Keeping It Simple

Discussion in 'Index Futures' started by dbphoenix, Nov 27, 2002.

  1. dbphoenix


    No. What I'm describing has nothing to do with moving averages. Just price candles and trendlines.

    #11     Nov 27, 2002
  2. Ok, so instead of trailing exit stops along descending swing highs when short, you draw a trend line to track the trend (while keeping the stop at breakeven). When the trend line is violated, you then move your stop from breakeven down to the last swing high. If that gets taken out, you are out of the trade.

    At this point you watch and wait to see what develops. If it happens to be a new trading range you put entry stops around it. If there is no new trading range, and the trend simply reverses without consolidating, I'm not sure what you do.

    Basically it sounds like you expect the day to have a direction in general. Either up or down. You want to get as much of the daily range as possible. The day that starts at one level and ends near that same price level is perhaps not the best day for this. On the other hand a day that starts at a low level and ends at much higher prices could be good, or vice versa.

    Considering that you have a 5 point stop, I'm guessing that a profitable trade would be larger than 5 points on average. Or is it that the majority of the trades end up profitable, but not that large point wise? I'm leaning towards the first since it sounds like you don't want to be in and out often during the course of one day.

    I'm just wondering if the trend lines you draw generally hold up for a good part of the session. Usually the ones that I draw on 1 minute charts don't last too long before they are violated. Sometimes the break results in a new almost parallel offset line, sometimes it results in a consolidation which is followed by continuation of prior trend. Other times the break leads to a consolidation which ends up reversing the prior trend. At other times the trend line breaks, there is no consolidation, and the trend simply reverses. Maybe the trends I am marking are shorter than the ones that you are.

    Thanks for sharing, and have a Happy Thanksgiving.

    #12     Nov 27, 2002
  3. dbphoenix


    You look for the usual reversal ops, entering on violation of an important swing low if long. Find a point where longs are going to get rattled into selling and shorts are going to be drawn into entering.

    Preferably, there is only one trade, though it's usually two to four. This keeps you out of chop if you know reversal setups. If you don't know them, you don't have to play them, in which case you'd be out of chop entirely.

    I don't use the 1m for anything but entry. If possible, I use the 5m for trend. If that's not possible, I use the 3m.

    #13     Nov 27, 2002
  4. And I thought this thread was about keeping it simple. Am I in the wrong place? No, just checked again to be sure.

    Let's see, so after the entry which is very simple, as any breakout entry is, then it becomes a simple matter of: applying simple reversal techniques if I subjectively determine chop, and simple exit techniques if I have drawn the trendlines correctly, and simple swings if I have perceived the important reaction lows and highs correctly.

    Of course none of it occurs if a simple gap of a simple percentage happens first.

    I didn't realize the level of simplicity we were discussing here. Silly me, I posted a moving average crossover method that works but it was found to be unsatisfactory for a 1 lot trader.

    So here is another very simple method that I have used very successfully:

    First I begin with a simple range breakout method of 27 minutes unless there is news then I use 36 minutes. The reasons why are obvious. I use a 9 minute chart which neatly divides into the breakout time period. A caveat is if the opening tick for the new day beginning at 0930 EST is outside of the normal variance then I will not trade. The normal variance is actuall y a simple average of the 10 day normal variance multiplied by the ATR and divided by Pi.

    Okay this is where it gets a bit subjective, but this method is really simple and although I am the only one who can trade it, it is indeed simple. At some point when I think that the market has reached an emotionl crescendo such both longs and shorts are in a state of frenzy, which is a fairly simple thing to discern, I employ at that time Fourier Analyisis. From then on I know longer use the 9 minute chart, but rather the 2, 3, 7, 11, and 12 minute charts.

    These charts are significant because they are important craps numbers and instantly let me know if this is a winning trade or losing trade. If the trade is a short I look to the 2 , 3, and 12 minute charts, if the trade is long I use the 7 and 11 charts. Sometimes I will use all in combination depending on the market.

    From here it would be an insult for me to continue explaining this simple method because it is so simple.

    Of course I would be happy to discuss the specifics if asked, I mean, why would I post on a board if I weren't more than happy to discuss this most simple method.

    #14     Nov 28, 2002
  5. dbphoenix


    For a moderator, you have an awful lot of growing up to do.

    #15     Nov 28, 2002
  6. lol oh shit that made me laugh out loud. i actually didn't even know you were kidding at first. i was like, "is he serious?!" funny thing is, that sounds a lot like my trading whenever i try to make a system. hehe but i'm trying to get away from that...

    Db, i'm not laughing at you. i just find inandlong's explanation of a complicated "simple" system humorous.
    #16     Nov 28, 2002
  7. Oh lighten up db. You are so predictable.

    I should have just come out and said that for a thread with the title "Keeping It Simple", the method you have been describing is anything but; however, previously any post by anyone that disagrees with you in the slightest incurs a defensive and unproductive response, similar to the one you posted just before GG's, if not more so.

    So knowing the type of response you are going to post ahead of time, why shouldn't I have a little fun making the point?

    Have some more turkey and relax.

    #17     Nov 28, 2002
  8. inandlong you are funny as hell:D :D

    btw thanks for the simple method.

    db, whaaa...! is it possible for you to make it even more simple for us dummies?
    #18     Nov 28, 2002
  9. inandlong, do you trade this 5,20 ema crossover system all day or certain periods?

    i've never traded ma crossovers before, are you suggesting simply buying/selling when 5 ema crosses 20ema? is it really this simple? nothing else?:D

    anyone else have experience with this or something similar? does it work?
    #19     Nov 28, 2002
  10. db, you gotta admit your system is not simple:D
    #20     Nov 28, 2002