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Exit methods for trend-traders
- Thread starter Cutten
- Start date
I never said that i define the trend with 1 indicator. I use information from 4 different timeframes on which I do calculations to define for each scenario something that you could describe as the support and the resistance levels for that scenario. Or in other words what is the high and the low to be expected for this scenario. So I anticipate. The combined âfour timeframes calculationsâ are projected on the hourly chart. Than there are three other indicators in the hourly chart that monitor the market and give information about the evolution of the scenario. They are also used for the timing of the trades. My signals always come BEFORE the point where to take action. So in fact every scenario gives in advance the point where normally the move should end. The calculations donât give price levels but the time when the point is reached to take action. Price is irrelevant at this point. If the signal is there I have to take action, no matter where the price is.
If there are whipsaws I have to get out of my trades, but because my entries are most of the time very good I manage in general to get out without losing lots of money.
About the bottom and reverse in point 2: I have statistical proof that at point 2 my hourly chart should have reached the bottom and that we should reverse . This statistical proof comes form extensive testing each scenario. For this specific scenario at point 2 all the specific conditions were fulfilled to be a valid point to take action. Statistically there had to be a bottom at point 2. At that point a new scenario starts and at that point I already know what statistically should happen afterwards.
About point 4: I always try to filter the noise out of the quotes and to keep the essential. This can result in going short while the very short trend is long (or the candle is green). These are excellent entries because you get almost the highest highs when you go short. The only important thing is that your system should be reliable and be right about the direction, otherwise you get caught in an opposite move. Again, this has been tested over very long periods and over lots of trades (+1000 trades). You could compare it with an upper correction in a downwards move ( the market moves in waves up and down).
The trade started as a rather weak short but in my calculations I saw the strength of the trend building up. At point 4 it reached a level that told me to change the scenario from a weaker short to a strong short. The market is dynamical and so is the system. Afterwards it was clear that we should go down, but the difficulty is to know it in advance (actually itâs more about guessing than knowing) with enough certainty. All the scenarioâs are based on studies about probabilities. The trend system I use is built and programmed from scratch and doesnât use any standard indicators or deviations from standard indicators.
If there are whipsaws I have to get out of my trades, but because my entries are most of the time very good I manage in general to get out without losing lots of money.
About the bottom and reverse in point 2: I have statistical proof that at point 2 my hourly chart should have reached the bottom and that we should reverse . This statistical proof comes form extensive testing each scenario. For this specific scenario at point 2 all the specific conditions were fulfilled to be a valid point to take action. Statistically there had to be a bottom at point 2. At that point a new scenario starts and at that point I already know what statistically should happen afterwards.
About point 4: I always try to filter the noise out of the quotes and to keep the essential. This can result in going short while the very short trend is long (or the candle is green). These are excellent entries because you get almost the highest highs when you go short. The only important thing is that your system should be reliable and be right about the direction, otherwise you get caught in an opposite move. Again, this has been tested over very long periods and over lots of trades (+1000 trades). You could compare it with an upper correction in a downwards move ( the market moves in waves up and down).
The trade started as a rather weak short but in my calculations I saw the strength of the trend building up. At point 4 it reached a level that told me to change the scenario from a weaker short to a strong short. The market is dynamical and so is the system. Afterwards it was clear that we should go down, but the difficulty is to know it in advance (actually itâs more about guessing than knowing) with enough certainty. All the scenarioâs are based on studies about probabilities. The trend system I use is built and programmed from scratch and doesnât use any standard indicators or deviations from standard indicators.
Quote from jrkob:
Spike, would it be possible for you to clarify what suggests that the downward trend should make a bottom and reverse in 2 ?
Here also I fail to see what suggests a "clear downward" movement. 4 is right above the green candle at 12:10pm right ?
Thank you in advance.
Programmed in easy language for TS2000.
I use TS 2000i. But it is not about 1 indicator; it is a complete system. I don't believe in 1 "superindicator".
I had dozens of ideas that i tested. This idea appeared to be fairly succesful. I was always told that you need to examine 1000 ideas to find 1 that is worth it.
But the main thing is: try first to understand how and why the markets are doing what they do. Once you understand this you can start building a system. Most people start the opposite way ( because they are lazy?); they take an indicator and try to optimize him in the hope to make easy money. Things are not that simple if you want to make real money.
I use TS 2000i. But it is not about 1 indicator; it is a complete system. I don't believe in 1 "superindicator".
I had dozens of ideas that i tested. This idea appeared to be fairly succesful. I was always told that you need to examine 1000 ideas to find 1 that is worth it.
But the main thing is: try first to understand how and why the markets are doing what they do. Once you understand this you can start building a system. Most people start the opposite way ( because they are lazy?); they take an indicator and try to optimize him in the hope to make easy money. Things are not that simple if you want to make real money.
Quote from nzbryant:
Spike
Wow. What is your indicator programmed in - what does it display in?
Did you invent it from scratch or did you get significant ideas from elsewhere?
Yes to your comments.
I still think expert emotionally balanced discretionary is the most profitable system however - thats what I am aiming for.
Haven't found many systems that work better than expert discretionary, though I havent backtested on multiple timeframes such as your system does.
But...100% a month you said earlier - are you serious?
I still think expert emotionally balanced discretionary is the most profitable system however - thats what I am aiming for.
Haven't found many systems that work better than expert discretionary, though I havent backtested on multiple timeframes such as your system does.
But...100% a month you said earlier - are you serious?
I trade the ES with 1000$ margin per contract. I make more than 20 points net a month. 20 points is 1000$ or 100%. The real power lies in the fact that i have normally +90% profitable trades. So i don't give much back to the market from what i earn.
Quote from nzbryant:
Yes to your comments.
I still think expert emotionally balanced discretionary is the most profitable system however - thats what I am aiming for.
Haven't found many systems that work better than expert discretionary, though I havent backtested on multiple timeframes such as your system does.
But...100% a month you said earlier - are you serious?
Quote from spike500:
About the bottom and reverse in point 2: I have statistical proof that at point 2 my hourly chart should have reached the bottom and that we should reverse . This statistical proof comes form extensive testing each scenario. For this specific scenario at point 2 all the specific conditions were fulfilled to be a valid point to take action. Statistically there had to be a bottom at point 2. At that point a new scenario starts and at that point I already know what statistically should happen afterwards.
So are you saying that upon entering your trade a point 1, which to me looks like you should be buying but you get short, you have stastical proof that bottoms are reached at ~10:18am?
At point 4 there is no obvious trend, it is still trading right around the opening, 1 bar to the right of point 5 seems like a more likely enter point. Obvious shortterm trend down and has broken through the low for the day.
This is why I asked you to tell me the current long term trend for specific commodities, if your system can pick a point like #4 then they could help me. But showing a chart with #'s on it after a trend has happened means nothing. You don't have to give anything away, just tell me what your system shows the current long-term trend is in the commodities I listed earlier, or any commodity for that matter.
I believe it is impossible to identify trends before they happen, its like saying the market will move to X price in X days, no one that says that knows WTF they are talking about, you can guess but thats all it is.
Trend-following is a non-predictive strategy, it follows trends it doesn't try to guess before hand, they are usually late to parties too. On your chart, a trendfollower would have been long at 1, short on that big down move between 1 and 2 and finally short a bar or 2 after 5, losing money on the first 2 trades and making it back on the last one.
Please just identify the strength of the current or future trends in a couple markets, just for my edification.
Quote from spike500:
I trade the ES with 1000$ margin per contract. I make more than 20 points net a month. 20 points is 1000$ or 100%. The real power lies in the fact that i have normally +90% profitable trades. So i don't give much back to the market from what i earn.
Thats not how it works, unless you only use $1000 to trade and if your system shows that it is right 90% of the time I find it very hard to believe that you are trend-following or you just have a very loose veiw on what right means. With those #'s you must be selling out of the money options. If you have that good of results why wouldn't you crank up the leverage and actually make some really money, $12,000/year isn't what most people get into trading for, I think you can make more working the drive thru window.
5yr
Quote from spike500:
I trade the ES with 1000$ margin per contract. I make more than 20 points net a month. 20 points is 1000$ or 100%. The real power lies in the fact that i have normally +90% profitable trades. So i don't give much back to the market from what i earn.
Well thats good because it sounds like you don't have much to give back.
Quote from 5yrtrader:
Well thats good because it sounds like you don't have much to give back.
I'm trading right now; i will come back to your nonsense after the closing of the market. But it's already clear that you're an expert. Because you talk about "selling out of the money options" in ES futures. That's something new to me.
You apparently already know that i make 12.000$ a year without knowing how many contracts i trade. You have special gifts. Better trade in some gifts for the ability to read what is written, because that seems to be fairly difficult to you.