Trader28. If youre still around would like to know how you handled this crossover this morning. An entry in the 11:30 area seems reasonable to me in this situation but not before.
My entry was at 10:56 bar close or 748.70. I bailed at break-even after no movement for 10 minutes. I think if you re-read the posts from trader28 you will see that it is not really a programmable system. There are a ton of whipsaws that you must avoid to have any hope of being profitable. This works really well on a trend day and really poorly on a small range day. It has good entry parameters, but if you just use a 2 point target and a 2 point stop, then you need to hit about 60% to make any money (60%=$400-$50cm=$350 per 10 signals per contract). You can see that only doing 4 contracts and hitting 60% could make for a decent week. I look for a reason to take the entry. Most common are: 1) Is the Naz leading in the direction of the trade (today it was)? 2) Have we just gotten a signal off of a rejected pivot point on the ES? 3) Are we in a trend day and is the signal coming after a flag set-up? IF you just trade only when you get a positive answer to one of these 3 questions, I believe you can make some money. You can't program these questions into a computer, so programming this system will probably give you terrible results.
Hawthtrader, I have been paper trading this on and off for a couple of weeks on the YM. I'm finding it difficult to implement the rules in real time - alot of whipsaws. Maybe the YM is not the best vehicle for this method. Anyone else using the on theYM? C&S
\ Almost anything will work on days that trend. It is range days that I am interested in with this strategy and I think it will only work with ER2. Of course if the range is too small nothing will work but these days like the last few the ER2 seems to make swings big enough to trade if you can figure it out. chart and soul I trade the YM primarily and I agree it doesnt do too well with it.
Just had an entry at 750.10 and exited at 752.1. I'm not sure there is enough movement in the YM and ES to make much money. The ER moved $200.00 while the ES moved about $100. This is a very "quick hit" way to trade, so you probably need to adjust profit targets on the YM or ES to lower levels to compensate for the lower range of the bars.
You're right about lots of ways to have things work on trend days. LOL On smaller range days, I keep a very close eye on the PP's and R and S numbers and usually just trade off of those.
Well, the million dollar question is how to dynamically determine if its a trend day or a trading range day ? I look at some general guidelines. Such as 1. Dow within +/- .3% (i.e. -30 to +30) 2. Nasdaq within +/- .4% (i.e. -8 to +8) 3. NYSE Trin between .8 and 1.5 BTW, today, ER2 is having a nice uptrend since morning. Atleast 3-4 pts can be had till noon time.
You are correct. If we knew when a trend day was to occur, we'd all be rich. Determing a trend day has become less important over the past six months. Here's why. There haven't been very many trend days. I keep a 30 day moving average of the range of the ES. Going back to September 1st, there have only been 5 days out of 28 where the daily range was 30% greater than the 30 day average. The 30 day range is at its' lowest point in over 6 months. The good news is that at some point more volatility and range expansion should occur. I think you can still make some money using these parameters as entry points off of "flag" patterns alone.
The daily range may be small for last couple of days, but the trend persistence is there. I sort of compute trend persistence as net change for last N days divided by sum of ranges for last N days. The trend has been up since last 1 1/2 month but the daily range has been small. When the trend stops, then the daily range will expand. Look at the VIX and VXN for clue about trend being stopped and trading range starting.