Simple System for Beginners

Quote from Quah:

Samson77 -

I'm suprised you missed the extreme sarcasm in my post.

(ah, I see you werent around the last part of 2002. Nevermind then...).
More...

A whole new bunch of people, Quah :D

Anomaly, if you want your system to attract attention, you're going to have to create a whole new jargon set along with several thousand pages of explanations. Only then will the desperate cling to you like a liferaft.

Good luck to you.
 
I applaud anyone who would post a method on elitetrader. I remember reading something about this method in one of Larry Williams books, i can't remember which one right off the top of my head but it jogs my memory and i remember thinking it was an interesting concept.
As i remember he didn't use the 1:00 he just used a little over 1% move on the day whenever it hit to go long or short from.
Nice post....i look forward to reading more.

pierson
 
Actually, believe it or not, the system has merit. We tested something like this a couple of years ago and got fairly good results back then. Its very useful for all kind of traders. There are very solid underlying reasons why the system works.

Very good post, nobel intentions!

Cheers,
 
Quote from AnomalyResearch:

The purpose of this thread is to present a simple system for beginners to trade stock index futures.

We will use the emini Russell2000 "ER2" Globex contract.
Its value to the trader is $100 per full point per contract.
It trades in .10 increments so each tick is worth $10.
If you trade with InteractiveBrokers your round turn commission is about $5.00.

To keep our risk low, we will only enter trades for the afternoon session. So Rule #1 is:

1). WAIT until 1:00 Central Standard Time.

The entry technique to use is a simple breakout method with which we look to catch an afternoon trend.
We will take a move either long or short whichever comes first.
The signals are derived by looking at moves AWAY from the day session opening price. This method is sometimes called "Opening Range Breakout". It has been "around" for many years. I first used a variation of it in 1989 on the S&P500 pit traded contract.
Larry Williams used a variation of it on the 30yrBonds and the S&P500 to pyramid $10,000 to over $1,000,000 to win the Robbins Trading Championship in 1986.

For this thread we will calculate the signals as follows:

2). Multiply the opening price of the day session by 1.0033 to get the buy signal.
3). Multiply the opening price of the day session by .9967 to get the sell short signal.

At 1:00 enter a buy stop at the buy signal price and a sell stop at the short sell signal price.
If the market is already past either signal it will become a market order with immediate execution. The remaining unexecuted stop is your stop loss. If the market is trading in a narrow range neither side may be executed and you may have no trade for the day. If your stop loss is hit you are done for the day. You will simply ride the position untill 3:00 pmCST and exit at that time.

4). Exit trade at 3:00pm if not stopped out.

Thats it.
More...

where do 1.0033 & 0.9967 come from??
 
On this method, is there any time you stop looking for entries? For example if it gets to be 2:56 and you would exit and 3:00 would you still take it? How long have you been watching/trading this method for?

I went through and tested this method by hand on the nq for July and August...i'm sure i'm off by a few points because it was just a quick hand backtest.

July -23 points
August +48 points

I wonder how the performance on the NQ compares with other markets. I will try to go back and see how it did on a couple more months if i get some time this week.

Thanks,

Pierson
 
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