The Importance of Simplicity

[Girlpower]

Originally posted by wally_


Thanks Natalie,

I appreciate that. Did you do some theoretical testing as well? I am curious how the theory compares to real life.

wally_

The most back testing I ever did on that was to look back through the last month and by the time I'd written down some numbers for about 2 weeks worth I knew it worked well and just started trading it immediately without any more ado...

Natalie

p.s. those numbers were real life - not theory or backtest.

 

[wally_]

Originally posted by Girlpower


The most back testing I ever did on that was to look back through the last month and by the time I'd written down some numbers for about 2 weeks worth I knew it worked well and just started trading it immediately without any more ado...

Natalie

p.s. those numbers were real life - not theory or backtest.

Cool, thanks again.

wally_

 

[Snosur4]

Originally posted by wally_


Thanks for your post. One of the most helpful I have found on this board so far. Now, I am somewhat surprised that you do not get even 2 trades on the average with your system.

How often do you take trades depending on the time of the day? Do you have any statistics? Are the trades mostly in the morning and then in the last 2-3 hours? Also, I have been thinking about developing a similar system but using the first hour of trading as a starting base, but I guess your first half an hour could be better.

What results are you getting? Average number of points per trade, wins/losses ratio, etc.


I would have to agree with Natalie's results...she is obviously more organized than I am. It is nice to know that someone else
is getting the results that I felt I was achieving.

I also have a simple approach to evaluating a trading system.
If my account is positive that's good, if it's down that's bad.

On average you can expect only 2 trades per day.
Some days maybe 3, sometimes none.

If I am there, I take all trades, using more caution during the lunch time as I mentioned. Most trades happen in the first hour
or two, less frequently mid day, then often getting a big move in the last hour or so.

I am on the west coast...so I often take a break from 9-11 am
go for a walk...wash my cars...mow the lawn etc. If I caught a big move in the morning I might just quit for the day.

As I mentioned in my previous post...if I have taken profits on a portion of my position, I just walk away and let the rest go followed by a trailing stop or maybe a fixed stop locking in a sure profit.

For me, this style of trading fits my personality and beliefs about the market. I am very patient and would rather have 2-3 large trades per week than 10 small trades per day. I abhor research and details....that is why I quit trading stocks....I don't want to spend my time looking for weak or strong, new highs/lows..etc.

Since I am not the "sharpest knife in the drawer" this simple system helps me stay focused and not confused by multiple indicators needing interpretation. If you find something simple that works, and stick with it, you'll make money.

Hope this helps,

Mike

 

[wally_]

Originally posted by Snosur4
I am on the west coast...so I often take a break from 9-11 am
go for a walk...wash my cars...mow the lawn etc. If I caught a big move in the morning I might just quit for the day.

As I mentioned in my previous post...if I have taken profits on a portion of my position, I just walk away and let the rest go followed by a trailing stop or maybe a fixed stop locking in a sure profit.

For me, this style of trading fits my personality and beliefs about the market. I am very patient and would rather have 2-3 large trades per week than 10 small trades per day. I abhor research and details....that is why I quit trading stocks....I don't want to spend my time looking for weak or strong, new highs/lows..etc.

Since I am not the "sharpest knife in the drawer" this simple system helps me stay focused and not confused by multiple indicators needing interpretation. If you find something simple that works, and stick with it, you'll make money.

Hope this helps,

Mike [/B]

Thanks again Mike. I am also on the west coast, but being a very night person, I am struggling each morning, so I have to have a simple strategy because I can't think that early in the morning.
However, I think it could be possible to make this system even better and only a little bit more complex. More about later.

Now, one more question to you guys: have you noticed any correlation between the first half an hour direction of market's move (yesterday it was up, today down) and the direction in which the breakout will happen?

Any statistics? With 300 trades, one could probably get some idea how this works.

My working hypothesis would be that the first breakout is more likely to happen in the same direction as the first half an hour move.

Thanks,
wally_

 

[Snosur4]

One more thought...maybe Natalie will agree..that on a day like today if we don't get a break before the fed announcement, I will cancel all my orders and not play the break on the news. I have had to many bad experiences with the market intially reacting one way then reversing in the opposite direction.

Descretion, in this case, is better than valor IMHO.

Mike

 

[Girlpower]

Originally posted by Snosur4
One more thought...maybe Natalie will agree..that on a day like today if we don't get a break before the fed announcement, I will cancel all my orders and not play the break on the news. I have had to many bad experiences with the market intially reacting one way then reversing in the opposite direction.

Descretion, in this case, is better than valor IMHO.

Mike

Hi Snosur4

It's spoooooooooookyyyyyyy seeing someone say the exact same things. I rarely play the news volatility these days because I've be burned too often. I'm out for the day.... Just watching and waiting.

Good to see your results correlate well with mine.

Natalie

 

[Girlpower]

Originally posted by wally_



Any statistics? With 300 trades, one could probably get some idea how this works.

My working hypothesis would be that the first breakout is more likely to happen in the same direction as the first half an hour move.

Thanks,
wally_

I tried looking at that but could not find a correlation that was reliable enough so I didn't spend too much time looking further...

Natalie

 

[wally_]

But as far as correlation is concerned, I believe (not tested on any reasonable sample) that when the stochastics in 30 min chart (say 15(3), 5) is above 70 before the session opens, it's more likely to get a down breakout, when the stochastics is lower then 30, we are more likely to have an up breakout. As I said, I have not tested it.

 

[Snosur4]

Originally posted by wally_


Now, one more question to you guys: have you noticed any correlation between the first half an hour direction of market's move (yesterday it was up, today down) and the direction in which the breakout will happen?

Any statistics? With 300 trades, one could probably get some idea how this works.

My working hypothesis would be that the first breakout is more likely to happen in the same direction as the first half an hour move.

Thanks,
wally_

Wally....please don't confuse me with the facts.

You may have a point....but it really doesn't matter because whatever way it breaks...that's the trade. The beauty of this system is that you are letting the market dictate the trend not second guessing it.

I think you will find that sometimes the first 30 minutes are up,down and even more often both. There are many reasons for this.....order imbalances....front running by brokers buying/selling the futures before a big buy/sell on stock..program trades based on previous days close etc. But if there is going to be an intraday trend it will usually be established after the first 30 minutes.

Anything can usually be improved upon.....please go for it!

Make sure you share your results with us!!

Mike

 

[Snosur4]

Originally posted by Girlpower


Hi Snosur4

It's spoooooooooookyyyyyyy seeing someone say the exact same things. I rarely play the news volatility these days because I've be burned too often. I'm out for the day.... Just watching and waiting.

Good to see your results correlate well with mine.

Natalie

Natalie......I was adopted.....maybe we were seperated at birth.:eek: