Are you serious? What's the problem? Look at the data. Sure there are "cool" trades that makes lots of money but how do you differentiate those from the ones that lose. The pink lines on the charts show what happens if you stay in the trade all the way until a signal reversal. Either way you lose.
Jasper's Last Stand
- Thread starter jasper6
- Start date
Are you serious? What's the problem? Look at the data. Sure there are "cool" trades that makes lots of money but how do you differentiate those from the ones that lose. The pink lines on the charts show what happens if you stay in the trade all the way until a signal reversal. Either way you lose.
If you read Jasper's thread you will see that he uses Ensign software. I also am using Ensign and the yellow and blue lines are the "Volatility Stop" indicator that Ensign offers with settings of 5.0 and 2.5 respectively. Jasper has continued to adjust these throughout this thread as well as adjusting the size of the constant range bars to try to find a winning combination. My test was just for 2 potential settings using 4 range bars (or 40 range bars as Jasper calls them - ticks vs. dollars, all the same)
I hope Jasper and others finds this useful as some have suggested he log every trade. I have been doing just that so thought I'd share it for what it's worth. It just seems we need something else to make this system profitable - but what?
I assume bars change colour in real-time, so why can't you go short when bar changes from green to red? Perhaps bar formations look perfect afterwards, is there any difference in bars in real-time and historical data? I am simply looking at your charts & can not understand why is it not profitable to simply reverse trades at the time when green changes to red?
I trade ER2 fulltime and when using a volatility based trade methodology...
Fixed profit targets as in taking a profit at X dollars are counter-productive to a volatility based trade methodology.
Also, the same is true for holding it until you got a signal for the opposite direction.
Solution: Profit targets should be based upon the appearance of an expansion interval that has either a volume spike or volatility spike.
That expansion interval should be based upon its body (difference between Open and Close) and not its range (difference between High and Low).
In addition, when trade is in a profit and volatility changes again, that should be the trigger to move the initial stop/loss protection into a profitable trailing stop.
Simply, for a volitile trading instrument like ER2, trade management should be based upon changes in volatility and not based upon fixed X numbers nor flipping a trade long after the volatility has changed.
Further, until you learn and understand the price action of ER2 via understanding how its volatility changes throughout the trading day along with why such occurs...
You need to respect its s/r zones formed by those key volatility changes.
That alone resolves the late reaction I'm seeing occurring in the flipping aspect of Jasper's volatility system.
The above respects one problematic aspect of trading ER2 or any other volatile trading instrument...
Don't let a profitable trade become a loser especially after it had reached profitable price area that contained a volatility spike.
With all that said, I do understand your trying to keep it stupidly simple (KISS) but the reality is you can't do that with the current methodology until you learn to respect ER2 changes in volatility...
Volatility changes that requires a contingency plan to kick in sort'uv speak.
Simply, you guys are spending too much time in tweaking the entry signal that also involves flipping and less time on properly managing the trade after entry.
Re-read my above reply again, again, again and again...
As many times possible until you can see how volatility changes between each system signal that's been shown on every chart posted in this thread.
Mark
defermark - nice tracking and thanks for sharing. Is there a way to break the trades up by 'session' - AM, lunch, and PM? Perhaps there's something there since the mornings can provide some great volatility and action and the lunch and pm's can be hit and miss. Maybe it's just sitting out during lunch.
Something to consider.
Something to consider.
A closing price through the 2.5 volatility stop line switches the colors until you get a close back on the other side of the new VS line. This does happen in real-time. Entries are approximately where the white arrows are on my chart (1 tick over the first green bar high or 1 tick lower than the first red bar low).
JSSPMK - You need to look inside the charts better - the data is correct and I agree that just looking at the charts it does look promising. But when you actually pull the numbers out you get a different story. I guess our eyes are optimistic...
Thanks brownsfan - I did look at that but saw no improvement. You can sort my data by time and see there is no real affect on the equity curve.
Thanks NihabaAshi - good stuff - I will keep re-reading
I guess the "expansion interval" you mention doesn't work with constant range charts, unless you track the time of each constant range bar perhaps...Another idea - maybe tick charts aren't the answer? How about volume charts? Maybe a higher or lower volume chart setting could help weed out some chop.
Just brainstorming here...
Just brainstorming here...