Gems: Methods and Systems

TriPack · Oct 10, 2002

This thread will contain methods and systems found on ET and other sites that are either fully or mostly disclosed. The intent is to provide a resource for those who wish to research trading methods. As with any method or system, no guarantees are made as to profitability or suitability to your needs or personality.

If you would like to post a trading method, start your own thread and let me know via PM or post it in the following methods thread:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=9579

If during your search of the archives you run upon a method that isn't hasn't been included, send me a private message so I can add it here.

TriPack · Oct 10, 2002

http://groups.yahoo.com/group/e-mini_traders_anon/message/1741

You may have to join this yahoo group to view the message. Essentailly this is a method for trading the EMinis using an indicator, in this instance the CCI. There are lots of rules as well as a basic setup. If You are interested in indicator daytrading of the EMinis you might want to check out this rule based approach.

The yahoo group listed above also contains many other systems. There is an active chat group, with many Ensign software based templates. More information can be found on:

http://dacharts.com/

TriPack · Oct 10, 2002

http://www.elitetrader.com/vb/showthread.php?s=&threadid=4636&highlight=indicator

http://www.elitetrader.com/vb/showthread.php?s=&threadid=5932

ET member Jeanmichel tells about the trading setup he uses to trade the Nasdaq futures. In-depth discussions on the pros and cons of trading the Mini contract using this indicator based approach. It uses exponential moving averages, MACD, and a few other indicators. The method is somewhat disclosed, and screen shots are provided.

An excerpt from the first thread listed above:

I'm trading the e-mini Nasdaq Future for the last 2 years and I use this screen (see attached file)

TriPack · Oct 10, 2002

http://www.elitetrader.com/vb/showthread.php?s=&threadid=3334&highlight=openings

http://www.elitetrader.com/vb/showthread.php?s=&threadid=4323&highlight=openings

http://www.elitetrader.com/vb/showthread.php?s=&threadid=5992&highlight=openings

http://www.elitetrader.com/vb/showthread.php?s=&threadid=7976&highlight=openings

http://www.elitetrader.com/vb/showthread.php?s=&threadid=9153&

This is probably the most actively followed method on Elite Trader. There are at current count 5 threads containing in-depth discussion on how to implement this method in an effort to get on the same side of the market as the specialist right off the open. Don Bright, a proprietary firm representative and longtime ET member provides feedback on this method just about every day.

The method can be found right at the beginning of the top link listed above and is discussed throughout the threads.

An excerpt from the first thread listed above:

The most important issue (in my opinion)is the enveloped pricing for each issue. We try to modify the over/under based on sector, volatility, and then adjust them for the current fair value calculations.

TriPack · Oct 10, 2002

http://www.elitetrader.com/vb/showthread.php?s=&postid=60623&highlight=my+methodology#post60623

ET member, Darkhorse talks briefly about his method of swing trading in general terms. He talks about dividing up stock setups into two categories: high profit and high probability and primarily trading stocks that fit in only one of those categories consistently.

An excerpt from the thread above:

The way I see it there are two types of high quality entries, significantly different from each other:

a) high probability entries. i.e. if i get in here reward to risk is decent and odds are very good that i will cash out with a profit.

b) high reward to risk entries. i.e. if i get in here odds of success are 50/50 or maybe even less, BUT if I am right I cash in a big multiple of what I am risk.

TriPack · Oct 10, 2002

http://www.elitetrader.com/vb/showthread.php?s=&threadid=881

http://www.elitetrader.com/vb/showthread.php?s=&threadid=1400&highlight=system

The above thread chronicles ET member, praetorian2's discovery of a "Great new Pattern" (GNP) and the evolution of that pattern into a trading methodology that has helped him become a winning stock trader. The pattern scans for beaten down stocks, and plays them for a bounce, often holding overnight for a few days before the stocks reach their objective.

An excerpt from the thread:

I see a lot of that panic type selling lately where the stock rolls over, there is volume at the bottom, but then it recovers about 70%. Can anyone think of a scan that would be able to detect these types of moves?

praetorian2 also gives a brief bio of his history in trading here:

http://www.elitetrader.com/vb/showthread.php?s=&postid=12146&highlight=GNP#post12146

TriPack · Oct 10, 2002

http://www.elitetrader.com/vb/showthread.php?s=&threadid=873&perpage=6&pagenumber=1

http://www.elitetrader.com/vb/showthread.php?s=&threadid=919&highlight=system

ET member, rtharp talks about his methods for swing trading and daytrading. He goes into the details of what types of risk to reward ratios he is looking for to make each system come out with a positive expectancy. He also covers some of his experience with trading breakout systems.

An excerpt from the first link above:

The first thing I need to do is define my risk when I trade. My risk is always my stop price as I put one in. I classify my risk as R. The next factor to calculate in is your # of shares. This is a multiplier of risk.

TriPack · Oct 10, 2002

http://www.elitetrader.com/vb/showthread.php?s=&threadid=8734

ET member Quah has created quite a stir on ET in a very short period of time with "Something Very Simplistic" and "Son of Something Very Simplistic" (see next post in this thread) systems. The "Something Very Simplistic" daytrading system is 100% objective, and is fairly simple as systems go. It limits the number of daytrades to eleven each day, and focuses more on morning trading than afternoon trading.

An excerpt from the thread above:

Here are my goals for a system:

1. Make a consistent profit.

2. Rules that are repeatable. I don't want to have to think too much while trading. That always gets me in trouble.

3. Doesn't require me to remain in the market with an open position for for than a few minutes if possible. So I guess by definition this will be a "scalping" system.

4. Doesn't require me to be glued to the PC, waiting for signals, interpreting signals, and making decisions. I want to be able to walk away at any time and come back later and not feel like I don't have a feeling for what is going on.

System results are posted at:
http://home.carolina.rr.com/quah/quah1web.htm

TriPack · Oct 10, 2002

http://www.elitetrader.com/vb/showthread.php?s=&threadid=9541

ET member Quah has created quite a stir on ET in a very short period of time with "Something Very Simplistic" (see previous post) and "Son of Something Very Simplistic" systems. This "Son of Something Simplistic" system is also 100% objective and is fully disclosed, but trades much more frequently than the "father" system.

An excerpt from the thread above:

I'm going to start this journal as a sort of offspring to "Something Very Simplistic" (SVS). The general goals are the same - something simple, unsubjective, and profitable.

TriPack · Oct 10, 2002

http://www.elitetrader.com/vb/showthread.php?s=&postid=105305&highlight=option#post105305

ET member, CaroKann mentioned an interesting method for profiting from stock gaps by using a consistently profitable option selling strategy over time.

An excerpt from the post:

instead of playing e-minis, sell vertical spreads (credit spreads). you can get 15% every month doing that. over 38 months, that is 202x your initial account. hint 1: sell bull put spreads under stocks that gap up, no more than 1-3 weeks before expiration. hint 2: sell bear call spreads above stocks that gap down, once/if they make a move up and fail to close the gap.