New Inandlong Line in the Sand System

Discussion in 'Strategy Building' started by profitseer, Sep 17, 2002.

  1. You could use the inandlong line in the sand for an entry and profitseers time tested system for the exit since as you will recall the time tested system has no entry only an exit.

    I've traded this system and here's how it goes.

    Day one, expect to get stopped out maybe 15 times.
    Day 2 get stopped out 3 times
    And then maybe more later on in the week

    If I was trading es, I would allow 10K per contract

    I would try to adjust the stop each day to represent a 1% profit per day (or maybe .5% profit per day depending) but that has to include all the losses and stop outs from day one on.

    So if after one week I have 20rts and say 1.5 loss per r/t that is $1600 in losses. So I am starting off 32 points in the hole. But if after 30 trading days the market has moved 62 points in my favor, there's my .5 per cent per day. And if the market moves more than that, I move my stop 1 or 2 points a day.

    And that's just a vulgar start. Good luck on day one could make profits dramatic. Bad luck could blow you up all the way. But it would have to be pretty bad luck to wipe out 6k at $80 per loss. You have 75 stops to either make it or break it. But if you go all the way to 75, you need 120 points to break even.

    What we need is a hobbyist who doesn't have to trade for a living to test this out for us in real time with real money. And even if it works for him, would you have the guts to try it? Those drawdowns sure look different when you are approaching them.

    You know what inandlong? Both of these crazy systems we've designed have backtested out remarkably profitable!
    #11     Sep 17, 2002
  2. What else did you expect from a couple of savvy traders!

    Marketsurfer admonished me today not to give away all the secrets. Have we said too much? Have we given away the goose that lays the golden eggs?

    Surely this will be the end of profitability as we know it.

    I wonder what happens if I draw an elipse..... then when the price...

    #12     Sep 17, 2002
  3. long,

    the infinity symbol seems to work--check it out !!!

    :p :p :p :p

    #13     Sep 17, 2002
  4. In and long,

    Yes its Tradestation code. But as a system it has some massive shortcomings. It just shows that a system can be extremely simple and still make money.

    Profitseer, you're really got me excited about this line in the sand system.

    A good mathematician could probably calculate the average number on times the current price of a market is likely to travel across a given point in a givin period, as well as measure an optimum price target based on volatility.

    As I said, the hardest thing with this system is knowing when to take profits.

    #14     Sep 17, 2002
  5. Surfer there you go...always showin' me up. I build a new house, you buy a mansion. I get my wife a nice card, you have a kid. I draw a ___ , you trade the oo !

    I feel so inadequate. The closest thing I have going to managing a hedge fund is keeping track of the landscaping costs around my house.

    I like the ~ , it has potential! I'm thinking keep it as is for shorts, so the entry is a little higher than the exit... always good for profits on shorts. And then invert it for longs so the entry is a little lower than the exits, again, good for longs.

    Oh boy oh boy, I feel 2-3 hours of backtesting comin' on. Ah, heck with that, I'll just trade it real time tomorrow.
    #15     Sep 18, 2002
  6. provide an exit strategy for your ingenious line-in-the-sand method or shut up and stop wasting our time!! you're so irritating me.
    #16     Sep 18, 2002
  7. runningbear, If you double your money and then exit, what then?

    If you think about this awhile, you start to see how all the different components of a system are the result of another part of the system.

    For instance, this system as it stands has no setup. Without a setup, why do you need an exit? As soon as you exit you can get right back in because there is no setup.

    See what I mean?

    So, just simply adding a setup, then requires an exit so you can be out for the next setup, or at the very least it gives you something to do after the exit, namely, wait for the setup.
    #17     Sep 18, 2002
  8. and then we could go with out of the box exits, like, just take profits whenever you need them.


    Once you get this trade up and running, just refer to John Bogles books on buy and hold investing.
    #18     Sep 18, 2002
  9. The aphie exit

    then you get basically a trailing stop and reverse system. The only difference is you might have one value to trail the line, and then once the line is triggered another very tight value for the ensuing battle.

    And then there is the DMZ method, where you stay neutral in a wide swath, long above and short below.

    Add a few setups, and before you know it, the system is so complicated that it can never be properly backtested.
    #19     Sep 18, 2002
  10. Profitseer,

    I still believe that in theory at least, the system is less likely to whip you back and forth arcoss the line when the market is extremly overbought or oversold. During sideways movements it will give back a lot of profit.

    Thats why drawing a line in the sand just outside support and resistance points is a good idea, because if the market takes them out, it is likely to move across them quickly in one direction, rather than sitting around them and slicing you to death.

    For example, you draw a line in the sand a couple of points above the previous days high. The market takes out the high and crosses the line in the sand getting you in long. It may cross back getting you short once then reverse with force to continue long. Three enties and the market is off in one direction with force.

    If you placed the line at random, and it was 5 points under the high of the previous day, it could cross the line 5 or 6 times and never breakout.

    Im not trying to complicate a simple idea. I just want to minimise the potential for loss.

    I really do like this system, I can already recall two instances in the last three months where, if I had of been aware of it, I would have made a fortune. I think I will make a killing with this technique by using it selectively 3 or 4 times a year.

    #20     Sep 18, 2002