SPM discussions

Quote from chrisofj:

This system back tests well but has some painful losing months. I like seeing these sim trades in real time. If you notice, the idea of a time based exit let this sneak out with some profits on trades that didn't move much. I am experimenting with a maximum dollar loss on day idea to cut the bad losing days but this concept didn't back test that well.

So I'll try to occupy my thinking productively with this system. Only been trying to code and backtest since August.

Meanwhile I am getting used to the idea of first having an overall direction, second having a signal one way or the other, and finally watching 2min bars against the 3SMA+1 to see about getting a nice fill price. As long as I can abandon any concepts fast, I can get some nice trades. As in, all of a sudden there were nice shorts this afternoon.
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Yes, very slippery.

You got to be in front of the screen to trade the SPM.
You can have 1m and 2m charts, trading with the 2m but looking at the 1m to help with entries and exits, especially exits.
Or, use a simple stocastic or RSI to exit. Don't dawdle with the exits, take your profits and wait for next trade. Also, take small losses. This is the greatest impediment for new traders - they "HOPE" the trade will soon reverse and get back in the profit zone again, and hope, and hope, and soon it's a BIG LOSING TRADE.

TAKE THE LOSS AND MOVE ON!

The market will always be there and there will be more trades... the secret to profitable trading is to cut losses and let the profit run. Commission and Slippage for ES is fairly low so you should not be bothered by exiting and reentering.

Haven't found a good 'backtested' exit as yet.
Also, it would help to add a filter or trigger after the SPM trade is setup.
Wish I had time to do some more system development but this is ideal trading environment now for me with such high volatility that I'd rather trade now and develop later when volatility reverts to the norm (VIX below 30).
 
Quote from Jahajee:

Wish I had time to do some more system development but this is ideal trading environment now for me with such high volatility that I'd rather trade now and develop later when volatility reverts to the norm (VIX below 30).
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Speaking of which, Jahajee is one of the few traders around who can trade discretionary and develop profitable automated systems as well.

Those are two very different skillsets, though, and each one takes about 3 or 4 years to develop (same as everything else).
 
Quote from MandelbrotSet:

That's a good question.

As GiantDog said, they are 12, 26, 9.

I've done a lot research on Google since Trader28's SPM for reading price action started up again, and found a paper showing the different optimized settings for the different commodities.

It seems that this is the setting which produces the most consistent results across the board for all the instruements traded, and that is why it is used.

I'll look around to see if I can find the paper.

Regards
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not sure if this is the one you were talking about, but somewhere in it they mention using the same ratio but different settings (something like 34, 73, 25, i think).

hth
 
Not sure about any other newbies but, I sure see a lot of crosses that uncross themselves and appear never to have happened. If you wait for a bar close then this is lessened. I'm not sure what the missing piece is.

Perhaps you either you have to really anticipate the signals and trade out of it if the signal is bad by using a great entry or exit, or you have to wait until one of the God trades is going on and jump on but then don't get shaken out with a too tight stop.

I dunno. Why I'm trading small size. Meanwhile, here is a chart of SPM with all the crosses waiting for bar close.

<img src=http://elitetrader.com/vb/attachment.php?s=&postid=2156085 width=800>
 

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Here is the afternoon.

The other possibility is if one is using this to illustrate some price action you want to trade, then, have to know what that price action really is and wait for it. What it seems best to trade are those occasional "large" swings during the day.

<img src=http://elitetrader.com/vb/attachment.php?s=&postid=2156088 width=800>
 

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A lot of your whipsaw trades could have been avoided by getting confirmation from a higher time-frame.

That's just how price action moves ... try sitting and looking at a screen one day instead of looking for the next trade, and you will begin to see it.
 
Quote from MandelbrotSet:

A lot of your whipsaw trades could have been avoided by getting confirmation from a higher time-frame.

That's just how price action moves ... try sitting and looking at a screen one day instead of looking for the next trade, and you will begin to see it.
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Funny you should suggest that. I decided today that this coming week instead of trying to trade, I will just watch and see what I see past those points of wanting to put a trade on, or close a trade. Maybe I'll spend a week or maybe less, but I think if I can make the connection between those points I can say "wow I should be in this trade already" and what was happening before this moment, I will be better off. This is where using indicators can help because I can trace some more specific things back to what the indicators were doing.

What higher time frame would you suggest btw? I have been using the 10min chart. In the past I have looked at myriad time frames at once, but, I would like to keep things simple if possible.
 
What do you do when you have these types of crossovers? Just tuck your tail between your legs? It seems that there are better odds when the cross overs happen further away from the 0 line? Do you guys feel this way or no? There seems to be a lot of false indications when the cross happens close to the line.

Paul


<img src=http://elitetrader.com/vb/attachment.php?s=&postid=2158642 width=800>
 

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Today I am just watching not trading. I am trying to see if I can "watch" farther then where I was previously getting into a trade (during days last week).

One thing I see is I need to be asking myself "is this a point that in 12 minutes or so was the best entry in what turned out to be a MACD cross or zero line cross". Often I will be asking this during the most "unclear" part of the action.

Those chop zones around the zero line are the most costly when I back tested this. It seemed I was better off just picking one side and sticking with it thru the chop. But I don't know I see those chops as well.
 
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