How To Build an Automated SCT Trading System (Part 2)

Yesterday was my first time to trade with real money. As you suggested, I was a little befuddled by the slow down of real trading pace compared to the 5 X accelerated pace of my replay tool.

Anyway, the result was that I made some goofs and some great trades such that I broke even on gross but netted negative due to commission.

Today, however was better, I got 14 points net on one trade.

After consideration, I will not be able to do true SCT while at work.

Instead, I can get off one or two good trades of a dominant traversal and be satisfied.

My goal will be to get at least 10 points per day net.

I will certainly let the profits run but if I close a trade with > 10 pips profits, I will shutdown for the day.

My financial plan looks amazing with a consistent 10 pips minimum per day.

Today that was only $1.39 cents since I'm trading a Forex micro lot.

But once I'm done practicing, I can certainly raise the stakes.

Any thoughts or questions are welcome.

Sincerely,
Wayne
 
One last thought for today. I need to automated the annotation of "flaws" clearly on the screen. Probably with some text like Jack does. I find that even with the color schemes etc, I don't notice the OB (outside bar) IB (inside bar) etc. during live trading.

Also, I'm still thinking of a way to show that PRV volume is up or down more blatantly obvious. When it's close, it can seem subtle and difficult.

Hey, I got it! Maybe, I can put floating text to the right of the current bar saying, "Rising Volume" or "Falling Volume".

Actually, now that I think about, the MADA logs that Jack uses are just the ticket. I have those but they don't show up on the screen. I'll reconfigure a text area with the scrolling log showing:

Price formations, IB, OB, HVS, etc. Volume Rising, Falling, Continue, Change, Hold Reverse, etc.

Yes. That's the way to go. Actual text logs are the only way to go.

That also makes it possible to review the logs later (debrief) along with the chart to fine tune entry and exit.

Sincerely,
Wayne
 
Clever, Tums.

Good idea. I make inside bars the same as the previous bar. Grey is more obvious and I like the dots.

Still, doesn't it get confusing during live trading?

So many color, dots, etc. It's hard to assess quickly. Or maybe practice makes perfect.

What do you think of having a text log?

You know WHAT???

Each person is different. re: Left/Right brain dominance. For example:

Some people find items in the grocery store by scanning size, shape and color of the product or pictures on the label.

Others (like me) find items by scaning all the labels looking for key words.

I think it's just my left brain dominance saying that I need to see text to get the message clearly.

Wayne
 
Quote from greaterreturn:
Clever, Tums.
Good idea. I make inside bars the same as the previous bar. Grey is more obvious and I like the dots.
Still, doesn't it get confusing during live trading?
So many color, dots, etc. It's hard to assess quickly. Or maybe practice makes perfect.
What do you think of having a text log?
You know WHAT???
Each person is different. re: Left/Right brain dominance. For example:
Some people find items in the grocery store by scanning size, shape and color of the product or pictures on the label.
Others (like me) find items by scaning all the labels looking for key words.
I think it's just my left brain dominance saying that I need to see text to get the message clearly.
Wayne
More...
I reserve the text for more important things.

;-)
 
Quote from greaterreturn:

The standard SCT PRV simply takes the amount of volume "so far" every 5 minutes and pro-rates it for the entire 5 minutes.

Unfortunately, that means a slightly high volume in the first 10 seconds can appear like EXTREME volume at first. Then as the bar progresses it often turns into a low volume bar. So PRV can be misleading at the beginning of each bar.

However, from the middle time of each bar, it becomes more useful.

So a better PRV is useful. It always uses actual volume of a constantly sliding 150 seconds (2.5 minutes). As that bar progresses it may decrease or increase. It looks more stable and you can see it decreasing, increasing, or staying flat as the bar progresses.
More...

That's very smart, thanks!

TNG
 
Just an update...

This week I have been using real money and a micro lot so it's practically zero risk.

Most of the time has been defined with ironing kinks out of the software.

Stuff like the quote server crashing one day, ticks getting backed up due to low network throughput.

All of those issues have been fixed and additional safeguards added. So it's working smoothly today.
 
In this email, I explain how I'm using the automated logs. Hey, anybody, chime in on anything I'm doing incorrectly or could do better, please.

Today was the first time really using the automated log. It's updated every 30 seconds. Hmmm. It gives me facts but not analysis so I found myself incorrectly analyzing and over trading.

Upon debriefing after stopping trading and reviewing the logs, it's clear I missed several "change" signals and misinterpreted some "continue" signals as change.

So I worked through the entire log for an hour of trading window to figure out clearly how to mark the volume signals.

It's amazing how much that builds confidence in the concept of continue and change as well as hold and reverse too.

Now I can see clearly that when volume switches from going up to down down or vice versa it's a "change" signal and otherwise it's continue.

For all the "continues" you mark your analysis "Hold".

Once you get a change signal (just like Jack says) you look at price to decide what that means.

If it's a IB (inside bar) then you ignore the change signal and mark that log "Hold" anyway.

If you have any other type of bar, then go to the price and where it is in the channel to see if price is going "up" or "down". NOTE: That doesn't necessarily mean close is higher or lower. It means if price in general is moving up in a tape channel or down. I'm just using the current tape direction but I may find tune that later. It seems good from today's log.

If volume is up and price is up, that's a long signal. Are you long already? Then mark analysis "Hold". If you're short, then mark it "Reverse" and then do so immediately (or even before marking it.)

Anyway, the long and short is that now, I'm going to automate the analysis step.

That is I'll have the automated log actually indicate "Continue" or "Change" as well as up down, same, etc.

By the way, I found it's better to have a little threshold of volume difference to mark it up or down. If it hasn't changed by that threshold amount, then I just mark it "Same". Same, of course, translates to "Continue".

I'm also going to automate the message of "Hold" or "Reverse" as described above.

That way, it requires less thinking and just verifying that trading is working.

Again, please share your thoughts on if this makes sense or how to improve.

Jack simplifies all this down to a binary table of V (up/down) and P (up/down).

That seems correct now as a concept but maybe it's slightly over simplified so as to give a big picture understanding? Thoughts anyone?

Sincerely,
Wayne
 
Quote from greaterreturn:

In this email, I explain how I'm using the automated logs. Hey, anybody, chime in on anything I'm doing incorrectly or could do better, please.

Today was the first time really using the automated log. It's updated every 30 seconds. Hmmm. It gives me facts but not analysis so I found myself incorrectly analyzing and over trading.

Upon debriefing after stopping trading and reviewing the logs, it's clear I missed several "change" signals and misinterpreted some "continue" signals as change.

So I worked through the entire log for an hour of trading window to figure out clearly how to mark the volume signals.

It's amazing how much that builds confidence in the concept of continue and change as well as hold and reverse too.

Now I can see clearly that when volume switches from going up to down down or vice versa it's a "change" signal and otherwise it's continue.

For all the "continues" you mark your analysis "Hold".

Once you get a change signal (just like Jack says) you look at price to decide what that means.

If it's a IB (inside bar) then you ignore the change signal and mark that log "Hold" anyway.

If you have any other type of bar, then go to the price and where it is in the channel to see if price is going "up" or "down". NOTE: That doesn't necessarily mean close is higher or lower. It means if price in general is moving up in a tape channel or down. I'm just using the current tape direction but I may find tune that later. It seems good from today's log.

If volume is up and price is up, that's a long signal. Are you long already? Then mark analysis "Hold". If you're short, then mark it "Reverse" and then do so immediately (or even before marking it.)

Anyway, the long and short is that now, I'm going to automate the analysis step.

That is I'll have the automated log actually indicate "Continue" or "Change" as well as up down, same, etc.

By the way, I found it's better to have a little threshold of volume difference to mark it up or down. If it hasn't changed by that threshold amount, then I just mark it "Same". Same, of course, translates to "Continue".

I'm also going to automate the message of "Hold" or "Reverse" as described above.

That way, it requires less thinking and just verifying that trading is working.

Again, please share your thoughts on if this makes sense or how to improve.

Jack simplifies all this down to a binary table of V (up/down) and P (up/down).

That seems correct now as a concept but maybe it's slightly over simplified so as to give a big picture understanding? Thoughts anyone?

Sincerely,
Wayne
More...

Hi Wayne,

I just started reading the part 1 of your ATS journey. I'm going down the same path and its good to see like minded people post. I'm not here to discuss whether the strategy you're using is good or bad, but that developing a better system to implement strategies based on human behavior is the goal.
Hope you keep posting. I'm sure I'll have more questions for you later

Thanks

JW
 
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