Volume is usually less but if price is not completely away from moving averages, higher highs/higher lows, lower lows/lower highs and touching aves this to me is chop and then look for breakouts to resume trend trading, most traders use 18-21 moving averages, so times of the orders just piling on forces market to go one direction, but if it lingers three bars, I seek to take a tick profit.
ES Journal | Divergence918
- Thread starter Iwilldoit
- Start date
Volume is usually less but if price is not completely away from moving averages, higher highs/higher lows, lower lows/lower highs and touching aves this to me is chop and then look for breakouts to resume trend trading, most traders use 18-21 moving averages, so times of the orders just piling on forces market to go one direction, but if it lingers three bars, I seek to take a tick profit.
TRADE ONE: LONG/ LOSS/ BLD/30/12H00
So on the 30 I see the stochs crossover to signal Bull Divergence
→ I wait for divergence to confirm on the 30min chart not before the candle closes
12h14 I set my limit order to 26.5, TARGET= 28.5, INITIAL STOP = 25.5
EXECUTION
As soon as I was filled at 26.5, price retraced
IN TRADE PERFORMANCE
Price just retraced and it was red candles all the way down to my stop
EXIT
Got stopped out at 25.5
WHAT I LEARNT
I wonder how this would of played out in a real live "money" trade?
@Handle123 @Redneck
@NoDoji @Buy1Sell2 @aquarian1
@Gueco @pak @slugar @zbestoch @dratsum
So on the 30 I see the stochs crossover to signal Bull Divergence
→ I wait for divergence to confirm on the 30min chart not before the candle closes
12h14 I set my limit order to 26.5, TARGET= 28.5, INITIAL STOP = 25.5
EXECUTION
As soon as I was filled at 26.5, price retraced
IN TRADE PERFORMANCE
Price just retraced and it was red candles all the way down to my stop
EXIT
Got stopped out at 25.5
WHAT I LEARNT
- Nothing really → just its psychologically easier to have a losing trade in SIM → wondering whether I could do this with a real money trade
I wonder how this would of played out in a real live "money" trade?
@Handle123 @Redneck
@NoDoji @Buy1Sell2 @aquarian1
@Gueco @pak @slugar @zbestoch @dratsum
Well, I have targets of 8-9 ticks. In my youth, when full contract in 1980s was $500 a point, it was easier to make 3/4s a point for $375 times few contracts was good money, well 30 years later, ES is watered down and more expensive to trade cause it trades in quarters, I have to trade 10 times contracts to get same bang for the buck, so just doing 100 ES contracts, this old fart use to trade that in early 1990s ten lots. S&P500 use to trade in nickels at $25 a tick. I use to risk 3-4 ticks back then, price use to adhere to trendlines and support/resistance areas and often times to the tick,.....but not any more. So now I actually have to set my targets of 8-9 ticks, so up to half my trades on original entry is one tick which brings down overall average, but me averaging down on each trade makes what I make overall to be greater than what you think breakeven plus a tick as I will go eight levels down against the position. And yeap, when I have a couple losing trades in morning when I am trading greatest quantity, it very expensive, but when one back tests as much as we do, over 26,000 sample size over 13 years, you figure out when to quit and how to work to get it back next days. It is a business like the "Dollar" stores, I am making a little each day (almost), not swinging for the fences, just grind it out each day. Just learned where my edge was long ago. I am very good at long term commodities on a very unpopular way to trade however reward to risk is huge and stay in years and good enough to make ticks for day trading. Lost ego long ago when trading. I (we) day trade 40 markets between manual and automated, just small amounts, just like a Dollar store.
When driving through mountain ranges, most people see beautiful mountains, I see barcharts. People see tall buildings from afar, I see barcharts, LOL I can se barcharts with just about anything.
I have a sensible Goal of 4-6 points then cut back size, I have worked very hard to start day and not lose, I know how tough it is to learn this business, and I do try to share the knowledge I have gained before I lose it. People have to learn to accept and less greedy as far as going for sensible profits, get good and add lots.
When driving through mountain ranges, most people see beautiful mountains, I see barcharts. People see tall buildings from afar, I see barcharts, LOL I can se barcharts with just about anything.
I have a sensible Goal of 4-6 points then cut back size, I have worked very hard to start day and not lose, I know how tough it is to learn this business, and I do try to share the knowledge I have gained before I lose it. People have to learn to accept and less greedy as far as going for sensible profits, get good and add lots.
Iwilldoit
I not believer of taking divergences off longer timeframes unless you have fears of over trading. Like on day like today, most trades on five minute you in for one bar or 3 bars, now of course I am grinder and not looking for homeruns. These are examples as I simmed it.
I not believer of taking divergences off longer timeframes unless you have fears of over trading. Like on day like today, most trades on five minute you in for one bar or 3 bars, now of course I am grinder and not looking for homeruns. These are examples as I simmed it.
Attachments
@Handle123
forgive me if I have asked this before, but what software are you using to backtest?
Also you have mentioned that your backtesting research shows that stochastic divergence is not reliable, may I ask which timeframe have your staff tested on? the 1min? 5min?
Thank You
Yes, I ES traded today.
Between myself and staff, made our own backtesting software, charting and platform, took three years.
Stochastics of all standard Oscillators type indicators showed least profits for how I take entries for Blue crossing Red. Yes, overall it was profitable, but when you compare to chart patterns, volume divergences, retracements to sma, etc...others showed me lower losing percentages. But of course your methods are much different than how I tested as mine included 35 rules of when not to take trades and money management rules. I have found too many believe one system should give everything you seek, but blending price action patterns, support/resistance can keep you out of iffy signals. Some markets like Crude Oil do fine on buying new highs on the day, but less so on Indexes as they used as much more as hedges.
I didn't say stoch divergence is not reliable, I said I don't like the indicator cause it slow for trend trades, usually near end of trends. Only way I have see it to work better is larger timeframes as one minute seems too many false signals. What I have found to work well on one minute durations is reverse divergence works well enough.
Looking for divergences as they like small breaking of previous pivots
Attachments
I have a journal of sorts - easy enough to find if you want to find it. I'll utilize stochastics on whatever data set I may be watching. As far as time series, when I use a time series chart, I only use 5 minute, daily, and weekly bars/candles. For the most part I am more concerned with range and volatility, and so I mostly use range charts and I set the range based upon recent average true range of the instrument across the time frame I am trading, e.g. I'll use a smaller range for intraday trades, and a larger range for multi-day, multi-week, multi-month swing trades.
I usually only pay attention to the fast stochastic (I pay little to no attention to "crossovers"), and I use a look back period determined by the instrument's current ATR. For example, I may currently be using a 5 period look back on the ES intraday, but next week it might be 2 or it might be 12. I pay little to no attention to divergences, and I do not use an oscillator to determine trend. For my automated systems, for example, trend is always defined in terms of price relative to one or more moving averages. I will use the oscillator to program the timing of the trigger.