Sounds like a well thought system, DB. Any reason you only trade it with the NQ and not the ES? What would you suggest for stop and entry numbers for the ES to replace the +2 pt stop and entry , and 5 pt initial stop on NQ?
I don't know if anyone is paying attention to this thread anymore, but I worked on following my rules. I decided it was best if I didn't know individual prices anymore. So I removed them from my chart. In their place, I inserted a short exponential moving average. Now I trade on the average price vs. the specific price. It helps smooth out the patterns. I attached a chart to show you what I mean. I slide the chart window to the left, so that the price grid is off the screen while I am trading. It's too soon to tell how this will effect my account over the long term, but it is definitely a relaxing way to trade trends. Not knowing prices removes fear and greed as well. Banker
Banker, That's an interesting idea. I've toyed with doing something like that myself because I often find myself getting hung up over specific price levels, and as a result, often miss a good trade entry. However, I've never actually used a chart like that in real trading. I think it really cuts to the chase...if you're a trend follower, after all, you are really only concerned with three things: 1) is the market going up? if yes, go long 2) is the market going down? if yes, go short 3) is the market moving sideways? if yes, stay out of the market Your chart setup reinforces these three concepts, IMHO. The only thing that I can think of that would be a negative is that you might have to use larger stops, since you are only looking at the average price, and therefore might be more susceptible to getting stopped out by meaningless noise. Let us know how it works out for you.
what is the jist of don miller's strategy? can someone outline it here please? just want to get at least a general idea of what it is.
Corallus, Since the definition of trend I'm using is so vague (a general or prevailing tendency or course) it just made sense. Why get all stressed out over individual bars or candles? The real point to trend trading is riding a trend, and that doesn't require seeing each little detail. It's hard to use stops. I don't know what price I entered or exited at. Nor do I know the current market price. All I really know is the average price (in relation to other average prices, not a number) over the last X amount of bars, and more importantly the direction of prices. The stop would require me to put bars or candles on the chart, which is something I'm not willing to do. If there were a trading platform which would allow me to place a stop if the average price over 5-6 bars (or whichever moving average I am using) came to a certain level (maybe a trend line on my chart based on past average prices), then I would do it. But that's not possible as far as I know. So for now it's up to me to exit when the trend I am following no longer exists. Banker
but the candle structures can give you some inkling where that average price is going before it gets there. another piece of the puzzle that you are now blind to.
I see the average relationship of the candle structures. They are smoothed out for me. I'm not in a rush to be the first one in or out of a trend or structure within a trend. Trying to catch the top or bottom tick(s) will end up costing you dearly in the long run. I traded for years with bars or candles on my charts, I know exactly what I am "missing", and I don't miss it at all. Trend trading to me is not about predicting where prices are going, it's about following prices around. I don't want to know where the average price is going, I'll find out when it gets there. Like Db uses 2 pts away from a breakout structure to measure the level of intention. My average does something similar. This isn't for everyone. Banker
no offense but this seems to me a gimmick or crutch to deal with your emotions rather than developing real discipline to manage your trades properly. and it is at the expense of losing price data and market structures that many trade off of. i think i'd rather steel my emotions and keep the candles than throw away potentially important and useful information.
If you wake up each morning knowing that you going to travel down a very bumpy road (the market), do you take the Jeep out of the garage or the Cadillac? I take the Cadillac. My reasoning is that the road leads to the same place either way. I might as well have a comfortable ride. Banker