Time Stop for cycle completion

T

tradingbug

I was wondering if others have gone down this path and was wondering how they have or have not implemented time stops after entry.

I believe that markets are cycle oriented and was pondering on having a time stop. Essentially, after I enter the market(ES), i look for the cycle to complete in a certain time period. If the timestop goes off and part of the cycle that you are looking to be completed is not fulfilled, I have the possibility of either reversing or exiting(both which seem better than holding).

I was wondering if this is useful, transfereable across markets, or if i should throw it in the toilet.

Any thoughts would be appreciated.
 
Quote from tradingbug:

I was wondering if others have gone down this path and was wondering how they have or have not implemented time stops after entry.

I believe that markets are cycle oriented and was pondering on having a time stop. Essentially, after I enter the market(ES), i look for the cycle to complete in a certain time period. If the timestop goes off and part of the cycle that you are looking to be completed is not fulfilled, I have the possibility of either reversing or exiting(both which seem better than holding).

I was wondering if this is useful, transfereable across markets, or if i should throw it in the toilet.

Any thoughts would be appreciated.
More...
John Ehlers has written a lot about determining the dominant cycle length or whatever he calls it. You can check out the free info on his website here:

http://www.mesasoftware.com/papers.htm

As always, caveat emptor, and good trading.
 
Fibonacci time projections taken from several minor & major swings; where the fib. ratios cluster will give you an idea of future highs/lows.

Robert Miner's book, "Dynamic Trader" explains their use well.
 
I find that a time stop strategy and a reversing strategy are not compatible unless the market dictates to you the signal for the time stop strategy.

Generally, all high performance strategies are based upon the market being in control of the reversal timing. Reversal timing is not usually based upon direct signals signals from price nor time but rather reversal timing is based upon signals more closely related to the active human component of the market.
 
The element of time can be useful. I have developed a system for analyzing the MFE and MAE of a trade as it progresses. If you could do the same and see some very strong evidence that your trades should produce X profit in Y amount of time or else it'll probably end up a loser, then you may be able to cut your losers shorter sooner. It is rare to find a very strong evidence like this but the concept may get you thinking.

precise paths revisited:
http://www.elitetrader.com/vb/showthread.php?s=&postid=581277&highlight=precise+paths#post581277
 
Thanks for the links and replies. Let me be more specific to what I was thinking. I enter on pullbacks of the dominant cycle(determined by longer timeframe). After entry I look at time, price, volume, and the current cycle status that I am entering for and looking for a profit. Time, price, and volume make a formation after a certain period of time that I think can be categorzied by where the market is in its cycle(could be wrong here). From this formation/cycle position, I have the option to hold, sideline, or reverse.

Grob109 made reference that time stop/reversing should not be made unless the human factor(i think this is volume) overrides to indicate a reversal. Otherwise, sideline is the better option than sideline/reversing. If I am wrong, please correct me.


SethArb, have you made use of mark fischers time stop strategy in his ACD method? My freind swears by the ACD method. I will take the time to read it.

Thanks again.
 
Quote from opmtrader:

The element of time can be useful. I have developed a system for analyzing the MFE and MAE of a trade as it progresses. If you could do the same and see some very strong evidence that your trades should produce X profit in Y amount of time or else it'll probably end up a loser, then you may be able to cut your losers shorter sooner. It is rare to find a very strong evidence like this but the concept may get you thinking.

precise paths revisited:
http://www.elitetrader.com/vb/showthread.php?s=&postid=581277&highlight=precise+paths#post581277
More...

Thanks. I am looking through it now. What you posted above is exactly what I was thinking about.
 
if i except a breakdown or breakout at a certain time (that time derives from my cycle calculation), and exactly at that time or slightly afterwards the market starts moving the other way, then it is likely that the original move i expected will not occur. so i should either get out or perhaps reverse.

in other words: the cycle points indicate that a stronger move is likely to happen at those times. it may not necessarily be in the direction you anticipated. but, it is very likely that a significant move WILL occur at that time, one way or the other. so the cycle points serve more to say "it's gonna move now" but not necessarily indicate the direction. in other words it may validate or negate the price pattern you're predicting. but it will do so at the cycle point.
 
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