Then you'd have to put up with intrabar signals, which can chew your profit away. Mechanical is less stressful but you don't learn that much either. I've backtested for: entry on bar close, fast line 80/20 slow line 70/30 exit on bar close, fast line 75/25 protective stop 2.5 pt. Traded between 9:30-12:00 and 2:00-4:00 pm to avoid DU. Tried a few variations but this one had the best results. Results: some months are good some are bad depending on mkt - trend or range. Overall not impressive, a lot of trades are losers because of late entry - entry earlier on the bar turns them into winners. Hope this helps.
"doc you using the whole fist?" -fletch that best describes today's trading for me. these are the kind of days that can just kill you trying to trade this method...unless you can recognize the chop factor. 1. rocket fail --->macd xo reversal 10:15 s(21.05, 20.18) macd hist -0.53 this doesn't setup on the next bar and 10:25 bar is an icreasing vol reversal bar was looking for macd xo/channel break. 10:30 macd xo and channel bo long at 876.50. 10:40, 10:45 vol decreases sig. and 10:50 bar exit @ 874.25. long @ 867.50 sell @ 874.25 -2.25 day: -2.25 14 days: 32.50 2. rocket 11:25 s(85.71, 78.36) macd hist 0.48 enter @ 878.25 held until 12:00 bar where macd xo, channel bo and stoch lkeaves zone. exit @ 877.25 long 878.25 sell @ 877.25 -1.00 day: -3.25 14 days: 31.50 3. short rocket 1:55 s(0.00, 18.73) macd hist -0.41 short on break lower @ 873.25...next bear is an icnreasing volume, bullish engulf exit when it's high is taken out 875.75....normally when we are so close to the low of day and the previous day's low i will wait for them to be broken, but on the down move vol was picking up and bars had nice price expansion...doh! short @ 873.25 cover @ 875.75 -2.50 day: -5.75 14 days: +29.75 at this point i was going to wait for the market to break the afternoon channel before entering any new trades....yeah wished i would have recognized that earlier. today was my worst point day trading so far. anyone have any thoughts on what clues there were to have a channel/chop that we experienced?
dawg, With the benefit of hindsight - and the admission that I had the same kind of day you did - the only hope was the 15-minute chart. A three day relatively tight range was the clue - one that just jumped off the screen as soon as the market closed on Friday
With all due respect, does it really make a lot of difference. If each trader is making money. One trading the market price action, the other trading the indicator. Seems to me that both are still trading the price action. Trading the indicator may be lagging the pure price action but is that really making less money in the long run? Maybe so, but maybe not. True enough, that when a stochastic hit's 100, that it doesn't mean that there is not plenty of dough to still be made on the long side, etc. Overbought often becomes more overbought and vice versa. I don't think that it's necessarily true that old traders point is being missed in each case here. While I respect old traders views, I can still keep myself out of trouble by keeping a check on the direction and slope of a stochastic. I can also use the stochastic to help me remain more confident in staying in a trade longer. (for instance: let's say that I enter short on a 5 min oscillation down and the 15 min stoch is also failling hard as well in conjuction with the 60 minute stoch falling hard - then I am more apt to sit through some 5 minute oscillations back to the upside) In this case, from a pure price action point of view = we can't get rid of this crap fast enough...... (sometimes the next day we can't buy it back fast enough......lol..) I often check the 60 minute and try to be aware that when I trade with it, that my odds of making larger gains are better. Consequently by trading against it intraday, that it would pay to use more caution, etc. Be it a crutch for deciphering price action or not. To me it's a good, quick, at glance indicator and it helps my bottom line. But with all due respect to you as well, vinigar, I'm not missing old traders point. I'm just disregarding to some degree
Thanks for posting. On page 97 there are 12 items that I have tried to cover so far. The list definitely leaves out the basis of the 12 items. So waht is the game plan underneath it all. What I have tried to do over the years is get people to a place where they can reason their way to developing an approach to make money. almost anyone can get into some groove for doing this. The consequence is that, over time almost any approach makes a lot of money simply because of how profits compound over time. The real deal is to be able to continually work at it with greater and greater performance success. You can take vorso's word for it when he suggests how trading makes more money if you do this or that. That iterative refinement viewpoint is what is called for. The challenge here is to get things in a proper perspective and then be able to prioritize. The highest priority is making money. Making it continually and with a greater money velocity as time passes. If you do something and it doesn't work as happened here. You must debrief yourself and find out why. You will either be right or wrong as to why it doesn't work. I will add a few charts for consideration after this post because I do not want the first chart or last chart to distort stuff. Going way back, I suggested that you first learn to make money when the time to do it is the easiest. So you make money and build capital that way. Concurrently while doing this first step, you actually learn a great deal about the other side of the coin. That side is the "walk carefully on the ice". When you are in the market, it is because you are walking carefully on the ice. You are not in the market saying "don't fall down on the ice". We are not always in the market. To say it in the best way, we sideline as a primary effort in making money. There is some conversation here about price and indicators. It is low grade compared to chatting about market variables, what they are and how you can enhance the signals of market variables singly and in combination by using indicators and use them as leading signals related to price. What is on the table for everyone is themselves and how they connect to making money using the market opportunity given to them. Price and volume vary with time. People and equities or contracts generate volume and price. How does a person generate three losses doing the same thing three times in a row. Mechanically. vorzo, correctly, in my opinion states that you make more money entering ASAP rather than at the close of the bar. You can bet he has looked where we are going to look in the next several posts I make here. There is no way any person at any level of expertise can improve by gueassing. You will notice that I recommend a viewpoint for each andeverything that goes on here and in 6 months you will look at this beginning as just a mild dose of what is what. We always need to focus on what is going on. That means "seeing" what you are seeing from where you are and NOT seeing what I see from where I am. To many people, Friday was a slow day. But that is said after Friday is over. To make money you need to know as the day unfolds peice by piece what is going on. For beginners, the two sides of the Coin are the making money side and the sideline side. Let us begin from this vantage point.
The day begins. It is Friday. Learn that Friday and then Monday are days related to weekends. Holding capital in the market on a weekend is something significant. Holding money overnight in commodities futures indexes has a ratio of about 2:1 for margin required. This is a measure of risk. It is not wise to keep money at risk and out of your control. the day begins. We have have a thursday that was ........ For synch we see a gap (5 points) a "chop": retrace down, retrace up ,retrace down (all within 5 to 7 points). As synch occurs it is defintely like yesterday (Thursday). So we see that the prior channel is done (last trend on Thurday. We need to set points 1,2,3 (See DKM's chart for these points on page 98). As beginners we do item 6 of the list of 12. Why? To get a perspective. By 10:17 we have establiched that we haven't gotten off the ground no matter what skill level we have. So we take a glance at the 1 min chart. I do not want to go there unnecessarily and actually on the other hand I want to think about what "tape" is running on what bar duration (fractal). These two items can be done quickly. You see the chart on the 1 min attached and the "tape" is a bar on the 30 min. These charts send you back to the 5 min. with the following feeling: ugh. Making money is not looming as the greatest "now" orientation. The othr side of the coin, sidelining, looks kind of practical because getting the points 1,2,3 isn't working out for us. As an expert, you would say to yourself: "hey it looks like I need to camp on the MACD of 1 min and just slalom." At 10:17 the MACD is giving a "short" third signal to you. Two priors already.
You can keep things under control by keeping the scale working for you at all times. We use a 10 point scale for making money at the beginning. If you go to the 1 min fractal it is to check out the situation more thoroughly and get a confirmation of what is up on the 5 min, or for Friday am, the 30 min "Tape". In "How to Lie With Statistics" among the ten chapters you will find one "The GEE Wizz graph". (Huff) We all trae on gee wizz graphs anyway but you can learn from this. Many people cannot stay in trades. Many people are deeply deeply affected by something they view at the moment and to the exclusion of seeing loads of other things they could be perusing. So I an corraling you into objectivity everyway I can. Some how you have to stay away from the gee wizz stuff and stay well enough oriented to take on trades and stick with them to their conclusion. So Friday started off with not even a chance of a point 1,2,3 trend lines channel being set up. It was "chop" on a gap. when you see three days back on the "tape" (30 min) you get a perspective. Experts are slaloming and beginners are doing whipsaw. dkm demonstrated this quite well. Three consecutive "mechnical" screw ups is par for a beginner. I have a record personally of four in 20 min on DJXX (before minis). What I did was very funny to my observer. And he got to see me pick off the BO after centering as well (A sane bracket entry, since I had thoroughly scoped out the scalping.) The comments of those here are helpful vis a vis the three screwups. The market was a sideline market. One error three times. Why did DKM stop doing the trades? Well I believe he determined something was wrong. In a dichotomous key, of several levels just using typical inquiry he can get to the answer, perhaps. we all nee to have debriefing approaches. A good way is to have about 10 key questions which when answered get you to the place where the problem is. So far the conclusion is, to go against vorzo's view and trade at the end of 5 min bars. This as the chart shows continues the losses. So that may not be a good conclusion. One strong conclusion may be to go into markets when there are no flaws. What can help is having the 5 and 1 min charts be working together. There is chat on that as a backtest possibility. It is also a good idea to, without fail, line up the open properly. If you have a trend continuation that is well and good. If you have price movement beyond congestion levels that helps too. Think about everyday. There is a H/L range. You can be picky to make, points evryday. The coin works. One one side you make money in fast strong trends only and on the other hand you stay sidelined. Practicing wash trades is going to be a challenge. I admire those who have been posting and that about half their trades are successful wash trades. Thanks again for making the post dkm.
Jack, âMany people are deeply deeply affected by something they view at the moment and to the exclusion of seeing loads of other things they could be perusing.â Guilty as charged, Big Time! Iâm trying hard to raise my awareness. From your comments if I may ask a couple questions here: âAs synch occurs it is definitely like yesterday (Thursday).â Does sync occur when cash and futures are moving in tandem with approximately the same average spread between the two as exhibited throughout the previous day? If so, in reviewing the charts a)Thursday cash/futs started to move in tandem at approximately 9:37am and b)Friday cash/futs started to move in tandem at approximately 9:35am. Is this correct ? If so, is this what you are referring to from above context? âSo we take a glance at the 1 min chartâ¦â¦.. think about what "tape" is running on what bar duration (fractal)â A tape is a portion of a price bar chart that has no white space. That is to say, the width of the tape is filled with the high and lows of the price bars. Is this correct? Yet it seems as if you are determining tape by viewing the 1 minute chart only, of which the tape is a single bar on the 30 minute. What on the 1 minute chart tells you this? Periodicity of an indicator? time period between peak and trough of something or other? âAt 10:17 the MACD is giving a "short" third signal to youâ Is that because the 1 minute macd is entwining below neutral? (Trying to get on the same page as everyone here, thanx in advance)
If anyone would like to discuss this in real time, we can use the chat room at http://groups.msn.com/ShortTermStockTrading/chat.msnw David