Anyone use my method?
- Thread starter no_pm_please
- Start date
What is a bit concerning about the strategy is that more than likely everyones data is going to be different.
Additionally if the data were identical, there is still a very strong likely hood the keltner channels and the adx readings will be off enough between platforms that the results could be very different.
In fact even I doubt the keltner channels are even using the same formulas.
are they based on atrs or moving averages, are they based sma or ema. Close of the bar or or moving with the bar.
backtesting with indicators on different platforms is very tricky and divergences are going to emphasize the differences.
Additionally if the data were identical, there is still a very strong likely hood the keltner channels and the adx readings will be off enough between platforms that the results could be very different.
In fact even I doubt the keltner channels are even using the same formulas.
are they based on atrs or moving averages, are they based sma or ema. Close of the bar or or moving with the bar.
backtesting with indicators on different platforms is very tricky and divergences are going to emphasize the differences.
Your testing confirms the weak points of this method. Thanks, and if you can backtest some intraday data and come back to us with some figures, that would be even more helpful.
But my understanding is that the method already has the solutions "built in", which is the money management and risk control. A system is not complete when it is lacking these later parts.
1. reduce the position size if stop is wider, don't enter when stop is too wide to your risk profile;
2. done trading for the day after the first stop out.
This is by far the most completed divergence trading plan I have found, I plan to watch it for a longer time. But even I decide to trade this, I will not trade it along. Simply adding confirmations from other strategies like support/resistance, fib # and multiple timeframes can increase its reliability.
The use of the keltner ban, the Parabolic stops and the ADX filter are all bright ideas. But a setup is just a setup, nothing more, nothing less. The same setup that looks good today can easily fail tomorrow. This is where the risk control and the money management come in and why they are so important to any trading plans.
Some people are concerned about the ADX above 30 level, which we all know LBR uses it to setup her "Holy Grail" trades. So far we have no prove how valid the filter is applying to the divergence trades. We need some smart ones provide backtest results. My guess is this divergence method can be a very good post "Holy Grail" setup, but we really need confirmations telling us that the trend is indeed weakening...
NPP...can you please tell me what you use for trading hours? Are they the standard hours (930 ET to 1600 ET) or the futures hours (520 ET to 1615 ET)?
thanx,
Dennis
thanx,
Dennis
Quote from version77:
NPP has not posted here in this thread or at ET since Dec 19, 2005. He is MIA for some reason...
Probably similar like reasons that ended his prior thread...
Personal problems that's not related to trading.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=60313&perpage=1&pagenumber=17
Hopefully, its more like a planned vacation from the markets than a personal problem.
I have one trader pal that doesn't trade (he travels a different country or location each year...ski trips) between Dec 25th - Jan 25th...maybe npp is doing something similar.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
thank you