ES Reversal Method

[steve46]

Hello:

For me this is not an "either/or" question.

As regards execution, automation is unsurpassed. A program will simply execute, without stopping to consider that the last few trades were losers.

As part of an adaptive process, the human mind is unsurpassed. Our basic operating software cannot be beat for adapting on the fly to a dynamic environment.

That is why no one has been able to devise a consistently profitable program to trade index futures.

and yet, after a learning period of several years, I have traded the index markets profitably for more than a decade.

What automation can do (when it is done well) is to capture specific market action and monitor the breadth of the market in a way that humans cannot.

Steve

 

[ww_nyc]

You are right. This can affect some small number of cases.

Quote from mctrader:

One remark to the code example from ww_nyc;
I understood that the idea from NPP was to stop trading long for the day if stopped out of a long below the low of the previous day, and viceversa for a short.
I think the current code stops trading at any time when the price is trading outside yesterdays range, and a position was closed.
So maybe the code should look like:

//Decide whether to call for the day - only if loss
If (MP = 0 and MP[1] < 0 and (high[1] >= highd(1))) then begin
doneshortfortheday = true;
end;

if (MP = 0 and MP[1] > 0 and (low[1] <= lowd(1))) then begin
donelongfortheday = true;
end;

 

[Buy1Sell2]

Quote from steve46:

Hello:

For me this is not an "either/or" question.

As regards execution, automation is unsurpassed. A program will simply execute, without stopping to consider that the last few trades were losers.

As part of an adaptive process, the human mind is unsurpassed. Our basic operating software cannot be beat for adapting on the fly to a dynamic environment.

That is why no one has been able to devise a consistently profitable program to trade index futures.

and yet, after a learning period of several years, I have traded the index markets profitably for more than a decade.

What automation can do (when it is done well) is to capture specific market action and monitor the breadth of the market in a way that humans cannot.

Steve

In addition to your post, it needs to be noted that humans are more likely to catch the bigger moves and the bigger profits.

 

[Buy1Sell2]

These posts by the way are not off topic--they are here to help NPP and others to make decisions about whether to try and automate system like NPP is trying to do.

 

[ssternlight]

Quote from Buy1Sell2:

These posts by the way are not off topic--they are here to help NPP and others to make decisions about whether to try and automate system like NPP is trying to do.

Not sure I agree that the usual discussion about the merits of automation vs discretionary trading belongs in a journal about a specific trading system. If we were talking about how to code it up or what the specific rules were then we would be more on point.

But since we are just shooting the breeze and NPM hasn't seemed to mind I'll add the following anecdotal thoughts.

I have designed both futures and equities systems that trade mechanically and make $s. All of them require periodic adjustment to adapt to market conditions -- that's just the way it is. All of them are better "traders" than I am -- which may not be saying much. None of them will make me rich beyond the dreams of Croecus

In the 8 odd years that I have been doing this, I have yet to see a discretionary trader that upon close investigation either a) was long term profitable or b) hadn't intuited a set of rules that could be coded and automated.

While I haven't worked an arcade or a desk at an IB, my personal opinion is guys that shoot from the hip blow up sooner rather than later. People that believe they could get a quick entry or exit and make some change are probably right sometimes but in the long run don't have a sustainable edge.

Oh yes, I should add that while I have a few systems that do fine I have created and tested literally 1000's that would have just eaten my accounts -- including some from popular day trading sites.

Just my $.02.

 

[mechtrader41]

To master the psychological issues you need fixed rules you can write on a piece of paper, the only problem is to get all this sometimes complex stuff coded to trade it with a software, i see no diff. between the 2 methods, for me i`m not nearly always in the state of mind to work high concentrated on my rules and observe all this details, this is better done by machine and I find this equitycurve does not look to bad....

 

[mechtrader41]

Back to tradingissues...
What we got today is a pattern that could be useful.
1.) Yesterday = monday and close<open
In Bullmarkets you have a high probability of a "turnaround tuesday" if monday did close negativ. It`s quite easy and that`s the reason why not seen by many..
if monday = negativ buy tuesdays open and close at wednesdays open.

below the strat, i also use as bearmarketindicator, it did not turn negativ since 1982 until 2000 and turned again positiv in 2003

i use the avgtrade as indicator

 

[mechtrader41]

Next did we saw a sharp afternoon selloff, followed with a lower low short after open, i bet some bananas that this has a high probability of turning, but i see the entry not by fading the move, but by going with the trend, means wait for the first pullback to enter or a break of the inverted head and shoulders, or whatever..

3 adding Probs for long

---negative monday in a bullmarket

and

---sharp selloff with new low next day ---very soon after open (that would i ---call oversold)

and

---momentummove up larger than the ---initial downmove

so try to code this, of course you have to be a little bit patient to trade, not to much opportunities/year

the arrows are my prefered entry, exit MOC, breakevenstop from lunchhour.

OK, a post in hindsight and i did not take the trade cause i haven`t coded/tested it (not to easy ...)and i trade another system.

So a system can be built by looking for more patterns/conditions in this fashion and combine it to get more frequent signals. But don`t trade just indicatorsignals, please.

 

[cnms2]

This is no_pm_please's journal, not a theme thread, so it's up to him to ask for help or suggestions. I don't recall him doing so. As far as I understand, he just wanted to share his new method.

Quote from Buy1Sell2:

These posts by the way are not off topic--they are here to help NPP and others to make decisions about whether to try and automate system like NPP is trying to do.

 

[no_pm_please]

When I came here and started this journal I was very excited. Since then I've lost interest in continuing. From now on I'll keep my ideas to myself.

Sorry to all those with a interest in the topic. Just too much negativity for me to bother.

I'm done with this thread and ET.