although a lot of discretion and intuition is involved.

    I think that is a fair definition, what do you think?

    I personally believe, after all the knowledge I have... if you can't explain your system to someone who knows very little about finance, and have them understand it even a little, then your system is either automated with very complex algorithms and all that, or it's just fairly complex and involves a lot things....

    Of course a complex system isn't that bad if a trader can execute it, but a simple system can be more flexible and I think is better for newbies, as I started with all that complex crap and indicators and it didn't do a thing for me.

    We all know this stuff though, blah.
  8. bjg


    Sorry, by simple, I probably meant naked TA. That is, without using indicators etc., just charts and price action. No influence by news, announcements, etc.
  9. Well yeah, that's essentially what I do, but I use support & resistance and moving averages to determine trend.

    My trades take place on 1 minute tameframe and many last less than a minute.

    No Volume, No news, just me and the 1 minute timeframe.

    I draw trendlines and support & resistance lines to help though as when breakouts occur, I look for nearest S&R locations to determine R/R.

    I attached what my chart looks like, and that is all I use.

    That right there is an example of when I plot S&R, and probably is as busy as it gets, but most of the time it doesn't even have that on it, just the MA's.
    • oih.png
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  10. Trading on a 1-minute TF - dont your commissions or even a tick slippage wipe out your expectancy? Common sense would say so.
    #10     Aug 21, 2006