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reversals
- Thread starter nwbprop
- Start date
Quote from hypostomus:
...I recently backtested on NQ in 5 min bars the classical definition of a trend which you use. It was marginally profitable with my transaction costs, but not good enough to trade IMO. Since my testing has shown that NQ is a better vehicle than ES, I would doubt that it is profitable in ES. Also I think it's way too obvious a system to rely on. IMO money is made on subtle systems which take a free ride on market manipulations.
Could you direct me to where I could conduct some tests as you did? Thanks.
Quote from nwbprop:
Reversals on the 5 min bars often fail too continue and often lead back into the original trend direction. This can be seen as a 5 min bar pullback but does not break the prior 15 min bar confirming the reversal. Instead it resumes the 15 minute trend and does not turn into a reversal.
Hmmmmmm...sounds like if you reverse your strategy, you'll have a profitable method.
Quote from Trend Fader:
Simple answer.. trend trading the ES intraday is a losers game. You are basing an entire method on an instrument that is one of the most choppiest trading vehicles in the world.
As Ditch stated, "choppy" isn't necessarily a bad thing if you adapt your strategies to take advantage of the additional entry opportunities. The term "choppy" is used too much to describe movement that is not to our liking. The fundamental fact of the stock indexes is that they are positioning markets - to the extent that some make their living (not me) based on trend neutral trading (which is a fancy way of saying they make their $$$ from positioning rather than from picking the right direction).
And as hypo stated so well in another thread, all trading is attempting to capture the trend. It's just a matter of which timeframe of trend you are attempting to capture.
Just because trend trading the ES was a loser's game for you doesn't mean everyone is losing trend trading the ES. It only means that you have proven that the trend trading strategy you used or tested was a loser.
The key to trading is coming up with a strategy that matches the market. The stock indexes have certain characteristics that can be exploited and at very least should be taken into account. If your strategy does not take those tendencies into account, then how can you expect it to be profitable? Your method will be fighting the trend so to speak. Just because books talk about moving averages and oscillators, does not mean that they are going to work on a particular market as they were presented. Profitable trading requires creative solutions that come from really understanding your method and market, and which don't flow from tearing off the shrink wrap and clicking the "optimize" button on your new backtest software.
If you want to trend trade intraday go with currencies or bonds..
From what I can tell from the system being discussed, this might improve results though it would have to be tested. There is no guarantee that there is any edge to this current incarnation of the system, regardless of which market it is applied to. The question becomes, are you a particular strategy trader, or are you a particular market trader? If you must trade this one strategy, then by all means look for a market that fits the strategy, but also make sure your method is fully defined for all possibilities and has a profitable expectation. If you must trade the ES, then develop a technique that at very least takes into account or better yet, exploits the market's natural tendencies.
Here is another realtime example that ended up resuming into the prior 15 minute trend. I ended up getting relong on the break of the high of the day.
Using this as an example. I reversed my long and sidelined as bar2 did not close lower than bar 1. I was debating on getting long at the low of the prior 15 min bars low for a possible resumption of the long trend. It would have really paid off in this example.
Using this as an example. I reversed my long and sidelined as bar2 did not close lower than bar 1. I was debating on getting long at the low of the prior 15 min bars low for a possible resumption of the long trend. It would have really paid off in this example.
Attachments
Quote from colina:
C) Don't try and pick top and bottoms. If you learn to scalp and it blossoms so much the better. If not, so what! You are in just for a point and you are nimble to get out early on if you feel uncomfortable with the follow thru. The motivation is not to pick tops or bottoms. Anything unforseen may happen within the next trading bars.
Perfectionism is a weakness in traders....
Thanks for the reply. I think what I may need now is what you explain as C). Lots of alternatives, just need too focus and figure out which one will work best for me.
...I use E-Signal (www.esignal.com) for charting and backtesting. However, TradeStation (www.tradestation.com) is probably the more popular tool. The learning curve is steep (be prepared to invest 6-12 months at it), but once you get proficient at coding price patterns it's relatively easy to test a new idea which occurs to you. The advantage is that you will know for certain what doesn't work on the issue you trade. This may lead you to a discovery of what does work. The pattern you mentioned is not simple code, but fortunately what works IS simple code. The real difficulty lies in having the patience day in and day out to ferret out the peculiar and often paradoxical patterns which work. Thinking about what has to happen to make US wrong and THEM right helps.
Quote from nwbprop:
Here is another realtime example that ended up resuming into the prior 15 minute trend. I ended up getting relong on the break of the high of the day.
Using this as an example. I reversed my long and sidelined as bar2 did not close lower than bar 1. I was debating on getting long at the low of the prior 15 min bars low for a possible resumption of the long trend. It would have really paid off in this example.
Keep writing out your method until you can fit it on an index card, or at least each entry rule on a separate card. Once you can explain it to a 6th grader, go ahead and manually backtest it on bar data, keeping track of entry/exit and P&L, and making note of how it can be improved. You will start getting a bunch of new ideas at this point to make the approach into a more comprehensive system.
...Nwbprob, a hot tip: go look at TriPack's current thread and think through the system which sells into the retrace he's waiting to buy. That makes money, too. That's how ya gotta think.
Hi, nwbprop
I think you will be successful trading EURODOLLARS first of all, than T-NOTES. Paper trade and see.
Avoid E-mini S&P 500.
EURODOLLARS presents the biggest volume in the futures markets (easy to go in and out), much higher than S&P 500, but many traders are not informed.
If you like E-Minies, try Dow(CBOT). See also www.cbot.com. Click EDUCATION, than WEBINARS (a lot of FREE online seminars),select a seminar, click VIEW RECORDING. You can see a seminar as many times you want. Take notes, than paper trade.
Have a good trading.
I think you will be successful trading EURODOLLARS first of all, than T-NOTES. Paper trade and see.
Avoid E-mini S&P 500.
EURODOLLARS presents the biggest volume in the futures markets (easy to go in and out), much higher than S&P 500, but many traders are not informed.
If you like E-Minies, try Dow(CBOT). See also www.cbot.com. Click EDUCATION, than WEBINARS (a lot of FREE online seminars),select a seminar, click VIEW RECORDING. You can see a seminar as many times you want. Take notes, than paper trade.
Have a good trading.