Good morning. (Or whatever, depending on time zone.) The reason I have been getting into a precise definition of price trend following and a put-up-or-shut-up real time proof is that the weight of the success of a few traders using a given system is merely anecdotal compared to the 19 out of 20 who go bust supposedly because they couldn't find or use the same system.
The burden of proof is on you, not me. You made an assertion, I called you on it, and now it's up to you to back up your assertion with facts. I'll be very interested to hear your evidence that the 50/200 DMA Crossover system is overfit. M
Here is a simple work up for d for experts. You will find that it is a relative measure for any market. I did it in steps for you. 1. Look at the prior market. This is the past. calculate H-L for the day. As a practical matter you can "see" it if you are monitoring the market and annotating. You are not so calculate it. 2. Multiply the result by something (this is a coefficient in maths language). In ET the normal multiplier is 1/(H-L) simply because the average long term daily return in ET is 1 point. For any normal day (meaning two trends in the morning a lull miday and two trends in the pm) the asymptote of the the coefficienct 3. For trending days use 2 or so. 3. Finally, take into account your trading method. This is stated as a simple measure. Mine and Profligic's vary by a factor of two, for example. Simply use the number of trades you average per day. You leave trades prematurely it turns out so your d result is rather large compared to your average profit per trade. Divide the result of 2 by this number. 4. Put your risk averstion into the formula last. for dummies use 0.5 (you will find using a calculated number that you personnally get less than this). Don't worry it is only your reality if you allow yourself to get this far. Make a ratio of the minutes you are in the market as the numerator and use the full market open period minus 20 minutes as the initial denominator. use this value if you are an expert. If you are an intermediate lessen the denominator by the midday period where the volume is in DU. If you are a beginner make the denominator a sum of the periods where the MACD (5, 13, 6) is above 85 and and when it is below 25. Use the determined value to finalize the answer you got in 3. Multiply the three answer by this decimal fraction. Over time if you get over your very persitant fears of trading, you will see that each time you improve it is a consequence of one of these four matters. As did Benjiman Franklin with regard to virtues, spend a week on one of these and then rotate to the next. Every month you will improve a little in four ways. Obviously, you have no idea of what is behind any of these things as you have told us. It is not possible for you to think about these four topics as yet. If you want to pick a regular proactive creative poster, I will give you my view of her/him if you wish. You, so far, are what is called a non starter. Doing this will be a very risky thing for you; skipping it is probably your best bet. If you do anything, try to begin to observe others. If you find you are able to sustain any type of observation for any period of time, you will notice that you are less stupid and harsh. So far you are consistently shutdown mentally.
I relented in one of the steps. In this thread there are definitely two streams running. Personnally, I only focus on the micro since it is unconstrained compared to the big money problems of the marcro crowd. The d thing is very very unimportant but being able to trade knowledgeably most of the time during market hours is very important. It turns out each market has three basic d's. Historically, I termed them as rockets, icebergs and slaloming. The transition from buying and selling to holding and reversing depends upon: what's there; whats available; how much time is involved and effectiveness (risk management). This thread is kinda corny because of the AGM's being used.
A couple of specific questions: 1. How many traders do you estimate are using this method? 2. Are you ready to take the real time trading call challenge? General point of clarification: Any system of directional trading must be capable of determining a sufficiently large (positive or negative) d, which is the difference between present price and a price to be marketable in the near future. The value of d is generated by the system in real time, and then the trader decides whether or not that d is of sufficient size to warrant a trade. If a system is incapable of generating a large enough d, or if it gives a wrong d too often, the system is bogus. (Warning: The challenge question is posted again below to clear up some apparent confusion. Anyone who is offended by this material should avert their eyes and scroll past it or direct their browser elsewhere.) What is a reliable method that can be applied to past price action to determine a usefully large positive or negative number d such that (p1-p0)>=d, where p0 is the current market price and p1 will be a marketable price in the near future? I'm looking for an answer to be posted here in plain text form. The proof of the answer is also to be posted here, as real time trading calls that specify on what basis the proposed method is being invoked and a target price.
set you brackets up before 2:08 market time. A greenspan is 150 points on the DJ. This is a nominal d for the first BO. There will be three trends (two reversals and then price goes asymptotic (a horizontal line) to the price before the initial BO you bracketed. Since the bars are sort of long and messy don't bracket too tight. If you stay in from before the BO you wind up with an approximate wash by 3:15. Nickel just watch for today. Type up what I said that is wrong.
Slippage and commisions were included, commisions we $30 a roundturn, more than anyone should pay and slippage increased as the # of contracts traded did. This was an extremely conservative number too. I don't know why there is still an argument The number of trades was 1059 with a profit of $18,000,000 so d= $16,997 and this includes commisions and slippage. Therefore using a simple MA cross over (ie going with the trend) across many markets will provide nickel scapler with the edge he is looking for. A positive D. I am basically giving you a reliable system that anyone can trade and no one seems to realize it. Now please tell me how I didn't answer your question Scapler. 5yr