Day-Trading 2.0 for small traders

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Quote from Corey:

When I think of traders not applying the KISS paradigm, I think of them beginning with a simple trading algorithm that develops complexity due to their acknowledgment of less probable patterns -- adding layers of sub-rules to identify lower probability trades. Ignoring KISS is adding neural networks to a simple moving average system to identify a rare chart pattern. You would, most likely, be better off splitting these into two separate systems.

I find myself, however, looking at this specific rule as a more common rule: reversion to the mean. I find myself tossing the idea back and forth between splitting this into another system all its own, or using it as an equivalent rule within my primary system.

So my question was, did you find that this rule provided equivalently important signals to your overall design, or was it simply identifying low probability events that hindered the overall system performance?

All the best,
Corey
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Actually, I ran statistics so I would know if it passed a certain distance then it would have to back up.
 
Is this methodology more appropriate for the currencies?

I am attempting to apply it to the ES over a variety of time frames. The thrust and back fill nature of the indicies has proven very challenging to decipher.

Am I banging my head up against a wall with the ES? Is their an optimal market for this method?

Thanks in advance for your comments.
 
Quote from tnttrader:

Is this methodology more appropriate for the currencies?

I am attempting to apply it to the ES over a variety of time frames. The thrust and back fill nature of the indicies has proven very challenging to decipher.

Am I banging my head up against a wall with the ES? Is their an optimal market for this method?

Thanks in advance for your comments.
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Yeah I know.

It's a bitch and we all admit to it.

You might want to check out Corn or the Ten Year bonds (but they can have back and fill too).

In light of that what Corey is saying makes perfect sense to me, but I find that it's better to just keep hitting the trend and taking profits when they are given, trying to game the counter strategies leaves a lot of room for error and can get you in trouble.

GL
 
I've tested this methodology on charts ranging from 8t, 21t, 89t, 144t, 2500v, 1 min, and 5 min. I've attempted to stay closer to the faster time frames so I could keep a tighter stop. I only shoot for 16 ticks a day.

Which time frame have you found the best for incorporating risk with profit potential. I really don't like going for more on a trade than I risk.
 
Anek, Pkchilly, Corey

Thank you for your comments.

Again, I am going away this week. I still have some unfinished posts (risk, timeframes, psychology, gambling and some question sent by PM) that I will post when I come back, till then good trading and good luck.

jjrvat
 
Hello all
Just wanted to post another example of JJvrat method in work.
At the example attached, time trading GRMN at friday using a 6WMA crossover to enter,
anyway
13 trades 11 winners 2 losers 20-25 cent each trade.
Enjoy
 

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Hi amitman,

are u paper trading or are this actual trades.

are you presetting your orders with 20 cents tragets and 10 cents stoploss. is it a bracket order or a manual order.

I know that you also look at stoch crosses.

are you not using 25HMA anymore.

thanks
 
Hi,
the exaple i've brought is not a trade I've made since i don't trade in friday but generally I trade this method with real money and real trades.

the SL i put is usually above the last bar high/low (depends on the direction of the trade, of course) expcet when last bar is very narrow, in that case i take the stop a few cents away.
this usually brings me to a 1:1 R/R ratio , that, combined with the 75-85% precentage of success is profitable enough.
Notice that you might wnat to try to scale out of the trade and not put all your size out in your first target in order to improve you R/R ratio. this way you might get 2-3 trades of 80-100 cents per day. the bad side is that all on the other trades you'll be out with the second half at b/e or with a little profit, so in the end the result is about the same.

I usually enter the trade with a stop limit order and out with limit orders (expet for special cases when the stock is running in my direction when i might be out with market order to get a better price), these orders are manual.

As jjvrat mentioed it doesn't matter what you use to enter the trade (stoch cross, ma cross etc.) I'm currently testing some other entry to see what is best for me. but the results, in the long term are about the same.
one thing to notice though is that no matter what MA you use you should put it to be calculated upon (open+close+high+low)/4
this will give a much smoother lines and waves (espcially on the fats MA's like WMA6 or HMA12).
 
Hi amitman,

Just wondering what you mean by calculating the wma's "(open+close+high+low)/4"
I never knew you could manipulate the wma in such a way, but then, my broker may not have that capability (using OEC).

I use the 12wma and the 240wma on a 1 tick chart with both 6bh8 and 6jh8...

Anyway, thanks if you have any suggestions on how to manipulate wma's on my platform...maybe I just haven't figured it out yet...pk
 
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