ES Journal Archive (2006 - 2008)

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Quote from Anekdoten:

Mins,

I'm sure Apex has his own version of what is considered "confirmation".

Anek
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Lol im sure he does, and i have mine. I have many reasons and parameters for even attempting a counter-trend each time. I have back-tested these methods and things generally hold up well.

I have found the disciplined waiting for the entry to be the hardest part but also the most rewarding. I never chase a trade as these are generally the biggest loser trades, it is better to miss the move than enter without favourable risk-reward.

If you just enter on each and every confluence zone then that is just purely random imo.
 
I personally am not here to impose my system on anyone as it is not for sale or gift........counter trend trading is the least favorable approach of all ...what's the point... ....IF apex does that randomly he will go home broke in the end...I don't believe he does and it is irrelevant what others do...each will pay the penalty or reap the reward....newbies soon learn the quagmire deepens quickly if they are in a hurry...Anek is the one here who is talking experience on the money.....taking the zero starting point of new run is not counter trend but early entry point of new run..and it can't be consistently done ..but close is good, but still not necessary.....moves will never get away from you once you spend the hours required....actually years..many years...next the counter trenders say, there is no such thing as a trend....when i see that I hit the ignore button......by the by, there is a way to determine the higher probabilty counter trades just not going to take you to the glory land, only with the trend can that happen....best wishes
 
the problem with stating that the counter trend is done over and over failing but then bingo, you have the big one is clearly saying I can't identify the big one at it's inception so I must take many losses if necessary to get to the homerun because I can't see the homerun until it is too late for me to enter and grab the gold.......here is fact you won't accept....a trader must have a good system that will filter the fakers and identify the real deal and give the entry points and stop points...that are proven to be one heckuva lot higher than 50%....otherwise you have no edge...no edge keep your money please...very few have the psyche to accept high loss rate...if u r happy with losing a lot and making a very limited net, then that is great..and broker loves those guys a lot.
 
Quote from brotherben:

the problem with stating that the counter trend is done over and over failing but then bingo, you have the big one is clearly saying I can't identify the big one at it's inception so I must take many losses if necessary to get to the homerun because I can't see the homerun until it is too late for me to enter and grab the gold.......here is fact you won't accept....a trader must have a good system that will filter the fakers and identify the real deal and give the entry points and stop points...that are proven to be one heckuva lot higher than 50%....otherwise you have no edge...no edge keep your money please...very few have the psyche to accept high loss rate...if u r happy with losing a lot and making a very limited net, then that is great..and broker loves those guys a lot.
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I do agree with what your saying but their are many ways to identify fakers and which ones are the real deal.

All i can do is go by my plan and my parameters, like i said i like to be a dynamic trader and that means i trade a number of different set-ups without being to rigid. This involves trend-following, scalping and counter-trading.

However, going over my PnL i found my counter trades were my most successful trades - like i said i only countertrade if i feel a high probability setup.

Again reading Paul Tudor Jones method, he identifies that he fishes for the bottom getting stopped out for very small losses before nailing the big one. This is not how i countertrade but obviously this method is working for him.

If i get stopped out of a counter trade by a tick or 2 i will only re-enter on the reversal bar - and like you pointed out, this no longer constitutes a counter-trade but a trend following trade.

I say each to their own strategy, as long as it is back-tested and provides me with an edge i feel comfortable taking counter-trades. Only time will tell if this proves to be the wrong trades to make.
 
Quote from apex82:

Thats a great comment and I thought I would elaborate a bit and share some of my trades. I have put together all my trades for the past 7 months on one of my 3 setups. This will not include outliers where I carry a portion of the trade for 10-20R which would add significant profits on top of the results. This is a plain jane system that I trade day in day out. The sample size is only 7 months but I have used it for over a year and backtested it over 10 years to have a good idea what it is capable of producing. You will notice the drawdown happened during the february sell off. Volatility exploded overnight and the system had a pretty hard time with it as I am sure a lot of other systems did as well. All results include commisions as well.

I just wanted to show how a 50% winning system can produce large profits due to an edge and proper R/R ratio. Notice the avg winner is about 3x the avg loser. If you added on compounding and some of the 20r winners...... the equity curve would be off the chart. I hope this sheds some light on how tight stops and large winners can produce huge returns while keeping a trader confident and humble.
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This is from Apex regarding the 50% winning system. I think we can all agree that this guy is a very good trader and has proven this fact many many times.
 
I did not specify that I talk and trade intraday emini's only....some do both....position is best according to many successful traders....best for most....intraday is very tricky stuff until one has the arms around it....intraday imho should be only what is happening right now on the screen and not what might happen even one bar ahead...the right now entry is based on much testing for highest probabilities......we can enter with much confidence believing what next bar almost has to do, but never knowing for sure...and I will say your comments are well in line with what I have experienced in the process....learning to identify the higher probability setups until I got to the system that id's for me...proven over many years...system must fit the individual personality and tolerances for risk loss etc...have a great one and good luck forever ...apex is certainly interesting and probably a good trader....
 
Quote from Anekdoten:

Counter trend trading is quite lucrative if you enter on a reversal confirmation but then again, when that happens it's no longer counter trend trading but trading with the "new" trend.

Without the confirmation is just prediction, what you really want is reaction.

Anek
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Just some quick replies to your post, which is cool:

1) reversal confirmation could be either on 1 minute or 10 minute charts, I would say a lot of the time picking tops/bottoms via 1 minute chart is more intuitive (if that's the right word as experience is essential), stops are way smaller than in relation to 10 minute chart's confirmation signals (on average) and most definetly there is no new trend present on 1 minute chart, most of the time I, personally, would just look for weakness (price levels unable to sustain and indicators moving in the opposite direction/divergences). On 1 minute chart it can happen within minutes (on DAX), when on 10 minute chart on average it would take a substantial amount of time longer. So basically, ImO confirmation is different on different time frames charts and on most occasions 1 minute chart does not show a new trend, it rather shows a possibility of it happening, being a speculator I like to trade using same old principle of buying lo and selling hi, small stops and potentially larger gains. I believe Apex has showed us with finesse just how lucrative countertrend trading can be.

2) As far as your second paragraph I am not in agreement with you entirely as ImO first part is correct, though the second statement is incorrect as ImO you need to position your entry very near top/bottom (after there's been confirmation no matter how brief) and await reaction as then you would be potentially doing the opposite ie profit taking when reaction emerges.

My 2c :)
 
buying high low ? what does that mean ? I cannot for the life of me understand why anyone wants to stack up losses to get at good one when good one is easily seen and entered, if one does the work required to develop such a system...non discretionary...no offense intended as you have some good comments, but losing often is not acceptable for me...losing seldom is better......losses are what drive 90% plus out of this business...they can't tolerate them and account can't either.....for most..imho
 
The whole countertrend versus trend debate has been done on ET ad nauseum. I see little point to it.

Is a trader who buys on low volume declines a few bars after a new high trading trend or countertrend? I would say both.

Is a trader who buys 10 day lows only on stocks trading above the 50 day moving average trading trend or countertrend? I would say both.

Even traders who buy new lows on high volume can technically call themselves trading with the trend, because they may well believe, as the old-time traders did, that they may be hopping aboard a brand new trend, even though they may be going against what most other traders would say is the current trend.

How many times on a daily basis does one see the ES trading at a new high on high volume, and then realize an hour later that that point was the actual beginning of the new downtrend? I am sure many here might disagree, but there is no real consensus as to what a trend actually is and when it actually begins. Is "trend" measured in time, or in price? Time AND price? If so, how much time, and what price?

A stock's uptrend might start at 40 and end at 70, but at what point along the line has the trend actually become a trend, and not just a reaction against a prior trend?

Some of you may remember the old Tootsie Pop animated commercials with the kid and the wise old owl? How many licks does it take to get the center of a Tootsie Pope? The world, the "answer" went, may never know?

Likewise, the same with "trend".
 
Quote from JSSPMK:

JAs far as your second paragraph I am not in agreement with you entirely as ImO first part is correct, though the second statement is incorrect as ImO you need to position your entry very near top/bottom (after there's been confirmation no matter how brief) and await reaction as then you would be potentially doing the opposite ie profit taking when reaction emerges.

My 2c :)
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There many ways to profitable trading and I'm sure many sub-ways within those ways so I could not possibly begin to argue between my preference and yours or the guy next to us.

Now, since there is a huge psychological factor in trading what works for me might not work for you and vice versa. For instance, I have a hard time going to bed with live positions which is why I don't do swing trading, whether is contrarian or with the trend.

The point is that there is no right way to trade except for the one that gives you peace of mind while allowing you to milk the market on a consistently basis. This makes it highly difficult for me to tell you what's better or worse unless the opinion is formulated for the kind of trader I am. It's akin to finding the woman of your dreams.

Personally I don't move a finger without multiple confirmation but again that's just me.

Anek
 
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