The Importance of Simplicity
- Thread starter Corso482
- Start date
Yes, I do hang on even when the bands get pierced if the stochastics are doing well. Otherwise my trades would tend to be 3 minutes in length.
It is one thing to describe a system on paper. A whole other thing to be trading it. There are so many little variables that come into play.
For an MA xover system, you really have to stick with it. You have to take every trade, since these types of systems (without filters) get about 30-35% profitability. So you can't miss a good one or it really sets you back. And it's those few really large profitable 'homerun' trades that make it work. I think most traders can't emotionally handle losing that much of the time, so in practice many people can't trade it.
I just wrote a program to trade it mechanically and that enables me to bypass the emotional aspect. Without the program, I couldn't do it.
I'd like to see some backtesting data on this MA crossover system. I have never seen one that made money on the S&P, but maybe the big swings we are now getting have changed that.
SIMPLICITY is best. A simple ma (trend) and time and sales(order flow) for 80% of my trades. The key is knowing HOW to trade rather than relying on a multitude of indicators.
quote:
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Originally posted by Girlpower
My approach to ES is about as simple as it gets.
Using 15 min bars. after the first 1/2 hour, if it's going out of the top of the bars before go long, if the bottom go short. Run a trailing stop.
Natalie
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And where is your stop-loss to begin with?
Thanks,
wally_
__________________
Wally....
I trade a system very similar to Girlpower but based on years of observation have made the rules a bit more specific.
For what it's worth here they are:
I use a 3 min chart.
Never ever trade before 10:00 EST
Always take every trade...never ever...ever pay any attention to any indicators ma's, stochs, rsi whatever.
Mark the low and high of the regular session during the first 30 minutes waiting and including any reaction to the usual 10:00 am
numbers, sometimes this means extending your waiting period to
10:03.
For the NQ enter a long/short position on a stop 2 points higher/lower than the 30 min high/low with a 4 point stop.
my experience is that after the breakout...you seldom get more than a 2.5 point retracement intially.
For the ES same rules except a 1 point breakout with 3 point stop.
If what I call a "false breakout" occurs...ie hits my stop then goes maybe only 1-2 points in my favor then retraces back into my
30 min "neutral zone" I will only re-enter in that same direction if the new high/low is violated by 2 points NQ or 1 point ES.
Exits are a bit trickier...the purest way is probably trailing stops but you can get more specific if you like.
Using the ATR of the NQ about 35 points or the ES maybe 25
you can subtract the 30 min range from that and target the remainder or I can tell you that on average the NQ will move about 9 points after the breakout and the Es about 7.
Remember it often reverses and you get a breakout to the opposite side. You can expect 1.8 trades per day with this type of system.
This is what I do: I trade multiple contracts usually on the NQ.
I will take profits on half my position when I get only 3 points of profit leaving my original stop on the rest. I do this because about 90 % of the time if the trend is not going to continue it will
move about 3 points initially in my favor then reverse. If the trend continues I will trail the stop usually manually by observing
the market structure. Sometimes I will scale out if I feel that it is running out of steam.
The exits are the only discretionary part of this system and does take some time to develope a "feel" for what is going on.
The only other rule I have is that I manage very closely any lunch time breaks..I take them....but tighten up stops maybe take profits sooner.
The advantage of this system IMHO are that it keeps you out on trendless days and enables you to capture the big moves, and prevents over-trading.
Hope this helps.
Snosur4
--------------------------------------------------------------------------------
Originally posted by Girlpower
My approach to ES is about as simple as it gets.
Using 15 min bars. after the first 1/2 hour, if it's going out of the top of the bars before go long, if the bottom go short. Run a trailing stop.
Natalie
--------------------------------------------------------------------------------
And where is your stop-loss to begin with?
Thanks,
wally_
__________________
Wally....
I trade a system very similar to Girlpower but based on years of observation have made the rules a bit more specific.
For what it's worth here they are:
I use a 3 min chart.
Never ever trade before 10:00 EST
Always take every trade...never ever...ever pay any attention to any indicators ma's, stochs, rsi whatever.
Mark the low and high of the regular session during the first 30 minutes waiting and including any reaction to the usual 10:00 am
numbers, sometimes this means extending your waiting period to
10:03.
For the NQ enter a long/short position on a stop 2 points higher/lower than the 30 min high/low with a 4 point stop.
my experience is that after the breakout...you seldom get more than a 2.5 point retracement intially.
For the ES same rules except a 1 point breakout with 3 point stop.
If what I call a "false breakout" occurs...ie hits my stop then goes maybe only 1-2 points in my favor then retraces back into my
30 min "neutral zone" I will only re-enter in that same direction if the new high/low is violated by 2 points NQ or 1 point ES.
Exits are a bit trickier...the purest way is probably trailing stops but you can get more specific if you like.
Using the ATR of the NQ about 35 points or the ES maybe 25
you can subtract the 30 min range from that and target the remainder or I can tell you that on average the NQ will move about 9 points after the breakout and the Es about 7.
Remember it often reverses and you get a breakout to the opposite side. You can expect 1.8 trades per day with this type of system.
This is what I do: I trade multiple contracts usually on the NQ.
I will take profits on half my position when I get only 3 points of profit leaving my original stop on the rest. I do this because about 90 % of the time if the trend is not going to continue it will
move about 3 points initially in my favor then reverse. If the trend continues I will trail the stop usually manually by observing
the market structure. Sometimes I will scale out if I feel that it is running out of steam.
The exits are the only discretionary part of this system and does take some time to develope a "feel" for what is going on.
The only other rule I have is that I manage very closely any lunch time breaks..I take them....but tighten up stops maybe take profits sooner.
The advantage of this system IMHO are that it keeps you out on trendless days and enables you to capture the big moves, and prevents over-trading.
Hope this helps.
Snosur4
Have you noticed that in 95% of cases the 30 min bars have an overlap in price of usually =>1.5? If the first closes on high or low and continues straight on, it mostly comes back for the overlap and gives a better opening opportunity. Rare this doesn't happen at the extremes.
Natalie
Natalie
The attached spreadsheet was generated from TradeStation. It goes back to 2/12/2001. I've backtested the 40/10 ma xover to 1997 and it has been profitable over the entire range. (Be sure to look at the tabbed pages in the spreadsheet to get more details.) I had to remove some of the data (like each individual trade detail) so the spreadsheet would be small enough to attach here.
When the little turtle crosses over the big turtle at lunchtime, I always order turtle soup. Break out the oyster crackers, hmmm I need a new tie, spilt so much soup on this one it's starting to fade.