Trading by Appointment

[Sophomore Jinx]

After reading a recent popular thread by Quah, I became very interested in the concept of 'trading by appointment' - choosing to trade only at certain times or bars during the day. There are obvious pros and cons to the idea, both pragmatically and philosophically.

I'd like to get some input on whether trading by appointment can actually work. Anybody doing this successfully?

 

[Sarasota]

Originally posted by Sophomore Jinx
After reading a recent popular thread by Quah, I became very interested in the concept of 'trading by appointment' - choosing to trade only at certain times or bars during the day. There are obvious pros and cons to the idea, both pragmatically and philosophically.

I'd like to get some input on whether trading by appointment can actually work. Anybody doing this successfully?

I use bar counts in addition to Gann, and a little bit of fib here and there.

 

[vladiator]

Originally posted by Sophomore Jinx
After reading a recent popular thread by Quah, I became very interested in the concept of 'trading by appointment' - choosing to trade only at certain times or bars during the day. There are obvious pros and cons to the idea, both pragmatically and philosophically.

I'd like to get some input on whether trading by appointment can actually work. Anybody doing this successfully?

I only trade at two certain time windows during the day comprising about 20 minutes total. Those windows were chosen for their particular properties. Seems to work quite well, thank God . And I don't have to spend hours and hours staring at the screen.

 

[Sophomore Jinx]

Thanks for the reply, help me understand here. What are your counts based on? Gann or fib numbers?

 

[Sarasota]

Originally posted by Sophomore Jinx
Thanks for the reply, help me understand here. What are your counts based on? Gann or fib numbers?

neither - higher highs and lower lows.

In this case, 12 lower lows, and then 12 higher highs. It is a tool I use in addition to Gann. I would never, ever trade just off this tool, but the 100% bar count is very accurate as you can see in the chart.

 

[Sophomore Jinx]

Thanks also for the response. That idea is very attractive. Could you elaborate a little more how you arrived at your destination? Did you design your system in advance? - i.e., "I would like to trade in two time windows, about 20 minutes total, using X and Y indicator. Let me see which times work best for what I want to do."

 

[Sophomore Jinx]

I'm still a little dense over here!

So if I understand correctly, you're not trading as per the clock - i.e., "I will now take my 10:33 AM trade" - rather, you're counting the number of new highs or lows, and on/after the 12th one, putting on your trade.

 

[vladiator]

Originally posted by Sophomore Jinx
Thanks also for the response. That idea is very attractive. Could you elaborate a little more how you arrived at your destination? Did you design your system in advance? - i.e., "I would like to trade in two time windows, about 20 minutes total, using X and Y indicator. Let me see which times work best for what I want to do."

I had a hypothesis that those times would be best given the microstructural evidence of prior studies and the theories of how information is incorporated into prices etc etc. (e.g. a number of studies show that the overwhelming majority of daily returns are attained within the first few hours of trading, the U-shaped spreads and volume patterns observed intraday etc). I developed the strategy and tested how it performed with different entry/exit points. Indeed, the time windows I expected to work the best worked the best.
Hope this helps.

 

[Sarasota]

Originally posted by vladiator

I had a hypothesis that those times would be best given the microstructural evidence of prior studies and the theories of how information is incorporated into prices etc etc. (e.g. a number of studies show that the overwhelming majority of daily returns are attained within the first few hours of trading, the U-shaped spreads and volume patterns observed intraday etc). I developed the strategy and tested how it performed with different entry/exit points. Indeed, the time windows I expected to work the best worked the best.
Hope this helps.

I am just the opposite. The first hour is more difficult for me.

 

[Sophomore Jinx]

Vlad - so let me try to recapture your process.

1. You created an initial strategy that gave you a general edge.

2. You filtered it through those studies about market performance and determined it would be best to trade during the "U-shaped" times of day.

3. You then went microscopic and identified very precise time windows that offered statistically favorable probabilities for trading your method.

This is similar to what I've been thinking as well. Test, research, and find certain time windows where there's increased probability. THEN, from that, derive some kind of "trading by appointment" strategy. Sort of, "I'll let the market tell me when is best to trade."

But others, like Quah and Sarasota, seem to be using methods that appear to start out with an idea about time - a sequence of bars, or a time grid - and would then, at those precise times or bars, use other indicators to tell them whether to go long, short, etc. And this seems to work as well.

I'm intrigued that neither Vlad or Sarasota has mentioned using an appointment strategy primarily for psychology/disciplinary reasons, which would seem to be an added benefit of trading that way.