Keeping It Simple
- Thread starter dbphoenix
- Start date
It should be internally consistent, though it is getting awfully long. I thought interest had died, but if there are still people out there using this, it might be best to start another thread.
As for posting on other threads, I follow a variety of methods depending on market conditions, but I never use indicators or TRIN or TICK or MAs or pivot points or any of the rest of that, nor do I go by "feel" (or at least I try to avoid it). So whatever Tony is doing was picked up from somebody else. It's possible he may be trying Banker's approach.
--Db
Tony, there are a number of examples in this thread with charts, but as I said in the previous post, it's become awfully long, so perhaps it might help if I applied my particular strategy to today's action (on the NQ).
The opening range was established by 0940. Entry would be a 2pt breakout from the top of this range, or a 2pt breakdown from the bottom of the range.
The breakout occurred at 1035. However, it was a false one, and the trade failed for -5 (I use a 5pt stop on the NQ).
There was no other trade until 1151, when price broke down through the opening range low.
The target for the day was 992.5 (the ten-day average of the daily range, deducted from the day's high). This was reached at 1504.
At this point, there are several exit strategies that could be used. You could use a point trailing stop, a percentage trailing stop, a trendline break, the last reaction high, sell at the close, or even sell outright when the target is reached.
Today, the exit that would have made the most sense would have been selling at the close, but even if you sold at the target, you should have made at least 13.5pts. Deducting the loss from the first trade, your net before commissions would be +8.5.
If you had held till the close, you would have made 5 extra points, +13.5 altogether.
Total trades: 2. No indicators, no more than two charts, no MAs, no T&S, no LII.
If you have any questions, feel free to ask.
--Db
The opening range was established by 0940. Entry would be a 2pt breakout from the top of this range, or a 2pt breakdown from the bottom of the range.
The breakout occurred at 1035. However, it was a false one, and the trade failed for -5 (I use a 5pt stop on the NQ).
There was no other trade until 1151, when price broke down through the opening range low.
The target for the day was 992.5 (the ten-day average of the daily range, deducted from the day's high). This was reached at 1504.
At this point, there are several exit strategies that could be used. You could use a point trailing stop, a percentage trailing stop, a trendline break, the last reaction high, sell at the close, or even sell outright when the target is reached.
Today, the exit that would have made the most sense would have been selling at the close, but even if you sold at the target, you should have made at least 13.5pts. Deducting the loss from the first trade, your net before commissions would be +8.5.
If you had held till the close, you would have made 5 extra points, +13.5 altogether.
Total trades: 2. No indicators, no more than two charts, no MAs, no T&S, no LII.
If you have any questions, feel free to ask.
--Db
I too trade the futures intraday. I find your method interesting Db and I was following this thread on a daily basis but then you stopped posting. I thought is was you who was becoming disinterested in keeping it up. I would like to see the thread continue if at all possible. Why did you stop posting your daily trades? Do you trade only the NQ? Why not ES?
I was asked not to post daily trades because that made it a journal, and I have no interest in maintaining a journal, at least online. So I stopped posting daily trades. Then someone who'd like to see it disappear altogether implied that I was keeping it alive artificially by making posts even though nobody cared, so I stopped posting except when responding to questions, which I'm happy to do whenever they come up. Otherwise I assume that whoever is using this is working on variations which suit their temperaments, all of which I'd like to hear about (the variations, that is, not the temperaments).
As for the NQ, I really couldn't tell you. I've been trading it for over a year and I feel like I "understand" it, which is probably a self-delusion. I don't see that one is necessarily superior to the other with regard to this strategy, but I do think it's important to keep both up on the screen for confirmation. For example, the NQ may be getting ready to break out, but the ES is sailing off in the opposite direction, so I won't take the trade since those nearly always fail. And there have been times when trading both simultaneously would have made more sense than trading two or more lots of just one. But that's all down the road once one has become comfortable with it and is ready to play. Until then, it's best to keep it close and deal with whatever issues arise in the implementation.
--Db
I don't remember exactly what I said in this regard, or when I said it, but I've learned to avoid reversals unless the target is met, or damned near.
If the target isn't met, the "reversal" more often than not pulls back to the halfway level, more or less, then just craps around for a few hours until it drifts off one way or the other, and these are not the trading conditions I look for.
The most reliable patterns for me are Ws and Ms, though the 2B late yesterday afternoon was worth taking. But the probabilities on cups and handles and flags and pennants and wedges and so forth just aren't good enough, at least for me, particularly in a market as dull as this one has been. If the market wakes up, though, I'll look at all those again.
--Db
DB,
If I understand you method, as described on the first page of this thread, your second entry would have been at 1006, (2 pts below the open range low of 1008). And then you would have supposedly move your stop to BE after the position had gained 5 points, (that should have been at a low of 1002 which was made at 11:01 by my computer, 12:01 EST). If you did follow those rules you would have been stopped out at 12:57 EST when the price moved back up to 1007. Did you trade the NQ today? Did you abandon moving the stop to BE?
I have paper traded your strategy from time to time, with usually decent results, but when the opening range is over 10 points and effectively makes the trigger range over 14 points I get skeptical about the success of the breakout working, then I usually end up doing something that screws it up.
If you end up continuing this discussion on a different thread, please PM me so I can find it. Thanks..
Actually, I fudged a bit, Rah. Since the "low" of the range at 0940 and 0944 were only shadows, I thought that the reaction low at 1113-1117 would have more meaning to traders, especially since the 0940 low was 90m old by then. Therefore, I entered two points below that at 1007.5. Even so, this came within a half point of being stopped out at 1257.
Hope I didn't mislead you, but, as I've said, this can't be mechanical (well, I guess it can, but I'm not good at mechanical). You might want a wider stop. Or you may want to wait longer before moving to BE. Or you may want to leave your initial loss limit stop in place and never move to BE at all, or at least wait until the trendline is broken.
None of this really matters. The point is to find the trend and leave it alone, getting out with as little damage as possible if it turns out you were wrong and there's no trend at all. The last thing you want to do is scalp, much less get caught up in chop.
I have paper traded your strategy from time to time, with usually decent results, but when the opening range is over 10 points and effectively makes the trigger range over 14 points I get skeptical about the success of the breakout working, then I usually end up doing something that screws it up.
I know what you mean. And that's the value of paper trading. It's surprising how often price makes it to the target, even if the opening range seems wide. And as the daily range has contracted, the number of points available after the breakout has become less and less.
But, as in your example, there're still 14-16 points available, and that's certainly worth going for. And if it doesn't work, it doesn't work. So far, the worst losing sequence has been three consecutive losses, and that's tough to swallow. But it's important to take every trade. One day I tried twice to enter an upside breakout and lost both times. But the third time, the trade succeeded and made it all the way to target.
One of the objectives of paper trading is to enable the trader to trust the strategy. Only if one has that trust will he be able to put his ego and fears and greed aside when the time comes and take care of business. Without that, he'll be making his stops too tight, or tightening them too soon, or making them too wide, or exiting when there's no action (damn price did nothing for two hours today before resuming the downtrend; talk about patience!) or making some other extraneous and irrelevant move.
--Db