I agree, Woodies room is consistently, month in and month out, the best place to learn a good method. You won't find better help and encouragement.
i ran into a similar problem. i finally developed a system using the 1min charts that was profitable but i started realizing that had i been using the 5min charts i would have been pulling more profits and fewer trades. i still use the 1min charts for entry, but all of my setups come from the 5min. this tends to capture most of all the big moves during the day, and will keep you in trades for the majority of the move as opposed to getting out and back in 3 times during a move.
Nice post Vision. Beautifully written. I hear you. Going for the move is definitely where its at. Hard to play, but doable.
If you trade off of charts, backtesting is best done by hand. Fill in a spreadsheet as you go, with the date and time, for each trade. After this you can go back and study the winners. You can get a feel for what winners look like. Same goes for losers. It takes a long time, but you can internalize such a wealth of information that a computer program could not give you. It also makes a big difference in confidence when/if you take it live. I do it both by computer and by hand. But the computer part is only for a quick initial look. If i'm seriously thinking about trading something new i'll devote a few weeks to go through the charts by hand and build up a data table. In fact i'm starting a new one tonight! For an example see the "tradin' hammers" thread in the TA forum. If this is not applicable to your trading methods you can always hire someone to write a stand-alone program for you (me for instance, cheap).
I agree with peterfigliozzi suggestion, If I may add....include MAE and MFE in that spreadsheet. Michael B.
PF, Good advice. The way I accomplish my backtesting is in TradeStation. I DO NOT use the strategy tester though. What I do is scroll back over the data from several years. Advancing the chart on the "right edge". I document each entry in a s/s and then keep scrolling for the results. The one big issue with this, based on my style, is that I rely a lot on stochastic hooking. In realtime, the hook is "occurring/boucncing" In the backtesting, you don't get this. The hook has happened and in long timeframe charts, you can not be completely sure where price was when you got the hook. Thanks for the input though. I've got it in the memory banks. Appreciate it.
Funky, I hear you. I remember reading thru a thread where you were discussing this issue. I agree with you. One other note, although I knew commissions and slippage had to be accounted for with my VisionTrade system, I did not realize how much they actually impacted my bottom line until I got a real taste. It was even more evident as I really felt like I overtraded. No let me say that a different way. "I REALLY OVERTRADED". If someone starts a thread on overtrading, I'll jump right in
I don't know if I should laugh or cry. Your trying for an edge and your being shot like a fish in a barrel - with a hook in your mouth to boot while trading completely subjectively short term. Do you understand this? Here's a quote from a new thread that just started: "What you see on the screen is a ruse. It prompts average Joes to provide their contributions to the system. The lowest moth has a hundred ways of deceiving for survival â why not a chart? These ruses milk people for fractional costs of trading, while maintaining the image of hope." http://www.elitetrader.com/vb/showthread.php?threadid=20102