YM in a Can

Quote from ElectricSavant:

How do I get stopped out in a stop and reverse system? You are correct about my style. Though if I had the time, I would not mind scalping. "Monitored Automation" or "Broker Assisted Trading" is what I need, especially while holding down a job and trading 24hrs.

Michael B.
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hi michael,

seems to me that you would be spinning your wheels with the stop and reverse feature? my point being that if your initial direction was off and you got stopped out re-entered the market you could very easily become a victim of the intraday phenominon of low volatility price congestion i.e. you could get stopped out a second time only to have the market finally breakout into trend.
you would make $$$ on the 3rd entry but would only be making up for the 2 previous losses.
 
GA,

This is what I am afraid of. Your wisdom is appreciated. Lets watch.

Michael B.

P.S. BUT, Money management could be key to the probability of the third trade getting the direction straight and showing the net profit for the day. (lol, one could even just take those trades and trade infrequently)

Quote from Guardian Angel:

hi michael,

seems to me that you would be spinning your wheels with the stop and reverse feature? my point being that if your initial direction was off and you got stopped out re-entered the market you could very easily become a victim of the intraday phenominon of low volatility price congestion i.e. you could get stopped out a second time only to have the market finally breakout into trend.
you would make $$$ on the 3rd entry but would only be making up for the 2 previous losses.
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The more I think about what you are saying, the more sense it makes to me. All this testing and thinking and NOT trading better produce results or it will be yet again another waste of my time.

Michael B.

P.S. Not to say that this experience in ET is wasting my time. But face it, I am using my time to make a profit, not to chit-chat.


Quote from Quah:

ES -

Why such the interest in backtesting? What would that prove/disprove?

IMO, the only important thing is how it works in the present - and if it is working , then you should use it while it is working. And stop when it stops working. It doesn't really help to know that 2 years ago it worked or didn't work, does it?
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This example to discover how to use this system to scalp with and set YOUR OWN brackets is a keeper.

Michael B.

u da manz


Quote from manz66:

MAE/MFE:

'In other words, once you enter a trade, how far against you did it go? If you take a bunch of trades genetared by an entry technique and separate winning trades from losing trades and plot the MAEs for each (let's say 10 days after entry for example), you'll find that the MAEs for each are different. If you plot a scattergram of the MAEs for winning trades using any spreadsheet, you'll get a good idea of just how far winning trades normally go against you and you can use this to figure out where to best place your stops'.

opposite is MFE.
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If I were to get enough data to prove that the NATURE of the levels would indicate the prevailing trend, could I intepret these comments you made another way?

Example, small size only when going against the overall trend.

Normal size when in consolidation.

Large size when its a high probability trade signal for you with the overall trend

Like this:

entry after a win= 1 unit
first losing reversal = 2 units
second losing reversal = 3 units

Michael B.
 
1/2 bracket no target

----------------NO UPPER BRACKET REVERSAL OR TARGET(awaiting new session)
10026 L Entry
10006 S H3

Michael B.

P.S. This is a trade following a loss which so far indicates a higher probability of success. The new brackets will be interesting. Even though one-contract trading is showing a nice profit so far, can you see where money mangement can improve results? I know I need more data, and thats what this journal is collecting. Just make note of this and lets see what happens ok?

 

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Carried long trade* into new session from 10026 (performance bond requirement $2,500 per contract)


Old short bracket -----, 10006
New short bracket 9932, 10114

This is what it looks like:

10114 S H3
10026 L* Entry
9932 S L4


Michael B.

P.S. *=proposed higher probability trade (work in progress).
 

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This is simply the position size managment of 1, 2, 3....that I discussed earlier.
  • entry after a win= 1 unit
  • first losing reversal = 2 units
  • second losing reversal = 3 units


Michael B.


P.S. Do you want $2,185.00 or do you want $5,060.00 with a smoother equity curve (in 12 trading days) ? You choose.
 

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