Keeping It Simple

Quote from LongShot:



haha ... well then close your eyes and pick a direction .. you'll be right half the time.
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Yeah, but buying low and selling high and vice versa gives you better chances than 50%. Given a generous initial stop loss (say 4-6 pts) and closing after a target of 10 pts is reached would probably make it profitable. Not that I tested it, but seems to me like a sound idea. Of course it's important to know when it is low or high enough, but that again could be determined using TRIN and TICK. A very simple system indeed. Getting 10 pts only 10 times a month and 12 losses of 5 pts during the remaining days gives you 40 pts a month, or $4,000 for two ES contracts. Is that doable? I think so, I might even try it when I get bored with my purely mechanical systems. Except that last month they scored about 140 pts so at this point I have no incentive to abandon them.

Trading can be simple. It can be as simple as you make it. The thing is that some people have strange notions about trading and so they make it more complex than it needs to be.

I will do it for fun and will even post the results of my simulated (paper) trading using this idea next month unless I am busy with something else, which may be the case too.
 
Quote from Bankedout:



Simple doesn't mean the trading will be easy.
Banker
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That is true, that's why I prefer both simple and easy. But that's the next step in thinking simple.
 
Quote from nkhoi:



I keep this chart around, same idea but hard to trade without knowing the price.
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I think it depends on what rules you use to trade. For instance if you were a trend trader, you could say that the black line on your chart represents trend direction to you. When the line is rising, that would mean prices are trending up in your time frame. When the line is falling, prices are trending down for you, and when the line isn't showing a clear direction, the trend is not firmly established.

If you were a trend trader, you would probably want to be trading in the direction of the trend. Meaning if you saw the line steadily rising, you would most likely want to look for a place to enter a long position. Maybe a pullback towards your trend line (moving average in this case) would be a viable spot to you. Likewise, when the trend you are following ends, you would want to get rid of your position.

Not knowing prices doesn't mean you can't trade well. You could judge your performance by how you trade each trend on the chart. Maybe a successful trade to you would be one where you captured a majority of the trend. If you define success by how many points you captured, there could be a problem in not knowing specific prices.

I guess it's all perspective. I could see a problem with not knowing specific prices for many strategies. For others, I don't see it as being detrimental.

Banker
 
Quote from Bankedout:



Not knowing prices doesn't mean you can't trade well. You could judge your performance by how you trade each trend on the chart. Maybe a successful trade to you would be one where you captured a majority of the trend. If you define success by how many points you captured, there could be a problem in not knowing specific prices.


Banker
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without price entry is always market order and I worry about paying too much for it but I haven't though about 'trade the trend' idea at all, thank.
 
DB I really enjoy your posts in this forum. I need clarification on a couple of points however. How are you using your trend line and LRH/LRL to exit your trades after you have captured a 5 pt. move and your s/l has been moved to b/e. Also I'm not clear on how your reversals work. A chart would really help. I appreciate your honesty and willingness to share in this forum. Thanks.
 
Quote from nkhoi:



without price entry is always market order and I worry about paying too much for it but I haven't though about 'trade the trend' idea at all, thank.
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This is true, you must use market orders. You could trade items with sufficient liquidity to help curb the fear of paying too much. Another thing you could do is avoid entering runaway price situations (breakouts, breakdowns, ramps, etc.). There are always times on every chart where prices hang around a certain area for a while, this can often provide an opportunity to enter or exit without worrying about paying too much (if I understand what you mean by that). Or you could even enter while the counter trend reaction is currently taking place. This would mean that prices are moving against the trend you are entering, and of course that short term force of prices would help control the "paying too much" idea. There are many ways to address the issue, you would have to find one that is comfortable for you.

I'm surprised that you have never considered trading trends. How do you usually trade?

Banker
 
Quote from Bankedout:



I'm surprised that you have never considered trading trends. How do you usually trade?

Banker
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since I don't know when the trend will end I am more of dblarrow style, jump in with from some signal often based on H&S + hi vol + touching 1 side bband. Target 2p with rolling stop loss starting at previous fractal hi/low.
 
Quote from nkhoi:



since I don't know when the trend will end I am more of dblarrow style, jump in with from some signal often based on H&S + hi vol + touching 1 side bband. Target 2p with rolling stop loss starting at previous fractal hi/low.
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I see. I don't think anyone knows when the trend will end. Sometimes a larger time frame than the one you are trading can offer clues, but it's definitely not guaranteed, by any means.

It sounds like you are scalping or swing trading. I can see that as a way to make money in the e-minis.

I see something on a larger time frame that I feel compelled to trade. I'm not willing to trade it with ES or NQ, so I'm going to use ETF(s) for a bit. It will most likely involve holding overnight (unless I am wrong). If I'm right, the trade could go on for months or??? (one never knows when the trend will end...)

Keep it simple,

Banker
 
Quote from mojo59:

DB I really enjoy your posts in this forum. I need clarification on a couple of points however. How are you using your trend line and LRH/LRL to exit your trades after you have captured a 5 pt. move and your s/l has been moved to b/e. Also I'm not clear on how your reversals work. A chart would really help. I appreciate your honesty and willingness to share in this forum. Thanks.
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To begin with, you have to be able to leave the trade alone, and I'm finding that a great many people just can't do that, any more than they can maintain Ignore lists, both of which are manifestations of a certain type of compulsive behavior. Trends of any type take time to develop, even if you're using tick charts, and even more time is required to allow price to show you where the trendline should be. If in the meantime you find yourself biting your nails to the quick, then you have either to learn to back off and let the market do what it's going to do, or adopt a strategy which is more closely aligned to scalping tactics.

Look at it this way: if a genuine move is going to develop (as opposed to a fake-out or a feint), then you pretty much have nothing to do besides wait for it do so. And since you have no control anyway, other than over when to enter and when to exit, this "letting go" is a valuable lesson to learn. If you can manage it, then you eventually will have -- if long -- higher swing highs and higher swing lows (or reaction highs or whatever you want to call them), and you will have no trouble drawing a line under the trend that is developing.

Once that trendline is there, any violation of it is a warning that the trend may be ending, or at least winding down. However, the winding down may only be a consolidation in preparation for a resumption of the advance, which is why you don't want to exit too soon. Therefore, you don't exit just because the trendline is broken; you exit only when there is clear evidence that the trend is reversing, in this case when price drops below the last reaction low (again, if long).

I'll try to post a chart which I hope will clarify.

--Db
 
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