AHG - Profitable Strategy for Struggling Traders

[billdobson1972]

what are the enry rules for the last entry.

1. do u enter on 3 rd bar or 2nd bar close. whats the target and stop for emini sp 500.

will be good to see if it works for s&p....

u did not have stchs on last charts so dont know how u entered trade...did u enter on 14.59 bar close

 

[Anekdoten]

Quote from billdobson1972:

what are the enry rules for the last entry.

1. do u enter on 3 rd bar or 2nd bar close. whats the target and stop for emini sp 500.

will be good to see if it works for s&p....

u did not have stchs on last charts so dont know how u entered trade...did u enter on 14.59 bar close

B,

The different alternatives for entry are discussed throughout the journal. In this case since it was just a simulation I basically estimated based on price action, not an exact simulation by any means.

However, it's a good exercise to do so without a single indicator, the results will surprise you. In fact, you must be able to do so without a single indicator as the key to the strategy is HH HL LL LH not some oscillator.

Of course you need to be realistic, when it reverses, it was a stop, don't cheat when doing so. The goal is to mimic the entries in real time. I used to do this countless times with multiple instruments, it definitely improves your skills on following price action and spotting the chop.

Anek

 

[thrunner]

Enjoying the helpful discussion so far. I wonder if switching to ES at this time would be much better than YM, considering the noise that just came into this game. Be careful out there everybody: http://futurepathtrading.com/content/view/362/69/

If you were trading the SPs on Wednesday, you probably noticed a marked chance in behavior re the "noise level". 10 ticks up, 10 ticks right back down, 10 ticks up, ten ticks down...., also, affectionately known as "noise". You probably also noticed a huge drop in the size of the bid/ask. All markets have their own footprints and the footprint in the SPs had definately changed mid week. It is pretty hard to keep things "mum" in this industry, so it did not take more then a few hours of networking around to learn that one of the largest firms specializing in algorithmic "black box" auto systems (market making), had taken a rather large hit the prior few days, and had turned off all their auto-trading systems. Another large firm specializing in the same game, claimed "technical difficulties" and had also shut off their auto trading systems. These type of systems add liquidity to the system and generally make up about 40% of the volume in the e minis. Some of the systems work in the manner that a floor specialist would - buying on bid, and selling out on offer 2-3 ticks higher, or shorting on offer, and covering on bid 2-3 ticks lower - constantly extracting dollars out of the spread between the bid ask.

 

[AlpineTrout]

Have you ever taken the time to determine what happens to price, once you've been stopped out? Maybe you'd be better off hitting the REVERSE button rather than the EXIT button.

After all, the market is telling you you're on the wrong side.

 

[Anekdoten]

Quote from thrunner:

Enjoying the helpful discussion so far. I wonder if switching to ES at this time would be much better than YM, considering the noise that just came into this game. Be careful out there everybody: http://futurepathtrading.com/content/view/362/69/

Thanks for the link. When the ES becomes jumpy the YM is definitely not in tranquility. In fact, in my studies I found the ES to be more "trendy". No conclusions yet, soon though...

Anek

 

[Anekdoten]

Quote from AlpineTrout:

Have you ever taken the time to determine what happens to price, once you've been stopped out? Maybe you'd be better off hitting the REVERSE button rather than the EXIT button.

After all, the market is telling you you're on the wrong side.

Alpine,

I have not done enough studies to determine that but if I had to take a wild guess I would say there are more chances of choppy action developing before a new trend. If the chances favor choppy action vs a complete reversal the chop could most probably chop your head off :eek:

Good question for a complete study though, point dully noted.

Anek

 

[Anekdoten]

Quote from Anekdoten:

Alpine,

point dully noted.

Duly, not dully, sorry about that


ES has been uptrending in a calmly fashion in afterhours. Watching carefully on 500 share bars. Little rest for tomorrow and off we go....

Anek

 

[Stealth Trader]

Quote from Anekdoten:

Alpine,

I have not done enough studies to determine that but if I had to take a wild guess I would say there are more chances of choppy action developing before a new trend. If the chances favor choppy action vs a complete reversal the chop could most probably chop your head off :eek:

Good question for a complete study though, point dully noted.

Anek

I have studied this in depth and your thoughts are correct. Reversing almost always ends up getting stopped out at a loss, as directional momentum is fading at that point. Best to wait until price shows you once again which way it wants to go before re-entering.

st

 

[Stealth Trader]

Quote from Anekdoten:

X,

Thanks.

Here is a screenshot of 10,000 volume bars for ES in Tradestation; I must say, not bad!

Look at that massive downtrend during the second half of the trading day. That was free money, free free free

Anek

If I may,

Anec, note tradestation does not build constant volume charts correctly. Search "constant volume charts/bars" here on ET for more information.

For you tick users, also note that Globex began aggregating tick data some time ago, so you are not looking at true tick by tick data any longer. You should ask yourself which of that data you are willing to omit from your chart when using fast tick settings and are reading OCHL on each bar as your set up for entry/exit.

For those who asked about my volume chart, I first began using constant volume when Ensign implemented it into their program. I would switch back to tick charts and then compare them to the CV charts. In the end, I decided on CV and re-trained my brain to read them. At that point I didn't truly understand why I liked CV better, I just knew the price action seemed clearer to me. It wasn't until I later came across a "Proflogic" thread here on ET and learned that he was the moving force behind these volume bars and the reasoning that the light bulb went off.

To everyone, in my opinion, if your charting program doesn't offer true constant volume bars, I would use one that did. To not use a tool that is available for no other reason that "my charting doesn't provide it" is not a professional mindset. If you have used them and decided they were not for you, that is another matter, but I fail to see how that could be using an open mind. In summary, tick data is no longer valid, time charts were your grandfathers charts (what does time have to do with price intraday?), range bars do not show true price action, HA distorts price and goes against the theory of using price action as your set ups. No suggestions , just something for you to ponder, and as always, your mileage may vary. Do your own homework!


st

 

[Stealth Trader]

Quote from Anekdoten:

When to exit is a loaded topic and perhaps merits an entire book.

For now I will give you the following suggestions.

- If long before last known resist area
- If short before last known support area
- If scaling out and trade happens to break out in your favor then watch the next time it makes a HH or a LL depending if you are short or long.
- HA bars help me determine VISUALLY in a quickly manner if I should trail my stop because momentum is there.

....and last but not least, learn to read momentum. This can be a powerful thing, when price is on fire and not looking back, there is no reason to leave the roller coaster, ride it until you see hesitation. Once again, price action, price has mood swings, behavior, characteristics, learn to read them. It's very valuable.

Hope it helps.

Anek

IMO, let price take you out; as long as price is making HH,HL, or vice versa, stay in the trade with stop placed slightly above the high bar of your entry swing H/L. At the next swing H/L place stop just above/below that swing and so on. The first conflicting swing is the exit. You will only get a slice out of the middle of the run with this method, but you will almost always catch those huge moves like we had Friday afternoon and get several good moves in between, depending on the range.

st