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3PB trading strategy
- Thread starter Marko
- Start date
Marko:
This strategy doesnt work as far as I have tested. I tried to mechanize it and the backtest it using 5 min charts results shows no improvement over other systems I have thrashed. RAL Lockhart (guy who exposes this technique) says that it can be mechanized, but I my testing results tells me a different story.
I programmed the 3PB charting strategy into Tradestation 2000i (took me 3 days) by following its rules and using a trial version of Ravenquote to cross verify my indicator. After that, I tried various position sizing strategies with the 3PB signal and what I found is that it had huge losses at times. The reason is that 3PB only uses the close to determine if a price break has triggered or not. So using the 3PB you cannot put in a meaningful stop since a stock can have wild ranges in intraday bars.
3PB seems very delightful, but in reality it is supressing a lot of high-low prices that otherwise will make you scare away from a trade and take a loss. All of these japanesse charting techniques work the same way e.g. renko, kagi & 3PB suffer from these same flaws.
What I am right now behind is to see if there is a way to mechanize a Point & Figure intraday daytrading system. Since Point & Figure pattern can be easily programmed in to a computer for it to search over 100's of stocks intraday and come up with a list of stocks exhibiting the best P&F patterns. But P&F still suffers from the same flaws of these japanesse charting techniques.
hsanson
This strategy doesnt work as far as I have tested. I tried to mechanize it and the backtest it using 5 min charts results shows no improvement over other systems I have thrashed. RAL Lockhart (guy who exposes this technique) says that it can be mechanized, but I my testing results tells me a different story.
I programmed the 3PB charting strategy into Tradestation 2000i (took me 3 days) by following its rules and using a trial version of Ravenquote to cross verify my indicator. After that, I tried various position sizing strategies with the 3PB signal and what I found is that it had huge losses at times. The reason is that 3PB only uses the close to determine if a price break has triggered or not. So using the 3PB you cannot put in a meaningful stop since a stock can have wild ranges in intraday bars.
3PB seems very delightful, but in reality it is supressing a lot of high-low prices that otherwise will make you scare away from a trade and take a loss. All of these japanesse charting techniques work the same way e.g. renko, kagi & 3PB suffer from these same flaws.
What I am right now behind is to see if there is a way to mechanize a Point & Figure intraday daytrading system. Since Point & Figure pattern can be easily programmed in to a computer for it to search over 100's of stocks intraday and come up with a list of stocks exhibiting the best P&F patterns. But P&F still suffers from the same flaws of these japanesse charting techniques.
hsanson
Thank you for your reply.
For me this method seemed to be very attractive because of the mechanical handling with straight rules. But I think it´s only working in real trending markets.
I never worked with Tradestation 2000i. I´m beginning to understand why it´s so popular. Can you really profit in such a heavy way from using it?
Marko
For me this method seemed to be very attractive because of the mechanical handling with straight rules. But I think it´s only working in real trending markets.
I never worked with Tradestation 2000i. I´m beginning to understand why it´s so popular. Can you really profit in such a heavy way from using it?
Marko
Marko,
With regards to TradeStation, the software itself will not make you any more profits. Many people think having a fancy software program will suddenly make them good traders because it will tell them how to trade. If the person is a bad trader, it only accelerates the speed at which they are removed from the game.
The value of TS is in its ability to quickly test new ideas (like hsanson is doing) that you might have and scan for those setups if you choose to trade that idea. Most add on systems sold for TS are garbage and have been overoptimized to past data. Many new traders fall for this scam because it appeals to our basic human desire to get rich quick.
TS is a great program when used properly, but beware of the false hope of creating the Holy Grail, as it doesn't exist. If that is the goal in buying TS, then save the two grand for a nice vacation, you'll get more out of it.
Kirk
With regards to TradeStation, the software itself will not make you any more profits. Many people think having a fancy software program will suddenly make them good traders because it will tell them how to trade. If the person is a bad trader, it only accelerates the speed at which they are removed from the game.
The value of TS is in its ability to quickly test new ideas (like hsanson is doing) that you might have and scan for those setups if you choose to trade that idea. Most add on systems sold for TS are garbage and have been overoptimized to past data. Many new traders fall for this scam because it appeals to our basic human desire to get rich quick.
TS is a great program when used properly, but beware of the false hope of creating the Holy Grail, as it doesn't exist. If that is the goal in buying TS, then save the two grand for a nice vacation, you'll get more out of it.
Kirk