Useful things I've found on the Net.

This is a discussion on Useful things I've found on the Net. within the General Trading Chat forums, part of the Reception category; Originally Posted by grantx Nine, Re your post 21, from FTS8 onwards. This is the method Im trying to perfect ...

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Old Mar 8, 2008, 5:07pm   #36
Joined Mar 2007
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Originally Posted by grantx View Post
Nine,

Re your post 21, from FTS8 onwards.

This is the method Im trying to perfect at the moment (although I discovered the method independently as a modification of another method) . I reckon its the best approach for scalping. However, I dont refer to volume - holding a position for seconds, if possible, I dont think it strictly relevant (however, if someone can convince me otherwise Ill certainly listen); and I have no need for technical indicators - their lagging nature would undermine the immediacy of the method.

There is one point of yours with which I would disagree regarding this method: warning against going to too short a timeframe. To illustrate why, please refer to the attachment in the second pot - tyhe one haere is incorrect.

The charts are for Fridays CBOT 10-year future. The upper is a 1-minute time-frame, the lower a 10-tick time-frame. 1, 2, 3 and 4 show high/low points (Ill use only these its sufficient).

Here are the times of the highs/lows. The first figures are for the 1-minute chart, followed by the times for the 10-tick chart. The figures in brackets are from a 5-minute chart simply to provide a broader perspective.

1. 18:31, 18:30 (18:35)
2. 18:45, 18:44 (18:45)
3. 18:48, 18:48 (same time on the 5-min but the bar is a down-bar compared to an up-bar for 1-min and tick)
4. 19:05, 19:04 (19:05).

Is 1-minute significant? Of course it is (5-minutes is an infinity).

I think the greater the time-frame, the greater the risk. Assume you have a buy (sell) signal and you open a position; your entry price should be as close to the high (low) of the high(low) bar as possible, but not at the high (low) as this level would invalidate the high (low) bar as a buy (sell) signal (you wont know if a bar is a high or low until the following bar).

Your stop is above (below) the high (low) bar. Therefore, the further away from the high (low) where the position is opened, the greater the potential loss to the stop point. And as price can rise/fall over, eg 1-minute (bar), then logically it can rise/fall by a greater degree over 5-minutes (bar)and the further away your stop.

Each instrument has a unique optimal time for generating signals. As shown, the 10-year note is 10 ticks which is also (strangely) the optimum for the 5- and 2-year notes. For comparison, Eurexs Bund (10-year) is 25 ticks, Bobl (5-year) is 10-15 ticks, and Schatz (2-year) is 25 ticks. However, I think its important to occasionally adjust (check daily) these periods to reflect any change in underlying volatility (the same also applies to moving averages, for example a 5- and 15-minute ma may work fine one day but if the underlying becomes more volatile 3- and 13-minute may be more suitable).

Are there any weakness? Only my own not closing some losing positions quick enough (but Im improving).

Any comments welcome.

Grant.
Hi Grant.

i think the point nine was making was that newbies would be better looking at higher time frames as there will be less noise and there will be more time to identify and act on possible setups...

personally i find that 2 t/f's are best as per elder as multiples of 5. i have 5m and 1m.

also indicators don't have to be lagging. divergence between an indicator and the instrument is preemptive, no?

had a look at the bund looks pretty good for the shorter t/f don't have the 10 year t note on my platform unfortunately as this would probably be my preference .

cheers bd.
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Old Mar 8, 2008, 5:11pm   #37
Joined Mar 2007
trading day by day by chick goslin his methods are very similar to those being discussed here.

Intelligent Futures Trading - Trading Day by Day - Chick Goslin

as is lbr grail...

Linda Bradford Raschke - LBR Group

personally i think the 3/10 /16 is great.
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Old Mar 8, 2008, 5:16pm   #38
Joined Mar 2007
lbr stuff
Attached Files
File Type: pdf LBR_RASCHKE.pdf (137.4 KB, 370 views)
File Type: pdf raschke_pt2_0304.pdf (498.6 KB, 252 views)
File Type: pdf Raschke0203SFO.pdf (172.4 KB, 235 views)
File Type: pdf LBR_Scalp_setups.pdf (135.4 KB, 272 views)
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Old Mar 8, 2008, 6:14pm   #39
Joined Mar 2007
some dow charts from last week
Attached Thumbnails
wall-street-1-min-diver-07-mar-08-.png   wall-street-1minhd-07-mar-08-.png   wall-street-daily-cash-diver-07-mar-08-.png  

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Old Mar 8, 2008, 7:55pm   #40
Joined Jun 2006
Brutus,

Thanks for the pdf's - will read those this weekend.

I only subscribed to CBOT Friday so it is too early to make comparisons with Eurex's fixed-income. However, will be interesting to see how this develops.

Grant.
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Old Mar 8, 2008, 8:40pm   #41
Joined Feb 2007
So many helpful ppl in this forum....

"24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close."

Thanks Nine. If I ever get past step 24 I know this thread will have helped.

Since so much of trading is psychological, in the spirit of giving, attached are some philosophical summaries (AKA ramblings!) that I have found helpful.
Attached Files
File Type: doc The Tao of Pooh.doc (28.5 KB, 455 views)
File Type: doc The Monk Who Sold His Ferrari.doc (42.0 KB, 1082 views)
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Old Mar 8, 2008, 9:45pm   #42
 
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nine started this thread brutus, thanks for the additional material.

grantx,

The warning about timeframe is not because of price structure - its because as timeframe gets shorter decision time gets shorter and emotions play a larger part in most learning traders experience. This makes impulse errors, 2nd guessing, etc more likely to be a problem than on longer timeframes.

I agree with you that its important to find timeframes that provide good signals. So 5 minutes or 4 hours may provide good signals in X but when you look at Y they don't. Finding the right timeframe is followed closely by finding working mas. My own decision structure is "trend is" based on price action against mas; "signal is" based on current and recent past price action; and "entry is" based on the shorter timeframe waves that generated this signal which might cause me to jump on the signal or assume that it will retrace before it continues. Then of course, to take a profit, comes the all important stops, targets and trade management appropriate to the signal. My losers are closed when they hit my stop.

I think the FTM is a good framework for thinking about movement in the market. Then you have to study your tradable in that framework and decide how it is used. As you seem to be doing.
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