Simple Profitable Method

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Hi

First post here, so please be gentle :-)

Question for Trader28, when do you exactly enter on the last bar ?

Say, the bar started at 11:00. So, the completition time is 11:01:59.

The last bar was from 10:58 to 10:59:59.
As per the last closing price of this bar, the MACD line is still below 0, but very close.

When the new bar starts at 11:00, there will still be continous input of prices. As these prices are being plotted, the MACD is being recomputed for each new price(tick). So, ONE of these prices will make the MACD line cross above the 0 line. And ANOTHER price may bring it down back to 0. If you see it in real time, the MACD line will keep fluctuation as long as the bar is still not complete.

Say, the closing price on pervious bar was 710.10. And to move the MACD line above the 0 level, the price has to be 710.90.

Now the 11:00-11:02 bar is in works and prices are coming in from the market , say from 709.10 and 710.80. At the 11:00:50 time mark, there is a print of 711.00. This will show the MACD line above 0 at 11:00:50, with 1min and 10 seconds to go as per our 2min bar.

But the bar is still not complete and the last price at 11:01:59 happens to be 710.50. With this as a closing price, the MACD will still be below 0.

A static picture of the chart anytime after 11:02 will show the MACD is still below 0 and no trade happened.

But a dynamic picture would have a shown a long entry !

So, my question is, do you wait for the 2min bar to complete ? Or do you jump in the middle of the bar at the first signal ?

Thanks

Mudit

p.s.: a newbee here so please be gentle when ripping my post and soul
 
I hear what you are saying but you cant be that pedantic about it. I will quite often take the trade as soon as the price pops above the SMA to anticipate the Zero Line breach if the MACD is approaching Zero with intent... very few trades will go up to the Zero Line and then reverse right at the Zero Line so you are worrying about a very small percentage of trades
 
Quote from Cheese:

That was the reverse of criticism. It was a summary.

My point about 'swooping', if obscure, meant that a player would need more. To be precise, you need an accurate trigger to sell off the top of an upmove and buy on the bottom of a downmove. MACD by itself is insufficient. To cruise the whole trading day (eg YM), beginning to EOD, you want buy the upmoves and sell the downmoves, in turn, using, not surprisingly, a complete methodology.
:)
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Yeah, that's why I'm trying to incorporate this trading system into a public model I'm working on desgined to determine the dominant trend (based on the OHLC), and keying the actual trades off of the Pivots, Support(s) and Resistance(s).

While it's not a complete system it gives traders a way to think about the markets, and they can incorporate it (or not) into their current knowledge base as desired.

Thanks for the clarification, your comments and viewpoints carry a lot of weight with me and are highly respected.

Best Regards,

Jimmy Jam
 
Quote from trader28:

I hear what you are saying but you cant be that pedantic about it. I will quite often take the trade as soon as the price pops above the SMA to anticipate the Zero Line breach if the MACD is approaching Zero with intent... very few trades will go up to the Zero Line and then reverse right at the Zero Line so you are worrying about a very small percentage of trades
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I think thats where your discretionary trading kicks in when trading the signal befor the bar is finished. I think its ok to trade based on a 2min bar, but probably not reasonable when looking at say 15-60min bar.

For 2min, it probably may not matter that much. But I'm bringing out the problems of early entry for larger periods and specially for newbee system trader as they may start experimenting it with different bar sizes and time frames. Need to point out the fallacies of system trading and points to keep in mind.

BTW, a way to overcome this is using the HIGH price as input for the last BAR (for long positions and LOW as input for last bar for short positions) and use close for the all other bars. But then you need to have custom programming of your moving avgs, etc.

Thanks

Mudit
 
Have enjoyed this thread. Something I have missed though, not clear on you trading status. Is this methodology something from which you derive your living, or is it just a hobby?

Thanks,
 
Quote from trader28:

Did the 2min MACD cross above the Zero Line? thats all you have to ask yourself
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I talk to myself alot and the answer is ...yes! :)

t28, would you stick to the 10 min rule on this trade or would you have let it run a bit longer?

cheers.
 
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