Nice pop in the DIA/JJC (Dow/Copper) spread today and all month long for that matter.
The ACD Method
- Thread starter sbrowne126
- Start date
I totally agree with the latter statement John. Also alot of the time using hard stops can be tough with mean reversion approaches because momentum will be against you almost immediately entering into the trade. So you can shaken out of trades many times. I've tried using time stops with some mean reversion approaches and it does improve profitability, but you have a higher exposure to tail risk. Believe me I've gotten caught in trades that can wipe out profits from a few days! Profit potential is usually capped, so its more of a steady flow of decent trades and then some horrendous ones that make you want to yak! lol Definitely can be a grinding way to make a living lol
I think you have shown us that the price action trader is the best of all worlds. You do a combination of reversion and momentum , but things are always in context and always looking at the big picture. Also a price action trader can see when one side is trapped and use the opposing technique to take advantage
. Very hard for a machine to do this, so this edge will last far into the future. Well unless a Simon's or somebody develops a neural net that has self awareness and can peform like a human....don't think that will happen anytime soon lolQuote from Shanb:
I totally agree with the latter statement John. Also alot of the time using hard stops can be tough with mean reversion approaches because momentum will be against you almost immediately entering into the trade. So you can shaken out of trades many times. I've tried using time stops with some mean reversion approaches and it does improve profitability, but you have a higher exposure to tail risk. Believe me I've gotten caught in trades that can wipe out profits from a few days! Profit potential is usually capped, so its more of a steady flow of decent trades and then some horrendous ones that make you want to yak! lol Definitely can be a grinding way to make a living lol
I think you have shown us that the price action trader is the best of all worlds. You do a combination of reversion and momentum , but things are always in context and always looking at the big picture. Also a price action trader can see when one side is trapped and use the opposing technique to take advantage
Simons isn't going to live forever.
A good price action action trader can see things that no chart, no fundamentals or machine can see. So if one can learn that skill, there is a long long edge that can't be taken away. I hope in 2012 to hone this skill better through these ETF spreads.
Gold is at the 3rd Standard deviation of the bollinger band on the daily. This doesn't happen that often. I am sure there are some bottom pickers that are taking heat right now!
I made an indicator in TOS that looks at the ATR of the past n periods and plots a standard deviation band on top of that. So you are essentially looking at when volatility is getting stretched to extremes or even when it is contracting...this can lead to a good breakout trade.
A two std deviation move for one day in Gold landed us at 1577 for today. The low was 1565. Using this approach, you would have to scale into the position and expose yourself to potentially large heat to make 20 handles or so. The trend move was alot larger tho and provided none of the tail risk that the reversion trade did!
I made an indicator in TOS that looks at the ATR of the past n periods and plots a standard deviation band on top of that. So you are essentially looking at when volatility is getting stretched to extremes or even when it is contracting...this can lead to a good breakout trade.
A two std deviation move for one day in Gold landed us at 1577 for today. The low was 1565. Using this approach, you would have to scale into the position and expose yourself to potentially large heat to make 20 handles or so. The trend move was alot larger tho and provided none of the tail risk that the reversion trade did!
Quote from Maverick74:
Simons isn't going to live forever.
A good price action action trader can see things that no chart, no fundamentals or machine can see. So if one can learn that skill, there is a long long edge that can't be taken away. I hope in 2012 to hone this skill better through these ETF spreads.
Nice, Ya i like how you look at these spreads. Really gives a good picture of relative strength and weakness...really helps a guy like me. Helps to give perspective and provide context to the bigger picture.
A level is a level till it gets broken.
Long again 95.44 . out 96.03 Pretty predictable box 95.40 to 96.12., since 11.20 am.
Long again 95.44 . out 96.03 Pretty predictable box 95.40 to 96.12., since 11.20 am.
Yes I am sticking with my earlier stuff and doubt I will ever change that. Ichimoku is really extremely simple and is just another way of calculating support and resistance levels. I have found when ACD/my stats and ichimoku levels are in agreement the odds of a good trade are extremely high. Actually I haven't had a losing trade yet since I started trading this way about a month ago! Of course for me that is only like 8 trades lol. I've had 2 breakeven and 6 winners of 2x risk or greater.
A forex broker released some stats on their traders. The japanese traders had a much much higher success rate that everyone else and the majority of japanese traders use ichimoku. Thats what got me on it in the first place.
Anyways sorry to derail. Just something i've been looking at.