The Most Profitable SIMPLE Trading Method
- Thread starter ProTrader1
- Start date
i concentrate on futures nowadays, but when i was fooling around with stocks... the put call ratio is a real good indicator, i bet if you buy the market when it goes above 0.9 and hold for 2 days, you will have very good results.... just there isn't enough historical data to test this theory..
on wealth-lab there are a few band based system which is similar in principle... trade the counter trend side on extremes.
can't be simpler than that. but need the steel in the bulls to fish the bottom though.
on wealth-lab there are a few band based system which is similar in principle... trade the counter trend side on extremes.
can't be simpler than that. but need the steel in the bulls to fish the bottom though.
I believe the primary trend is defined by the timescale immediately higher than the timescale on which you are taking the signals you use to try to profit. You may define the trend on that timescale in a variety of ways, trendline, moving average, MACD etc.
Taking QQQ as a current example, if I were using the daily chart for signals I would say we are in an uptrend when we look at the weekly chart. If taking signals from a 30 or 60 minute chart I would say we are in a downtrend because a clear downtrend line can be drawn on the daily. If taking signals from the 5-minute chart I would base my trend decision on the 15 or 30. Then I would say we had two trends today - a non-trend from the opening until about 1:30 and then a downtrend for the rest of the day. Taking signals from the 1 minute, use the 5 minute.
It is very important to recognize there are three trends, up, down and non-trend. If you are in a non-trend let the market tell you which way the trend is going to change up or down. A way to do this is with bracketing entries using stop entries above and below the limits of the non-trend. Similarly, if you catch a trend you should exit when the trend changes into a non-trend as then you do not know whether the trend you caught will resume or reverse. Of course, you would try to exit advantageously during the non-trend meanderings.
Taking QQQ as a current example, if I were using the daily chart for signals I would say we are in an uptrend when we look at the weekly chart. If taking signals from a 30 or 60 minute chart I would say we are in a downtrend because a clear downtrend line can be drawn on the daily. If taking signals from the 5-minute chart I would base my trend decision on the 15 or 30. Then I would say we had two trends today - a non-trend from the opening until about 1:30 and then a downtrend for the rest of the day. Taking signals from the 1 minute, use the 5 minute.
It is very important to recognize there are three trends, up, down and non-trend. If you are in a non-trend let the market tell you which way the trend is going to change up or down. A way to do this is with bracketing entries using stop entries above and below the limits of the non-trend. Similarly, if you catch a trend you should exit when the trend changes into a non-trend as then you do not know whether the trend you caught will resume or reverse. Of course, you would try to exit advantageously during the non-trend meanderings.
It seems AA.... and I think alike regarding trends.
Regarding the original question. I did bit of work last year on trading the an index product simply using adjacent 30 minute bars for signals. Very roughly,
1. Enter in the first 30 mins when the range of the last 30 mins of the previous day is broken
2. Reverse if the other end of that range is taken out.
3. On the second bar, reverse if the other end of the first bar is taken out.
4. After 2 bars are in place draw a trend line connecting their tops (if short) or bottoms (if long).
5. If the next bar closes above (if short) or below (if long) the trend line reverse position.
6. Repeat for successive adjacent 30-min bars.
7. Avoid non-trends (see previous post)
There were a few nuances to handle special situations like outside and inside bars.
It was very profitable when I tested it last year. But just when I was about to trade it, access to the broker of my choice (low commissions) was cut off by the Canadian regulators.
When I recently looked at it again, with the index less than half what it was (hint, hint), it was marginal because of the proportionately larger impact of commissions and slippage.
Not suggesting anyone try it. I just offer it as an example of a very simple system that certainly was profitable under the market conditions of the time.
Regarding the original question. I did bit of work last year on trading the an index product simply using adjacent 30 minute bars for signals. Very roughly,
1. Enter in the first 30 mins when the range of the last 30 mins of the previous day is broken
2. Reverse if the other end of that range is taken out.
3. On the second bar, reverse if the other end of the first bar is taken out.
4. After 2 bars are in place draw a trend line connecting their tops (if short) or bottoms (if long).
5. If the next bar closes above (if short) or below (if long) the trend line reverse position.
6. Repeat for successive adjacent 30-min bars.
7. Avoid non-trends (see previous post)
There were a few nuances to handle special situations like outside and inside bars.
It was very profitable when I tested it last year. But just when I was about to trade it, access to the broker of my choice (low commissions) was cut off by the Canadian regulators.
When I recently looked at it again, with the index less than half what it was (hint, hint), it was marginal because of the proportionately larger impact of commissions and slippage.
Not suggesting anyone try it. I just offer it as an example of a very simple system that certainly was profitable under the market conditions of the time.
THERE IS SOME HELP ON THE THREAD NAMED --STOPS, STARTED BY WHITE. HOWEVER I HAVE NOT FOUND IT AS EASY AS THE EXAMPLE NGH ,WHICH WAS EASY BIG TREND....
Here's one that seems to work but I haven't tested it much. If the True Range on Wednesday is $1.00 and it opens Thursday at, say $18.00, then buy it if the price climbs above $18.40. In other words, buy if the price climbs 40% of the previous days True Range above the open.
If it does work, all one has to do then is figure out all the little niggling details such as stops(fixed or trailing), position size, exit strategy, etc., etc., etc., and it only works during certain market conditions and for certain stocks.
If it does work, all one has to do then is figure out all the little niggling details such as stops(fixed or trailing), position size, exit strategy, etc., etc., etc., and it only works during certain market conditions and for certain stocks.
Originally posted by Magna
The Naz is in a severe downtrend on the weekly chart, a very robust uptrend (since about 10/3) on the daily chart, and was in a trading channel for most of the day today until it broke below the morning low around 2:10, then it was in a downtrend. We shall see tomorrow...
Am I missing something or did one of you seriously contradict the other here??
Magna
Administrator
DATTrader,
Am I missing something or did one of you seriously contradict the other here??
There's an obvious conflict of opinion there and I'm not sure what charts dufferdon is looking at. But when I look at the COMP/NDX/QQQ (all tightly related with almost identical trends) it's clear to me that since the Great Crash in the Nas started around April 2000 we have been in a strong weekly downtrend. After all, the COMP has gone from about 5000 to about 2000 (a decline of a whopping 60% when only 20% is considered necessary to peg it a "bear" market). However, since about Oct 3 of this year we have had a fairly robust rally and so the daily trend has clearly been up. The last few days have been mixed, and I suspect that we will be shortly retracing a fair portion of that rally (subject to Osama Bin Laden "capture euphoria").
Am I missing something or did one of you seriously contradict the other here??
There's an obvious conflict of opinion there and I'm not sure what charts dufferdon is looking at. But when I look at the COMP/NDX/QQQ (all tightly related with almost identical trends) it's clear to me that since the Great Crash in the Nas started around April 2000 we have been in a strong weekly downtrend. After all, the COMP has gone from about 5000 to about 2000 (a decline of a whopping 60% when only 20% is considered necessary to peg it a "bear" market). However, since about Oct 3 of this year we have had a fairly robust rally and so the daily trend has clearly been up. The last few days have been mixed, and I suspect that we will be shortly retracing a fair portion of that rally (subject to Osama Bin Laden "capture euphoria").
Its seems to me that the simple system are the best. All I do is trade with the market "gauged by S&P and naz futures" look for higher highs and lower lowers, and lookout for s/r lines that are counter to the trend. In a trading range look for extreme moves and go counter to the range. The hardest part is to tell when the trend has changed. I know this is of no great insite, but you can't beet the basics.
White
White