The Importance of Simplicity

Originally posted by wally_
Natalie and Mike,

Natalie,
is your entry method the same as Mike's, that is 1 pt above/below or do you enter just one tick above/below, which what I would probably do, getting even more wipsaws on a day like today.

I am thinking about some modifications and of course I will share them with you in due time. I first need to see how they would work. I will paper trade first.

Now, today was a scary day, hard to handle, it's good it happened before I started using this method, so I really know what the extremes could be like.

Thanks,
wally_
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Wally,

When I get a break out of the range I hesitiate a bit, and think about it, then I do what I'm supposed to, which usually means I'm about a point behind the signal.

Also, using the 15min charts, and my stops, if it is a false break out, I get the opportunity to reverse based upon being stopped out and a new trend showing up in the bars and I follow that. Get's me in the other way well before the range is hit. The probabilities are very high of a breakout the other end if it fails in one direction...

The 15 min bars then keep on confirming your direction and you get out when they fail.

The basic principle is to simply get pointing the right way around and let the market do the rest. If the first try is wrong then the other is usually very right indeed.

Days like yesterday and today I stay out anyway, because there is no point trying to get blood out of a stone and taking on a higher risk of failure than I need to.

I think half of the trick is to know when not to trade rather than when to do it...

Natalie
 
Originally posted by Girlpower


I think half of the trick is to know when not to trade rather than when to do it...

Natalie
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Well said and thanks for the other piece of advice as well.
 
Originally posted by wally_
Well, the question is how often do you get swings that violent as today? Probably not that often, so this does not have to be relevant. For a method to work it has to be selective, I believe. You cannot have a universal method for every situation, but you can have a bunch of them, each for a particular setup.
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Perhaps "ramp" was the wrong word. Trends can begin toward the low of the range as with H&S bottoms, double and triple bottoms, 2Bs and so on. They may take a while to get back to the high of the day before "breaking out", if they ever do. Which is why I wondered if Sno was placing his buystop above the top of each succeeding downbar rather than waiting for a new high.

--Db
 
Originally posted by dbphoenix


Perhaps "ramp" was the wrong word. Trends can begin toward the low of the range as with H&S bottoms, double and triple bottoms, 2Bs and so on. They may take a while to get back to the high of the day before "breaking out", if they ever do. Which is why I wondered if Sno was placing his buystop above the top of each succeeding downbar rather than waiting for a new high.

--Db
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--Db

I'm using reversals to catch just that sort of thing - see above.

Natalie
 
You people are making me think too much:confused:

Draw downs etc: I don't keep good records but I seldom have a down week.

I guess I have more rules than I thought and it is good that you are making me articulate them.

I would not have taken that last long trade today on the NQ for 2
reasons: #1 it was only about 15 min before the close.
#2 it was to near the top of the average ATR for the NQ
which is about 35 points. The low being 1033 an
entry @ 1066.5 would only leave an expected
2 points.

Days like today are rare and Natalie wisely chose to stand aside.
I did take the short trade after things had settled a little.
I was filled @ 1041.5 stop @ 1045.5 covered half @ 1038.5 moved stop to breakeven on rest, which was hit.

The average range for the first 30 minutes on the NQ is about 15 points,ES = 9 points so the expectancy for the method is about 20 NQ points and 16 ES points.

Now remember these are AVERAGES and these points could be on either side of the range on the same day. I think you will find that on most days the market will find a bias on one side or the other.

The only other method I have considered would be a SAR on a failed break noticing that it often retraces to the other side of the range.

Mike
 
Originally posted by Snosur4

The only other method I have considered would be a SAR on a failed break noticing that it often retraces to the other side of the range.

Mike
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Very good points, Mike... about the ATR and the SAR. Thought about the same things, especially the SAR on pullbacks and even more along these lines. I will return to this later. Need to give it some more thought. I think I am very close to having a power system along the lines discussed here, but with some additional elements that I will elaborate on later on, some time this week.

Now, some request, if you guys don't mind: I need daily data (high, low, close for the daily sessions) for the last ES contract (September one). I am testing some very simple system that seems to be quite promising, but it's too early to say anything more about it. Need more data to backtest it.

Thanks,
wally_
 
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. Turnarounds in trend later in the day are pretty obvious too. I might not pick up the 'best' moment to buy/sell, but usually being in the right direction makes for pretty consistent profits. 30 min bars confirm it too.

Exits, sometimes a support/resistance line crossover, sometimes a 9 or 18 SMA on a 5 min chart, sometimes even just the bars themselves failing and reversing. Not exactly rocket science, but it works well enough. (yeah! tried all the rocket stuff and just ended up confused...) :)

Fast moving markets I reduce the size to 10 or 5 and do the same. Slow sideways days are days off doing something else...

Natalie
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>>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.

I don't quite get what you mean. If it's going out of the top of the bars before go long?? Would you clarify this please? thanks.
 
Katrina,

Girlpower of course has the final word here, but I think she is saying that after the first two 15 minute bars, if the third bar is breaking the established high, she gets long, and vv for shorts.

:)
 
Originally posted by inandlong
Katrina,

Girlpower of course has the final word here, but I think she is saying that after the first two 15 minute bars, if the third bar is breaking the established high, she gets long, and vv for shorts.

:)
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Thanks Inandlong,

That's exactly what I'm saying - you probably phrased it much moreclearly than I :)

Natalie
 
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