apply MACD on 10 years S&P, looks ugly, you was just lucky the single year...
ES Journal Archive (2006 - 2008)
- Thread starter Buy1Sell2
- Start date
- Status
indicators are more relliable on daily/weekly, but by trying to develop a mechanical system on the S&P you end up with the same crap, and the only way to see profits is a very complicated trademanagement with more contracts and a lot of multiple exits, adusting positionsize to volatility, filtering out with bonds and weekly charts and take fast profits too, not longer as ~ 4 weeks max. the 1 contract trader is doomed to fail...
I did a lot of work in trend/pullback, and yes ~ 80%Win are possible but not a 1 : 3 risk/reward
I did a lot of work in trend/pullback, and yes ~ 80%Win are possible but not a 1 : 3 risk/reward
chart..
...and a very last word to trendpullback, it`s invented and meant as scalping technique, look to L. Raschke, the person more or less making public this method..she has a mechanical "short skirt" system with ~ 66% win, claiming the discrete trades taken in her rooms are more ~90%, but this are relatively rare trades not occuring often and she risks ~3 points ES to take ~3 points ES, 1 : 1 risk/reward, and she says better NOT wait for a breakout of retracement Flag (or Indisignals...)you have to be faster. You need a lot of experience to take such trades and you need a good trademanagenent in moving your stop not to late and not to fast to breakeven..
For me I take entries in /at pullbacks if probs are high of a trendday with high volume/momentum, here you may have a 1 : 3 - 1 : 5 risk/reward if holding till MOC, but of course you need good skills to PREDICT/REALIZE a trendday and we all know that real trenddays occur ~ 2-3 times a month. If`s that what you are doing (@porgie) i agree with both high %win and high risk/reward, but you have to have very good skills to see trenddays and you ending with 2-4 trades/month. By trading more often or even every day a few times you are faced with both lower win% and low risk/reward >>> small targets and resulting the need for good fills....and excellent trademanagement...not too easy with one contract/size...
For me I take entries in /at pullbacks if probs are high of a trendday with high volume/momentum, here you may have a 1 : 3 - 1 : 5 risk/reward if holding till MOC, but of course you need good skills to PREDICT/REALIZE a trendday and we all know that real trenddays occur ~ 2-3 times a month. If`s that what you are doing (@porgie) i agree with both high %win and high risk/reward, but you have to have very good skills to see trenddays and you ending with 2-4 trades/month. By trading more often or even every day a few times you are faced with both lower win% and low risk/reward >>> small targets and resulting the need for good fills....and excellent trademanagement...not too easy with one contract/size...
veeerryy last word to pullback...
it`s a definitive sound principle, but the S&P is not the easiest to trade this (or any other method...
other markets are better trending...
here a trend/pullback on 26 years daily DAX, ~80% win, avgwin/avgloss = 1.38, no 1 : 3....
it`s a definitive sound principle, but the S&P is not the easiest to trade this (or any other method...
other markets are better trending...here a trend/pullback on 26 years daily DAX, ~80% win, avgwin/avgloss = 1.38, no 1 : 3....
all this(and every other...) strats work out good only cause the exits, if taking just the reversalsignals or any more simple exits or one lot/size only you are ending with a very volatile equity and deep drawdowns. That is a general situation for ANY System. At least 50% of your braintime should be invested in a sound and proofed exitstrategy, looking for entries most of the time is a oneway street to nowhere. Depending on the strat you also need multiple contracts/lots scaling in and out, in some strats not.
This are general trading issues, if trading ES intraday or oil on weekly...
end and out
This are general trading issues, if trading ES intraday or oil on weekly...
end and out
Quote from mechtrader41:
all this(and every other...) strats work out good only cause the exits, if taking just the reversalsignals or any more simple exits or one lot/size only you are ending with a very volatile equity and deep drawdowns. That is a general situation for ANY System. At least 50% of your braintime should be invested in a sound and proofed exitstrategy, looking for entries most of the time is a oneway street to nowhere. Depending on the strat you also need multiple contracts/lots scaling in and out, in some strats not.
This are general trading issues, if trading ES intraday or oil on weekly...
end and out
WHAT??? please clarify.
EDIT: Also, you keep posting charts with daily data and I, personally, get confused, as people on this thread are mostly day traders and analyse other time frame charts.
the myth about small stops.... some mean using small stops keep them out of trouble....wrong
Stopsize is an Var. depends on strat. and marketvolatility/action not on the personall feel well level.
Stops ALWAYS reduce the netprofit, by testing strats you soon find smaller stops reducing your netprofit down to 50% or more. In every Stop and reversal strat. stops make things worse always.
You can get broken by too small stops!
Small stops are not reducing drawdowns, you may have even larger drawdowns. So a hint using a stop of any size in the ES or YM is crap without definition of the exact strategy/entrypoint/target/timeframe. You can have a strategy needs 30-70 points YM or 3-7 points ES stop, cause you are pointing to a target in the same or higher area for this day, i never found any strat working good(or at all) with small stops regardless of market and timeframe...mostly everything under ~4 ATR is not working out good or at all, on 5 min YM this is ~25-30 points, on ES 2.5 -3 points...
Michael
Stopsize is an Var. depends on strat. and marketvolatility/action not on the personall feel well level.
Stops ALWAYS reduce the netprofit, by testing strats you soon find smaller stops reducing your netprofit down to 50% or more. In every Stop and reversal strat. stops make things worse always.
You can get broken by too small stops!
Small stops are not reducing drawdowns, you may have even larger drawdowns. So a hint using a stop of any size in the ES or YM is crap without definition of the exact strategy/entrypoint/target/timeframe. You can have a strategy needs 30-70 points YM or 3-7 points ES stop, cause you are pointing to a target in the same or higher area for this day, i never found any strat working good(or at all) with small stops regardless of market and timeframe...mostly everything under ~4 ATR is not working out good or at all, on 5 min YM this is ~25-30 points, on ES 2.5 -3 points...
Michael
My personal opinion based on my experience:
Small stops keep me OUT of trouble.
Stop size is NOT variable.
Stops NEVER reduce net profits, on the contrary they increase net profits.
The only way Iâm sure to NEVER go broke is by using small stops.
Small stops REDUCE my draw down to the minimum.
All this has been tested on over 1000 trades in the ES (2 years of daytrades).
Conclusion: never make the conclusion that the rules that apply to your system can be applied to every system.
Iâve learned not to say this works and that doesnât work, I say, most of the time, that it works well or not at all FOR MY SYSTEM.
Never think that you are the only one who knows everything. Each individual has its limitations, even the biggest genius.
Michael, for day traders speculating on the price of ES small stop (2-3 points) is extremely important. You say you were unable to find a system that would provide consistent results when using small stops, what if the systems tested lacked in the area of establishing the right time to enter into the trade? IMO entry and exit are 2 variables, though part of 1 strategy.
- Status