Entry help

[bigspeculate]

My trading strategy is to apply a modified MA to a 4-tick range bar chart.

As the attached chart of ZS shows, the advantage of a range bar chart is that it can get you into a trend very early, as price crosses the MA.

A disadvantage is that price can linger at the MA, and trading every cross will kill you. There can be a lot of whipsaw.

Is there a way to filter out the whipsaw, without missing out on the cross that begins a trend? Or is some form of risk management the best way?

 

[bigspeculate]

No takers?

 

[Handle123]

Quote from bigspeculate:

My trading strategy is to apply a modified MA to a 4-tick range bar chart.

As the attached chart of ZS shows, the advantage of a range bar chart is that it can get you into a trend very early, as price crosses the MA.

A disadvantage is that price can linger at the MA, and trading every cross will kill you. There can be a lot of whipsaw.

Is there a way to filter out the whipsaw, without missing out on the cross that begins a trend? Or is some form of risk management the best way?

I will take it you are a younger trader. As an older trader, for me, getting to the party too early means a much lower winning percentage which is unacceptable. But when I was young in terms of experience, I too tried to get it at extremes and getting good at extremes took me many years. Some of the biggest problems of using "Range bars" is not knowing how long it is to next bar, you can have several bars occur in a blink of an eye which makes backtesting very inaccurate, and too short of a range makes for way too many false signals. There are a few ways to make this approach increase winning percentage higher, increase range amount or using two different timeframes, trading in direction of the trend in a larger timeframe, using the 4 range bar for entries. Using range bars are very similar to point in figure and unless used in ES congestive trading, always found the only consistent use of P&F was trendline breaks.

Many younger traders often are unaware of which markets that are congestive in nature and which are "running" markets, and each need different approaches to use. ES is congestive, there are spurts of trend followed by hours of chop, whereas Crude Oil is a running market and few hours of chop. For breakout trading, one wants a running/trending market, whereas in ES, breakouts can often be a losing effort. Some patterns/signals work better shorting than buying. But money management is the most important of any method, how you control the trade "after" you get in, and you will find after a while that a good entry is nice, but management of the trade is better.

 

[SnakeEYE]

The best entry point for you probably could be the point where you are able to get out at the breakeven in case when the price breaks through you entry point,since you are using a smaller timeframe and looking for an instant profit

Mas, in most cases,have a both side of story in this sense

 

[abattia]

Quote from Handle123:
... Many younger traders often are unaware of which markets that are congestive in nature and which are "running" markets, and each need different approaches to use. ES is congestive, there are spurts of trend followed by hours of chop, whereas Crude Oil is a running market and few hours of chop...

I'm interested in what gives an instrument its own specific character from a price action perspective (see http://www.elitetrader.com/vb/showthread.php?s=&threadid=215986 ).

In your view, Handle123, what is it that gives ES and Crude Oil these distict characters?

 

[RCG Trader]

Quote from bigspeculate:

My trading strategy is to apply a modified MA to a 4-tick range bar chart.

As the attached chart of ZS shows, the advantage of a range bar chart is that it can get you into a trend very early, as price crosses the MA.

A disadvantage is that price can linger at the MA, and trading every cross will kill you. There can be a lot of whipsaw.

Is there a way to filter out the whipsaw, without missing out on the cross that begins a trend? Or is some form of risk management the best way?

Yes, zoom out the first chart that shows no gaps. Now evaluate your signals.

 

[soonhwei]

using indicator/pattern to generate entry/exit signals, then add another layer of indicators/pattern/rules to filter out bad trades...hmm...sounds so familiar...like what i did few years back good luck dude

 

[bigspeculate]

Quote from soonhwei:

using indicator/pattern to generate entry/exit signals, then add another layer of indicators/pattern/rules to filter out bad trades...hmm...sounds so familiar...like what i did few years back good luck dude

What do you mean?