The Importance of Simplicity

I know you didn't ask me but I just stumbled onto this thread and trade a very similar method. Using the high from the last 15 min bar I took the long on a 1 pt breakout at 34.25 however was afraid it might retrace(as it did) so after seeing the next 5 min bar post a lower high I exited when the low of that bar was violated which was 33.35. I then drew a retracement on the 1st 6 5 min bars or 30 min. with 61.8 being about 29.5 I took another full position at 929.5 on the pullback and set a stop just under the lo at 27.25. I took 2/3 at 3 pts or 32.5 as it was close to lunch and figured I'd let the remaining 1/3 ride to stop. However then after lunch around 1:30-2:00pm seeing that 30-31 support area holding I went back to full position at 32.5. I took some off at 35.5 and at 36.5 and currently have 1/3 with no risk left, hopefully I'll get around 40 but who knows, may take a early exit but gonna give it some room.

It's been a pretty boring day but looks like it'll at least in the green.
 
Quote from toby400:

Snosur4,

Todays action on the emini sp......how would you have traded your system based on the first 30min rule?

I ask so that I can more easily picture your system in operation.

Regards

Toby
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Toby

I did go long on at the first break at 10:04 and was filled at 933.75. At this point I manage the trade very carefully noticing if the NQ is following and making a break as well. Also is the Tick heading higher and is the TRIN heading lower?

In this case none of the above was true. The price quickly reversed so I bailed at 10:13 for a small loss @ 933.25.

This would have been a good place to reverse for a short. A strategy I am considering implementing in the future.

The next breakout I could have entered would have been at the new high of 936.25 (one point above the previous high) but the market had been so bland and it was a Friday after a strong up week and the previous days high was just above that at 937 so I decided to pass.

I thought that would be a good place to short though after it failed to break above the 937 level so i went short at 935 peeling
of contacts on the way down to my target of 930.

I don't often trade in the range....but sometimes the risk/reward, like in this case, is to tempting to pass up.

I was pretty certain that we would see a late day sell-off. I am surprised though, that it was not more severe.

Hope this helps,

Mike
 
Mike's approach is definitely improved on days like today with the incorporation of a reversal strategy. I was able to pull 17.5 NQ pts out of a day with only a 25 pt range. Otherwise, I would have ended at BE at best.

--Db
 
Would it be possible to put some data together to illustrate what kind of improvement? I've been considering investigating the typical AM reversal as a kind of swing point and trading it that way, to make use out of the "false breakout" scenario when it occurs. Seems it happens enough to be worth looking into...
 
Quote from Sophomore Jinx:

Would it be possible to put some data together to illustrate what kind of improvement? I've been considering investigating the typical AM reversal as a kind of swing point and trading it that way, to make use out of the "false breakout" scenario when it occurs. Seems it happens enough to be worth looking into...
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I don't see how. There are too many different triggers that traders use for trading reversals. All I know is that trading Mike's strategy with my usual tweaks (or my strategy with his tweaks - whatever), I would have wound up with nothing today.

--Db
 
Quote from dbphoenix:

Mike's approach is definitely improved on days like today with the incorporation of a reversal strategy. I was able to pull 17.5 NQ pts out of a day with only a 25 pt range. Otherwise, I would have ended at BE at best.

--Db
More...

Db...

Great trading! I did reverse today on the NQ @ 1129 when it broke the uptrend line on my 3 min chart but trailed it a little to close and was stopped out @ 1124.

Actually I guess I didn't really reverse because I never took the long breakout in either the ES or NQ for the same reasons I mentioned last Friday.

I did though, go short the ES at the downside break , filled @ 926.5 on a stop set for 926.25 and picked up only 3 points.

Figured we were in for another range bound day when it failed to follow through so decided to go for a bike ride.:cool:

I am becoming more comfortable with the idea of reversing into a failed break and may incorporate that as standard procedure into my method in the future.

I'm glad you did so well and thanks for all your insightful input.

Mike

P.s. does anyone use esignal? How can I put my TRIN and TICK as a study on my chart in a lower frame...you know like a RSI and I would also like to add a moving average to it. Right now I have them as separate charts but think it would be cleaning the other way.......thanks.
 
I must agree with simpler is better. My own trading only took a turn towards profitability when I started trading less stocks and less sectors. I think as people we are socialized to believe that hard work=money, and concurrently more complex=smarter. Which follows of course then that smarter=better in the eyes of our peers.
In actuality this does not really work in trading. The more data you look at, the more prone you are to taking trades that are outside of your trading plan. You will start finding things that "might" fit or "almost" fit the criteria for a winning trade. You'll pick mediocre setups everytime because you have so many to choose from. From this you will get mediocre results.
When you focus on less data and less possible candidates for entry, you are forcing yourself to let the market come to you. The best traders trade this way. (IMHO). They don't look for opportunities, but rather set the criteria and wait. Alerts are set, then triggered. Entries are made. A certain percentage of those yield winners, and a certain percentage of those get stopped out. If the Sharpe ratio is greater than 1, you make money.
Its really that simple.
 
Not a bad day. Wound up with 8.5 NQ, but it took four trades to get there: 2 BEs, a -5, and a +13.5. Haven't decided whether or not to trade tomorrow.

--Db
 
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