Nothing Works!

[tiddlywinks]

I have still found that trend following, buying/selling breakouts on the 5 min is the only thing that has given an edge (even if it is tiny) - obviously another force is at play though. why does the 5 min chart behave in a near completely different way to the daily chart. Not asking for a holy grail but maybe a hint in the right direction?

You talk about "trend", sooo...

1) Trends overlap. 5min trend may be down, but 15min trend may be up: Basic stuff. Your example of 5min/daily is out of whack being that earlier you talk about scalping. There will be significant drawdown in your example time pairing. First order of business is to define/locate the "trend" fractal you want trade. Next order is to define the next higher fractal so you can properly work within the overlap.

2) What do all time frames have in common? Most will say pricing. However, the other correct answer is volume. You want a hint?... volume in context of your chosen trend fractal. !In context! If you fail to get the context, you are stuck with price only, i.e. this thread.

HTH

 

[dozu888]

people finally realize that trading is not about 'having discipline', and managing risk' and neither about 'losing a little when you lose but win big when you win' lol.... these phrases are nice for bumper stickers until you put them thru a back tester lol.

if it were only this easy - back test thru some data, find a winning system, be very disciplined, use real money and make a bunch.... financial freedom!

lol.

 

[speedo]

There ya have it folks, bozo888's secret to success, Don't be disciplined, don't manage risk, lose big when you can lose small and vice versa. Be a mindless troll like bozo and start picking out your Lambo color.

 

[monet]

Running a backtest just isn't the same as manual trading.

Manually trade and become profitable at that before attempting to run backtests based on simplistic entry criteria and simplistic trade management rules.

I say this is a professional software developer.

 

[speedo]

Running a backtest just isn't the same as manual trading.

Manually trade and become profitable at that before attempting to run backtests based on simplistic entry criteria and simplistic trade management rules.

I say this is a professional software developer.

Yep, forward testing is real but I would advise a beginner to test strategies on a good simulation platform as you WILL lose money early on. It's up to the beginner whether that loss is real or monopoly money. Trading sim is not the same as using real money but if you can't make "money" in sim, you sure as hell won't by going live.

 

[bone]

Running a backtest just isn't the same as manual trading.

Manually trade and become profitable at that before attempting to run backtests based on simplistic entry criteria and simplistic trade management rules.

I say this is a professional software developer.

Absolutely. I've been PM'd and emailed by dozens of ET Members confused (and hurt, unfortunately) when they've determined that their carefully back tested strategies lost money - and in the case of arbitrage, got them consistently picked off.

I've come to realize that back testing is useful as a screening method only.

 

[Specterx]

Looking for patterns seems like something that can be easily done with machine learning... But of course that doesnt work, and the way stocks move aren't random or statistical. They move based on people making real trades, buying and selling at specific levels to points of liquidity in the market. On a higher time frame, they tend to move in a reflexive way (based on George Soros' theory) which explains maximum volatile crashes preceded by parabolic rises - This is why trend trading works. (forgive the way i write, i know it sounds arrogant and dismissive but im just trying to get to the point).

Clearly, on the lower timeframes, reflexivity does not play a key role... However I have still found that trend following, buying/selling breakouts on the 5 min is the only thing that has given an edge (even if it is tiny) - obviously another force is at play though. why does the 5 min chart behave in a near completely different way to the daily chart. Not asking for a holy grail but maybe a hint in the right direction?

All kinds of stuff happens on intraday timeframes which doesn't apply on dailies. News, econ reports, or shock earnings can send the price up or down an entire day's average range in seconds. Volume and activity clusters around the open and the close, hence all times of day are not created equal.

Everybody in the world would love to slam 200 ES cars in and out multiple times a day, day after day, with a fat edge, making millions a year with minimal volatility, practically zero liquidity risk, no overnight or event risk, minimal capital requirements, no need to stay idle for days / weeks waiting for setups, etc. Let alone to find and exploit such an edge 100% mechanically after just a few days or weeks of work, using simple retail datafeeds, backtesting tools and trading platforms. It's just naïve and foolish to think that anything like this is available in today's markets.

 

[bone]

It's just naïve and foolish to think that anything like this is available in today's markets.

Truth bomb. And it’s self evident if you spend a day staring at a quality real time DOM trade window in a live market. The automated injection of orders creates so much noise in the micro architecture of the markets

 

[wrbtrader]

I've run backtests on multiple systems for scalping the 5 min...

What's going on since 2010 when I first heard the words scalping & 5min charts in the same sentence.

Do people really think algorithms or real scalpers are doing such via 5min charts ?

Every retail scalper I've met in person and watch what they do...they're using DOM, market depth data, tick charts (less than 1min) to scalp. In contrast, the professional trading firms that are scalping...they're using automated trading systems (algorithms) or DOM analysis....making trades in micro seconds...dozens and dozens of trades in micro seconds.

5min charts ?

wrbtrader

 

[speedo]

What's going on since 2010 when I first heard the words scalping & 5min charts in the same sentence.

Do people really think algorithms or real scalpers are doing such via 5min charts ?

Every retail scalper I've met in person and watch what they do...they're using DOM, market depth data, tick charts (less than 1min) to scalp. In contrast, the professional trading firms that are scalping...they're using automated trading systems (algorithms) or DOM analysis....making trades in micro seconds...dozens and dozens.

5min charts ?

wrbtrader

The issue may be the posters understanding of the word scalp. To most traders, it refers to clipping one to a small handful of ticks on a futures or cents on a stock. Trying to do that on a five minute chart would be like trying to saw wood with a hammer.