Simple Profitable Method
- Thread starter trader28
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T28
Hey - I thought your original handle was banned for good (or bad). They let you off probation or something? Welcome back!
With ER2 it would seem that an EMA or weighted MA - something favoring recent prices - might be a bit more predictive (or maybe a bit more whippy?). Don't know if you've tried but I'm thinking about giving them a spin.
Also, I know you've commented on the MA offsets before but I recently turned off the +2 offsets for the MA3 and MA8 and saw a quite a few more MA crosses lining up with the MACD crosses. I went over several months of data and now I'm no longer sure what value there even is to the offsets. Once I've used them for a while it's easy to just visualize the shift anyway.
Glad you were able to get your handle out of gulag. Suggest you quit using big words (like didgeridoo), it confuses the censors.
jimns
Snarly,
I wonder if your stops aren't too tight on a two minute chart YM? Four ticks? Have your stops always been that tight?
There is no doubt that the most powerful set-up is the MACD line crossing above its moving avergage when they are both above the zero line and vice versa going short.
It's a good thing to experiment with different time frames, although I suspect Trader28 stipulated 2 minute for a good reason.
I have four futures charts up on the screen at any one time just watching for the favourite set-up and then I go for it when one of them sets-up. Sitting in front of a screen all day is a chore. I am sure that what we should be aiming for is to trade a larger number of contracts and aim for a smaller number of ticks with fairly tight stops. With a two minute time frame I'd be wary of the old saying, "let your profits run." Get in and get out fast as soon as you hit $100. You can always go in again.
Sean
I wonder if your stops aren't too tight on a two minute chart YM? Four ticks? Have your stops always been that tight?
There is no doubt that the most powerful set-up is the MACD line crossing above its moving avergage when they are both above the zero line and vice versa going short.
It's a good thing to experiment with different time frames, although I suspect Trader28 stipulated 2 minute for a good reason.
I have four futures charts up on the screen at any one time just watching for the favourite set-up and then I go for it when one of them sets-up. Sitting in front of a screen all day is a chore. I am sure that what we should be aiming for is to trade a larger number of contracts and aim for a smaller number of ticks with fairly tight stops. With a two minute time frame I'd be wary of the old saying, "let your profits run." Get in and get out fast as soon as you hit $100. You can always go in again.
Sean
Sean / Snarly
Don't mean to butt in on your dialogue, but FYI -
I've been paper trading the SPM (with some of my own spins) with the 2 min ER2 for two months and have created a top down workspace where I can watch monthly, daily, hourly, 5 min, and 89 tick intervals. My 2 min ER2 workspace also has the 10 min ER2 on it but I've made the 10 min prices invisible and plotted the 10 min MACD on top of the 2 min MACD so I can see both on a single subgraph. Plotting the 10 min MACD this way fills in the 5 2-min gaps between each 10-min interval with a smooth plot - the 10 min MACD has dotted lines and the 2 min MACD solid lines so I can easily distinguish between them.
I'm paper trading a single contract with a simple $200:$300 RR ratio and the winning trades have been in the 70%+ range - examples: 3/7 80% +$500; 3/6 71% $1100; 3/5 73% +$1940; 3/4 100% +$600; 3/1 55% +$1004. (I played with a gap fade, on 2/27 and got killed -$450). On some days a $200:$200 RR ratio works marginally better with ER2.
So far I'm really liking the 3:2 RR and the 2 min seems ideal.
I'm sometimes more aggressive than SPM - like trading a MACD crossover that's still above or below the ZL or even trading a MACD crossover that's trending away from the 10 min MACD. But I only do that when the stars are aligned (like TRIN, PC ratio, TICK, etc. mostly in agreement) - that's increased the number of trading opportunities dramatically.
jimns
Don't mean to butt in on your dialogue, but FYI -
I've been paper trading the SPM (with some of my own spins) with the 2 min ER2 for two months and have created a top down workspace where I can watch monthly, daily, hourly, 5 min, and 89 tick intervals. My 2 min ER2 workspace also has the 10 min ER2 on it but I've made the 10 min prices invisible and plotted the 10 min MACD on top of the 2 min MACD so I can see both on a single subgraph. Plotting the 10 min MACD this way fills in the 5 2-min gaps between each 10-min interval with a smooth plot - the 10 min MACD has dotted lines and the 2 min MACD solid lines so I can easily distinguish between them.
I'm paper trading a single contract with a simple $200:$300 RR ratio and the winning trades have been in the 70%+ range - examples: 3/7 80% +$500; 3/6 71% $1100; 3/5 73% +$1940; 3/4 100% +$600; 3/1 55% +$1004. (I played with a gap fade, on 2/27 and got killed -$450). On some days a $200:$200 RR ratio works marginally better with ER2.
So far I'm really liking the 3:2 RR and the 2 min seems ideal.
I'm sometimes more aggressive than SPM - like trading a MACD crossover that's still above or below the ZL or even trading a MACD crossover that's trending away from the 10 min MACD. But I only do that when the stars are aligned (like TRIN, PC ratio, TICK, etc. mostly in agreement) - that's increased the number of trading opportunities dramatically.
jimns
See... here we go again, another tweak...What can I say!!!
I've played around with the offset's and have my computer set-up
like this...
1). sma 2 + 1 red
2). sma 3 + 1 seafoam green
3). sma 4 + 1 seafoam green
4). sma 5 + 1 blue
Along with what Trader28 (Macd) teaches, the sma + 1 offsets can be used as a: (sma +1 or +2). I am using +1 offset.
1). entry point when prices cross.
2). exit point when prices start bouncing on the sma's.
3). a buffer zone to watch and monitor.
The SMA's 2,3,4, & 5 are like the "guppy multiple moving averages" that we talked about, around 50 pages ago. Basically
they are short term investors. Some investors trading on the
sma2, some on the sma3, some on the sma4 and some on the
sma5. Using the Sma3 + 1 crossing the Sma5+1 makes for a
nice little crossing system. And used the crossover with the Macd system it is very profitable.
However, the 2 minute YM is a very jumpy chart.
So, I am trying to get the correct chart to use (2 minute/3 minute). The 2 minute on the YM is a very jumpy chart with no
room for error. I am trying the 3 minute YM chart now to see if the 3 minute trends a little better. The 2 minute is a "scalper" time frame and faster than me!!!
Trader28, In my mind your macd system is "good" but were fine
tuning it trying to make it better. And the only way you can do that is by putting it on your computer system and trading it and
watching it and thinking about it and then going, but what if...
Thanks...
snarlyjack
I've played around with the offset's and have my computer set-up
like this...
1). sma 2 + 1 red
2). sma 3 + 1 seafoam green
3). sma 4 + 1 seafoam green
4). sma 5 + 1 blue
Along with what Trader28 (Macd) teaches, the sma + 1 offsets can be used as a: (sma +1 or +2). I am using +1 offset.
1). entry point when prices cross.
2). exit point when prices start bouncing on the sma's.
3). a buffer zone to watch and monitor.
The SMA's 2,3,4, & 5 are like the "guppy multiple moving averages" that we talked about, around 50 pages ago. Basically
they are short term investors. Some investors trading on the
sma2, some on the sma3, some on the sma4 and some on the
sma5. Using the Sma3 + 1 crossing the Sma5+1 makes for a
nice little crossing system. And used the crossover with the Macd system it is very profitable.
However, the 2 minute YM is a very jumpy chart.
So, I am trying to get the correct chart to use (2 minute/3 minute). The 2 minute on the YM is a very jumpy chart with no
room for error. I am trying the 3 minute YM chart now to see if the 3 minute trends a little better. The 2 minute is a "scalper" time frame and faster than me!!!
Trader28, In my mind your macd system is "good" but were fine
tuning it trying to make it better. And the only way you can do that is by putting it on your computer system and trading it and
watching it and thinking about it and then going, but what if...
Thanks...
snarlyjack
Snarly
Here's something else I am playing with to clarify confusing moves with the SPM setup - at 9:56 it's not too clear what SPM is up to on the ER2 but another, complementary setup may be clarifying things. I have a separate 2 min ER2 window with bollinger bands (20,2), kelter bands (20,1.5), and a 12 period momentum index oscillator subgraph. At 9:56 the kelter bands moved inside the bollinger bands. When they come back out, the idea is that the momentum index oscillator will tell whether to go long or short.
Lately, I've noticed this setup has provided good signals when SPM hasn't but, still, overall, SPM provides more quality signals. Yesterday, it clearly called a nice 2:26 ER2 short when SPM wasn't telling us as much (2 min ZLC away from the 10 min MACD and a was bit confusing due to the previous 90 min of 2 min MACD vacillations).
By the way, I'm not playing with YM or ES because I worry that they may be more succeptable to what Elder refers to as "the pros organizing a fishing expedition to run the stops." ER2 seems much more well behaved and predictable to me at this early stage in my trading career.
jimns
Here's something else I am playing with to clarify confusing moves with the SPM setup - at 9:56 it's not too clear what SPM is up to on the ER2 but another, complementary setup may be clarifying things. I have a separate 2 min ER2 window with bollinger bands (20,2), kelter bands (20,1.5), and a 12 period momentum index oscillator subgraph. At 9:56 the kelter bands moved inside the bollinger bands. When they come back out, the idea is that the momentum index oscillator will tell whether to go long or short.
Lately, I've noticed this setup has provided good signals when SPM hasn't but, still, overall, SPM provides more quality signals. Yesterday, it clearly called a nice 2:26 ER2 short when SPM wasn't telling us as much (2 min ZLC away from the 10 min MACD and a was bit confusing due to the previous 90 min of 2 min MACD vacillations).
By the way, I'm not playing with YM or ES because I worry that they may be more succeptable to what Elder refers to as "the pros organizing a fishing expedition to run the stops." ER2 seems much more well behaved and predictable to me at this early stage in my trading career.
jimns
Jimns,
I like the idea of using "bollinger bands" 20/2. They kinda
give you a reference for exactly where you are in the market.
When I first started trading I liked the idea of learning on a
$5.00 a point instead of a $10.00 a point market. But it just
seems to me that their is little follow through on the YM.
Your going along then out of nowhere the market totality changes direction and your kinda saying to yourself where did that come from...
Tell me a little about the ER2 market? I don't know much about it.
thanks
snarlyjack
I like the idea of using "bollinger bands" 20/2. They kinda
give you a reference for exactly where you are in the market.
When I first started trading I liked the idea of learning on a
$5.00 a point instead of a $10.00 a point market. But it just
seems to me that their is little follow through on the YM.
Your going along then out of nowhere the market totality changes direction and your kinda saying to yourself where did that come from...
Tell me a little about the ER2 market? I don't know much about it.
thanks
snarlyjack
Snarly
Of course you know that this whole thread is about ER2 - that's all T28 trades (or talks about trading on this thread anyway). Volume is less than YM or ES but still plenty there to play with. ER2 and ES trade on the CME, YM on the CBOT.
Trade Unit $100 times the Russell 2000 index price
1 point = .01 index points =$1.00
Contract Listing Mar, Jun, Sep, Dec.
Ticker=ER2
Trading Venue: CME® Globex®
Minimum Fluctuation Regular 0.10=$10.00
jimns
Of course you know that this whole thread is about ER2 - that's all T28 trades (or talks about trading on this thread anyway). Volume is less than YM or ES but still plenty there to play with. ER2 and ES trade on the CME, YM on the CBOT.
Trade Unit $100 times the Russell 2000 index price
1 point = .01 index points =$1.00
Contract Listing Mar, Jun, Sep, Dec.
Ticker=ER2
Trading Venue: CME® Globex®
Minimum Fluctuation Regular 0.10=$10.00
jimns
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