reversals

Discussion in 'Technical Analysis' started by nwbprop, Mar 23, 2004.

  1. I really appreciate all the ideas and replies. Lots of good information here. I will have to sit down and really study.
    Thanks again.
     
    #21     Mar 24, 2004
  2. Could you direct me to where I could conduct some tests as you did? Thanks.
     
    #22     Mar 24, 2004
  3. SumJurk

    SumJurk

    Hmmmmmm...sounds like if you reverse your strategy, you'll have a profitable method.
     
    #23     Mar 24, 2004
  4. As Ditch stated, "choppy" isn't necessarily a bad thing if you adapt your strategies to take advantage of the additional entry opportunities. The term "choppy" is used too much to describe movement that is not to our liking. The fundamental fact of the stock indexes is that they are positioning markets - to the extent that some make their living (not me) based on trend neutral trading (which is a fancy way of saying they make their $$$ from positioning rather than from picking the right direction).

    And as hypo stated so well in another thread, all trading is attempting to capture the trend. It's just a matter of which timeframe of trend you are attempting to capture.

    Just because trend trading the ES was a loser's game for you doesn't mean everyone is losing trend trading the ES. It only means that you have proven that the trend trading strategy you used or tested was a loser.

    The key to trading is coming up with a strategy that matches the market. The stock indexes have certain characteristics that can be exploited and at very least should be taken into account. If your strategy does not take those tendencies into account, then how can you expect it to be profitable? Your method will be fighting the trend so to speak. Just because books talk about moving averages and oscillators, does not mean that they are going to work on a particular market as they were presented. Profitable trading requires creative solutions that come from really understanding your method and market, and which don't flow from tearing off the shrink wrap and clicking the "optimize" button on your new backtest software.

    From what I can tell from the system being discussed, this might improve results though it would have to be tested. There is no guarantee that there is any edge to this current incarnation of the system, regardless of which market it is applied to. The question becomes, are you a particular strategy trader, or are you a particular market trader? If you must trade this one strategy, then by all means look for a market that fits the strategy, but also make sure your method is fully defined for all possibilities and has a profitable expectation. If you must trade the ES, then develop a technique that at very least takes into account or better yet, exploits the market's natural tendencies.
     
    #24     Mar 24, 2004
  5. Here is another realtime example that ended up resuming into the prior 15 minute trend. I ended up getting relong on the break of the high of the day.

    Using this as an example. I reversed my long and sidelined as bar2 did not close lower than bar 1. I was debating on getting long at the low of the prior 15 min bars low for a possible resumption of the long trend. It would have really paid off in this example.
     
    #25     Mar 24, 2004
  6. Thanks for the reply. I think what I may need now is what you explain as C). Lots of alternatives, just need too focus and figure out which one will work best for me.
     
    #26     Mar 24, 2004
  7. ...I use E-Signal (www.esignal.com) for charting and backtesting. However, TradeStation (www.tradestation.com) is probably the more popular tool. The learning curve is steep (be prepared to invest 6-12 months at it), but once you get proficient at coding price patterns it's relatively easy to test a new idea which occurs to you. The advantage is that you will know for certain what doesn't work on the issue you trade. This may lead you to a discovery of what does work. The pattern you mentioned is not simple code, but fortunately what works IS simple code. The real difficulty lies in having the patience day in and day out to ferret out the peculiar and often paradoxical patterns which work. Thinking about what has to happen to make US wrong and THEM right helps.
     
    #27     Mar 24, 2004
  8. Keep writing out your method until you can fit it on an index card, or at least each entry rule on a separate card. Once you can explain it to a 6th grader, go ahead and manually backtest it on bar data, keeping track of entry/exit and P&L, and making note of how it can be improved. You will start getting a bunch of new ideas at this point to make the approach into a more comprehensive system.
     
    #28     Mar 24, 2004
  9. ...Nwbprob, a hot tip: go look at TriPack's current thread and think through the system which sells into the retrace he's waiting to buy. That makes money, too. That's how ya gotta think.
     
    #29     Mar 24, 2004
  10. genejef

    genejef

    Hi, nwbprop

    I think you will be successful trading EURODOLLARS first of all, than T-NOTES. Paper trade and see.
    Avoid E-mini S&P 500.
    EURODOLLARS presents the biggest volume in the futures markets (easy to go in and out), much higher than S&P 500, but many traders are not informed.

    If you like E-Minies, try Dow(CBOT). See also www.cbot.com. Click EDUCATION, than WEBINARS (a lot of FREE online seminars),select a seminar, click VIEW RECORDING. You can see a seminar as many times you want. Take notes, than paper trade.

    Have a good trading.
     
    #30     Mar 24, 2004