Woodies CCI

Quote from ssternlight:

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.
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Amen, brother.

I remember having an online converstaion with one of the "great cci traders" (according to woodie) a few years back. He said he wasn't going to a cci conference in LV because he couldn't afford a plane ticket! A great trader that can't afford a plane ticket???

Nobody in that room makes any consistent money. NOBODY.
 
Quote from ssternlight:

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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Your logic is a little faulty.

You say "the market isn't static"..."You can back-test...".

All you have stated, which I agree with, is that testing short term trading systems is futile because the markets change over time.

Why do you think people like Larry Williams continuously come out with new "curve fitted" systems?

The point I was trying to make is that a good trader can take almost any entry system and not do too badly. The entry is the least important part of the trade.

I just took a ZLR and made $100.00 per contract on the ER. Why? Because after a strong move, we have a high percentage occurrence of at least a re-test.

Why did I only make $100.00? Because, I wasn't going to wait and see if we just re-tested or exceeded the previous high.

That is all discretionary and comes from experience. We are, also, up against R2 on the ES and R1 on the ER.

See chart for the visual.

BTW, I really don't care to defend or knock Woodie. Again, my point is that the entry is the least important part of the trade.
 
Quote from DonKee:

Your logic is a little faulty.

You say "the market isn't static"..."You can back-test...".

All you have stated, which I agree with, is that testing short term trading systems is futile because the markets change over time.

Why do you think people like Larry Williams continuously come out with new "curve fitted" systems?

The point I was trying to make is that a good trader can take almost any entry system and not do too badly. The entry is the least important part of the trade.

I just took a ZLR and made $100.00 per contract on the ER. Why? Because after a strong move, we have a high percentage occurrence of at least a re-test.

Why did I only make $100.00? Because, I wasn't going to wait and see if we just re-tested or exceeded the previous high.

That is all discretionary and comes from experience. We are, also, up against R2 on the ES.

See chart for the visual.

BTW, I really don't care to defend or knock Woodie. Again, my point is that the entry is the least important part of the trade.
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DonKee,

Nothing faulty about the logic at all.

First, I wasn't generalizing about short term trading at all. I was specifically talking about CCI trading as described by Woodie and taught on his site.

Next, take what you said and extend it to Woodie's system. We seem to agree that there is no consistent pattern of exits that will produce a positive expectancy over time.

You would like to make some sort of argument about the potential success of discretionary trading. I won't take that topic up now except to note that there are very few traders who read the tape and succeed at trading as a business and that teaching discretionary trading -- if it works at all -- is just about impossible.

More generally, people in his room are mislead by the partial reinforcement of the occasional winner -- much like your $100 example. However, over time the system has a negative expectancy no matter how you structure your exits.

To put it clearly, the patterns described on Woodie's site are not good entry signals over the long haul. You can't make sufficient money with them to justify the investment of time no matter what set of consistent exit criteria you use.

Sam

BTW... there is an article in Active Trader this month that tests pivot points and finds them wanting..
 
I'm not here to prove/disprove anything.

Just put the charts up on your screen and see how they work for yourself.

Best Regards,

Damn good trading in 2007!

JJ
 
Quote from TeddyTheTrader:

I don't know of anyone that is successful trading it the way it's taught. Kiwi_Trader posed the question and no responses. I believe that almost everyone in the room is unprofitable.

Looking at 1 indicator for all your decisions and leaving price out of the equation is just silly anyways.

You need to go find something with an edge. CCI patterns are not an edge.

You can find a pretty good story of a guy who failed with the CCI at http://www.cheesechat.blogspot.com .
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Nice post.

The CCI is just a tool. Nothing more, nothing less. Nobody spoon feeds the public/masses an "edge". So don't expect the CCI, in and of itself, to have an "Edge". Don't expect anything released to the public to have an "Edge".

Successful trading is not for the lazy. You have to do the work to find your own "Edge" by being "Creative".

The issue of whether the CCI "works",
as Woodie or anybody else teaches it, is completely and totally irrelevant.

The real question is, can you take something that doesn't work and make it work. Can you take a system, that's released to the public, with "No Edge" and "Make it have an Edge". That's all that matters.

And when you find your edge. Keep it to yourself.


Goinglite
 
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