Woodies CCI

"The real negative in trying to follow or use his methods, is when they don't consistently work, he won't admit it! "
- zx12

This is true, but there is also another thing I have noticed - that pretty much a failed pattern has another named pattern as it's opposite.

That being the case, there is ALWAYS a named pattern that will be successful - the problem is the pattern you were watching just before it may have been the one you just put your money on, and the pattern that turns out to be "successful" is touted as a winner and proof the system works....

I think it would be better to label, say, a bad ZLR as "A Failed ZLR" rather than give it a name that can later be ascribed "A Successful Famir" trade or some other such nonsense.
 
Quote from ssternlight:

I agree with most of the above and just want to clarify that the way I believe he makes money is through his seminars and referral fees from various software providers. He is a marketeer.

I sincerely doubt that he ever made a living as a trader much less a "CCI" trader. If someone can point to proof otherwise, I will be happy to retract what I have said here.
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In the pre-big group days when he called his trades live Fitzy used to track them and he was winning a lot then. Fitzy doesn't love Woodie enough to lie about that.

CCI was much simpler then - more like what Goinglite does in Interesting Charts. Personally I don't think Woodie is a true vendor - he enjoys the bucks he gets from referrals etc but I doubt he's making a huge income from all that stuff. I think its more that he actually wants to satisfy (and be liked and admired by) his group of newbies. He enjoys it. And its damned hard to teach people to trade in a large group --- some will succeed and some will be using CCI in some way but most won't.

All those new patterns developed over time in an attempt to make it simpler or make more sense or more interesting maybe. Also as the US markets lost volatility it became harder for a newbie to make money on things like the zlr.

At least he runs a free room where people enjoy themselves and some (finally) come out as successful traders. Sure gets a lot of enemies though :)
 
<i>"How can you beat free? Just keep in mind his methods do not work quite as well as..."

Time and effort -- not to mention losing money -- have value. That is no "free" lunch. I won't go into all the erroneous assumptions about trading for a living that are being bandied about there. If you're sincere and not a shill I would suggest you take a look at the subjects of risk, opportunity costs, and do some basic math on what kind of consistent profitability it takes to make a decent living.

Snake oil pure and simple...</i>

In defense of Woodie's teachings, it is purely a reversal-type approach. Buying and selling price turns is the primary objective of all the myriad patterns, from what I've seen in the past.

Those general tactics work fine to great in sideways market periods, and they will gut you like a fish in trending and/or directional swing markets. Knowing that fact and managing trade signals according to prevailing market conditions make the difference between success or failure.

ANY type of oscillator-based approach: CCI, RSI, stochastics, <b>MACD</b>, BollingerBands, etc absolutely will not work day in & day out. Reversal traders must know when to fold 'em and stay out of directional market periods. That's how a week's or month's worth of cumulative profits will be lost in a single trend session: lots of small-gain days, one big loss day to wipe the slate clean.

I would guess that Woodie & co know much more about <u>when not to trade</u> than the newbie CCI crew does. "Free" is worthless at best or very costly otherwise for those who try to follow along and lose money in the process before skills are developed.

BTW... generic labeling of "snake oil" is flat-out errant, usually just an inane dismissal for saying something doesn't "work" as projected or assumed it will by the user.

Just about every method or tactic can be made to have a profitable edge in trading, CCI tactics are one of them. The edge is smaller than projected, and degree of difficulty in managing that edge greater than many might purport.

Not snake oil, at all. CCI trading will make money, but it's a hard way to succeed IMO as someone who studied it very intensively before.

Hope this helps,
Austin
 
Maybe you should ask Woodie ole boy, where those Make a Wish donations are that he supposedly made.

From what should have been a sizable donation, the wood man was never listed as a donor by Make a Wish Foundation....hum....
 
The old "primary" trade is the zlr or one of the variations on a cross and reversal.

This is essentially price returning to a 14sma (or slightly crossing it) and then continuing in the direction of the sma. Not a reversal but a pullback in the trend.

Most of the elaborations and additions in response to the need for newness and maybe because of the loss of range in us markets a few years back were the reversals.
 
Given the choices available for a newbie day trader, I highly recommend woodies room as a great place to start.

You just can't beat FREE even IF it's not perfect.
 
Quote from austinp:


In defense of Woodie's teachings, it is purely a reversal-type approach. Buying and selling price turns is the primary objective of all the myriad patterns, from what I've seen in the past.
Austin
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Isn't it funny how, many people can read the same thing and get the opposite out of it.

I always thought, and still do, that the ZLR was basically a strategy to trade a continuation pattern (flages, etc). In fact, I believe Woodie makes that pretty clear.

I'm almost positive, at least half of Woodies patterns are trend continuation and the other half reversal.

Try using the ZLR entry only when it is occuring after an obvious trend move. You won't get a bunch of signals, as we are lucky to get 1-2 trend days a week but I bet the signals you do get aren't too bad.

Remember, Woodie concentrates on the easiest part of trading, the entry.

The problem with Woodies stuff is really the fact that he isn't very clear, at all, on the two most important features of any trading plan....stops and exits. That's why no one will ever figure out if his patterns are any good, as is. Those that can take his entry signals and devise a stop loss and exit strategy will probably do fine. Unfortunately for new traders, they don't even know what's missing.
 
Quote from austinp:

<i>"How can you beat free? Just keep in mind his methods do not work quite as well as..."

Time and effort -- not to mention losing money -- have value. That is no "free" lunch. I won't go into all the erroneous assumptions about trading for a living that are being bandied about there. If you're sincere and not a shill I would suggest you take a look at the subjects of risk, opportunity costs, and do some basic math on what kind of consistent profitability it takes to make a decent living.

Snake oil pure and simple...</i>

In defense of Woodie's teachings, it is purely a reversal-type approach. Buying and selling price turns is the primary objective of all the myriad patterns, from what I've seen in the past.

Those general tactics work fine to great in sideways market periods, and they will gut you like a fish in trending and/or directional swing markets. Knowing that fact and managing trade signals according to prevailing market conditions make the difference between success or failure.

ANY type of oscillator-based approach: CCI, RSI, stochastics, <b>MACD</b>, BollingerBands, etc absolutely will not work day in & day out. Reversal traders must know when to fold 'em and stay out of directional market periods. That's how a week's or month's worth of cumulative profits will be lost in a single trend session: lots of small-gain days, one big loss day to wipe the slate clean.

I would guess that Woodie & co know much more about <u>when not to trade</u> than the newbie CCI crew does. "Free" is worthless at best or very costly otherwise for those who try to follow along and lose money in the process before skills are developed.

BTW... generic labeling of "snake oil" is flat-out errant, usually just an inane dismissal for saying something doesn't "work" as projected or assumed it will by the user.

Just about every method or tactic can be made to have a profitable edge in trading, CCI tactics are one of them. The edge is smaller than projected, and degree of difficulty in managing that edge greater than many might purport.

Not snake oil, at all. CCI trading will make money, but it's a hard way to succeed IMO as someone who studied it very intensively before.

Hope this helps,
Austin
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Austin,

When measured in months, Woodie's CCI method doesn't make money. Not makes a little money. Not makes less than one might expect. It is actually a negative expectancy system. I say this because I back tested the various signals at one time on years of data for various instruments.

I also talked with a number of people who were considered great traders at that site -- moderators, acolytes, even sane people -- what have you. None of them were profitable enough even with their own modifications to the system to justify the investment of time. If you are going to sit there all day and follow this approach it's got to make you a living. Woodie's CCI doesn't meet those criteria.

Generally, when someone tries to sell me something that doesn't meet the advertised criteria -- and they know it won't beforehand -- that's snake oil.
 
Quote from DonKee:

Isn't it funny how, many people can read the same thing and get the opposite out of it.

I always thought, and still do, that the ZLR was basically a strategy to trade a continuation pattern (flages, etc). In fact, I believe Woodie makes that pretty clear.

I'm almost positive, at least half of Woodies patterns are trend continuation and the other half reversal.

Try using the ZLR entry only when it is occuring after an obvious trend move. You won't get a bunch of signals, as we are lucky to get 1-2 trend days a week but I bet the signals you do get aren't too bad.

Remember, Woodie concentrates on the easiest part of trading, the entry.

The problem with Woodies stuff is really the fact that he isn't very clear, at all, on the two most important features of any trading plan....stops and exits. That's why no one will ever figure out if his patterns are any good, as is. Those that can take his entry signals and devise a stop loss and exit strategy will probably do fine. Unfortunately for new traders, they don't even know what's missing.
More...

Sorry to say this theory is just not true either. You can back test most any type of exit criteria you want and you will still end up with a negative expectancy over time. The real issue is that the market isn't static and there is no way to accurately assess the duration or size of a move except after the fact.

I never cease to be amazed at how many apologists there are for a system that no one can make work.
 
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