Well, it's Sunday morning and I was thinking about an idea. Try this on the ES: Start your first trade on the open 8:30cst. You could stop trading when your profit or loss is 5 or 10 points on the day...or at 15:00cst using the last 15 min between 15:00cst and 15:15cst to close out your open trade. Pick a side based on the previous RTH session. If it was a green bar start the open short for a 1 pt target with a 1.25 pt stop. If the previous RTH session was a red bar bar start the open with a long for a 1pt. target with a 1.25 stop. We do not stop here.....continue and try this: If your opening trade is wrong and you stop out....use a reversal stop (double contracts) and get the opposite direction with the execution of the stop. This time add 1 tick to the target and the stop. Keep repeating this with reversing and adding 1 tick on the target and the stop each time, until you find the side to be on. This is used throughout the day and is a perpetual rule used on the losing trades until you get on track and find the side to be on. If your opening trade was correct exit with your profit of 1 point and re-enter with a repeat of the opening trade bracket. Throughout the day this is a perpetual rule and if you get a winner use this rule. Now if you are totally confused by now..... Keep in mind this is an "always in" system calibrating to the chop with increasing brackets and risk, or following the trend with incremental profit taking and a trailing adjusting bracket. This is a perpetual restarting system and does not necessarily indicate progressively wider and wider brackets. Also it could be incorporated to any entry time and not dependant on entering at the open or the instrument used. This methodology could be adjusted to any instrument and would be considered not a trend following methodology but more accurately a "TREND FINDING" methodology. Actually you could enter in any direction and at any time. One could optimize this with indicators and MAE and MFE statistical observations. It will search for a side at your expense and could achieve a net profit at the end of the day or a huge loss. It's success is based on your size of brackets compared to the chop frequency of your chosen instrument....in this case the ES. Can anybody backtest this on a tick periodicity? The size of the Bracket is open for discussion/opinion. Also opinions about this canned method of scalping are welcome too. Michael B.
Also one of these freelance programs that are used with the IB trading platform could be useful. Michael B.
...I tested the contra opening strategy you suggest just yesterday for NQ and it has positive but modest expectancy over the long haul. However, the equity curve has gone negative three times in the last 60 days (it oscillates). I did not attempt to optimize it with stops, takes, and reverses. Testing of this strategy as a position for the entire day shows it doesn't reliably put you in the right direction for the whole day. But that entry works in runs of days duration, so maybe you could monitor the equity curve for a directional decision on any given day. As for the rest, haven't a clue. Never tried anything like that. It's essentially an anti-Martingale if I understand you correctly. I believe Kaufman addressed it in Trading Systems and Methods. If you like a reversing system, you might take Eddie Toppel's course where he reveals four of them. I took it just to meet him (fabulous guy) because I love his book, and learned a lot from him and his attendees. Best regards. - Mike P.S. - I will never tell if something works. Only if it doesn't (haha)!
Here test this for the contra opening on the ES: Use the upside down ratio of 1 point target to a 4.75 point stop. Or try this: Go for a 1 point target with a 15 min time stop. Michael B.
...you'll have to walk me through it. Is this it? short ES if the previous day was up take 1 point profit if offered stop at loss relative to entry point of 4.75 points (or alternatively hold no matter what for 15 minutes unless you get a point)
There is no pyramiding or bet sizing used here in this thread. I remember reading about an anti-martingale strategy which was used in the Ryan Jones book named "The Trading Game". When hearing about anti-martingale I think about money mangement and bet sizing not trade management. Perhaps my opening post confused some with the reversing resting order. Michael B.
you got it.....but not the complete system...Refer to the opening post....I am building out from the contra-open system. Michael B.
The only reason for taking profits or reversing is to get a bracket adjustment, in a fast moving instrument. Also it uses price action to find a side and take out profit. Michael B.
Keep an open mind here folks.....the size of the brackets are open for discussion. This is just a way to "can" an "always in" scaping methodology which may or may not be possible. Can you see the brackets around your entry and their adjustments are key to fine-tuning this system....there are probably better parameters to use...I just do not have the time. I am not scared to share what I have discovered with other traders.....use it....make money if it works...I will congratulate you. If someone wants to share and give a little back...then great. Michael B.