Jack, Your unique style is what sets you apart from the crowd. Thank you for the complete answer. Now....backtesters....read this last post by Jack and put that into your script.....no way! Michael B.
The above post which is for advanced folks is based on how a person gets to KISS. At first (beginner) it is extremely important to stay out except when money velocity is high and also to leave before the market goes flat (congestion). what happens to a person who gets used to making money and watch from the sidelines when no money can be made easily, is that the person experiences "building wealth". The continuing rate of building becomes apparent to the person and it is in the 90,000 a year range. Two factors contribute to this: steady building at a low rate and going to 2 contracts or 3 with the margin available. I advocate doing it the hard way with one contract as long as possible. It becomes difficult when the idle new capital is continuing to steadily grow larger. As all the initial capital is removed, the aspect of not being able to be a loser becomes significant. Capital still builds. There is a point like the one the above poster raises. He "sees" the relationship of things now. This stuff is not consciously encountered as long as a person is in a place where he has not encountered building wealth continually. Mot back testers are not able to consciously deal with iteratively improving the substantive aspect of their repertoire. Nothing is ever going to change about the fundamentals of market operations. This is because markets are based on human behavior. People do, however, mature and they take different places in the spectrum of market participants. Here is what is afoot. We need to progress as individuals through a series of market roles that lead to excellence. The faster way to do this is without any significant failures along the way to impede growth. Thus by hammering away in almost flat markets, how to stay out, then how to optimize on rockets, then to taking money out sufficiently that we only trade profits, we get to the place where we consciously use the same identical market basis to optimize making money. We can ID rockets with 14,1,3, We can smooth with a 2 in the middle. We can catch shifts by using the first number made smaller 10 then 5. We can go from relative to absolute by shifting from Stoc to MACD. By starting from the beginning using pairs of fractals and seeing how to anticipate, we also catch on to the idea that the defaults on indicators are transferable to different fractals as we look into market fundamental operation on differing levels. I have not yet pushed any buttons regarding picking up slower fractals for longer term analysis because this is intraday trading. Later maybe. we are out ahead on about six next levels of backtesting to see how adding to our model enhances it's performance. We are not in a mode where we change the model. We will just add to it to make it comprehense so we can be in the market as a goal well after we have learned to stay out of the market. this post is a keeper.
I have to admit, I'm really lost with the 1 min. chart stuff. What exactly do we do with a 1 min. chart? Also, do we use the same stoch. and MACD settings on the 1 min. chart? I'm not talking about the advanced trading yet. Just trading "rockets" with the stochastics and MACD histogram readings +/- .4 on a 5 min. chart. So say I add a 1 min. chart, do I add those same settings to it? Then what?
duplicate your 5m chart but change it to 1m then pair them side by side. When you trade on 5m stoc keep track of what 1m stoc is doing, when they are in harmony green light is on I think.
Figured I'd give this a shot today. Anyone else get killed? None of the entries or exits were due to emotions. I followed all trades as I thought I was supposed to. I am NOT saying I traded exactly how Jack would, however, I traded my understanding of Jack's rocket trades. Instead of rockets, I ended up with a bunch of disasters on the launch pad. I'm done for the day. I just don't know if there's any hope for me..
set up the charts like jack suggested and don't forget the scaling... don't use autoscale in esignal it gives you the wrong impression about the volatility in the current market. and one more suggestion is not to think of it as a mechanical system... use it as a clear method and execute the trades like the method suggests but between trades and while trades look closely to the price action, macd, and the shorter stoch.
What would the scaling have to do with anything? I made 2 esignal formulas to color code the bars based on stochastics and MACD histogram values. When both stochastic lines are above 75, the bar is green. When both lines are below 25, the bar is red. Otherwise, the bar is yellow. For the MACD histogram, if the value is >= .4, the histogram bar is green. If the value is <= -.4, the bar is red. Otherwise, the bar is yellow. Can anyone tell me they made money today doing this?! Look at my chart, it doesn't lie.
...boy, I could use a "rocket". 09:50 Short @822.50 09:53 Out @821 A stupid mistake saved my day! Affraid of 10:00 Reports, I bailed at 9:58 - only it was really 9:53. 02:25 Short @819.75 02:20 Out @820.75 I am sure that I did everything right - I think. Trades I did not take: Long at 10:40 - too extended, and a non-confirming 1M MACD Long at 01:55 - Non-confirming 1M MACD Long at 02:55 - Non-confirming 1M MACD Bottom line: Plus 1/2 on the day - Plus 4 3/4 on the week.