Keltner Channels or Bollinger Bands?

This is a discussion on Keltner Channels or Bollinger Bands? within the Technical Analysis forums, part of the Methods category; Originally Posted by Nowler The goal is to become the best trader I can be. I do that by understanding ...

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Old Dec 31, 2017, 7:43am   #16
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The goal is to become the best trader I can be. I do that by understanding as best I can. I am merely looking around, trying different things, trying to better understand the puzzle I am dealing with. I am looking at this puzzle through different lenses... sometimes I will recognise a new perspective, sometimes I don't. Indicators are not at the top of my list of priorities, I am merely gathering information because they can be useful.
"Becoming the best trader that you can be" is noble as an aspirational goal but can be rather meaningless as a developmental goal without the key components in bringing aspiration to fruition. A major challenge for every self directed trader as you are is that the pathway can easily be one of trial and error with many unfruitful effort. It is a catch 22 of elimination through a painful process. IMHO, having an aspirational goal will get you no where. What you need is a program just as with any self development program. It means you need structure. You need practical goals that you can aim for in your skills development; a process where your efforts are captured for evaluation; deficiencies that can be identified and re-programmed; and data sets to measure ongoing performance.

If you recall, I once asked you whether you have a trade plan for each trade that you take. Having a trade plan is the foundation of a trader's development program. It forces discipline and a trade process; it forces you to document your trade set ups and enable post evaluation; it measures your trade discipline in stop management and profit taking; the statistical output enables you to work on your overall expectancy be it RR or win rate ratio. In contrast knowing your win loss % is meaningless and non actionable other than questioning whether you need a different indicator.

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Is that a rhetorical question or are you actually eliciting a response?
Saying that trading is 80% psychological is useful when trying to point out that psychology is very important...that it is often the biggest hurdle. But is it 80%? Is it 80% all of the time or only some of the time?
Don't get too fixated whether trade psychological is predominant or 80 % is the right level as I was just using an example. At each state of our development the needs are different as they are unique to each trader. I am simply questioning whether you have reconcile your time allocation to your identified priorities and whether your priorities are in sync with your required skills development.

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Trading becomes less psychological the more you automate for example. So if you are eliciting a response then you have not supplied enough information for me to answer. At my level of trading proficiency I probably wouldn't be able to accurately quantify what % a particular style/strategy was anyway. But as I said, psychology is very often the biggest hurdle.
Is trading ever going to be less psychological with automation, I have my doubts but that is a subject for another day.
If you were to list three things you would priortise for self development what would they be and why? Only you can make that judgement.
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Old Dec 31, 2017, 8:56am   #17
 
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Hi Nowler,
: what is it that I want the indicator to do - what am I trying to achieve? Once you've got that answer, then finding the indicator that does what you want will be a whole lot easier.

Tim.
2 good questions.
In short my answer is
1. direction of prices
2. wealth.
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Old Dec 31, 2017, 7:45pm   #18
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"Becoming the best trader that you can be" is noble as an aspirational goal but can be rather meaningless as a developmental goal without the key components in bringing aspiration to fruition. A major challenge for every self directed trader as you are is that the pathway can easily be one of trial and error with many unfruitful effort. It is a catch 22 of elimination through a painful process. IMHO, having an aspirational goal will get you no where. What you need is a program just as with any self development program. It means you need structure. You need practical goals that you can aim for in your skills development; a process where your efforts are captured for evaluation; deficiencies that can be identified and re-programmed; and data sets to measure ongoing performance.

If you recall, I once asked you whether you have a trade plan for each trade that you take. Having a trade plan is the foundation of a trader's development program. It forces discipline and a trade process; it forces you to document your trade set ups and enable post evaluation; it measures your trade discipline in stop management and profit taking; the statistical output enables you to work on your overall expectancy be it RR or win rate ratio. In contrast knowing your win loss % is meaningless and non actionable other than questioning whether you need a different indicator.
Yes, of course. Hopes and dreams won't get me there on their own. I said "to be the best trader I can be" to encompass both of the choices you gave me in the question about development. I am aware that knowing a lot about any 1 thing will not make me a profitable trader. It will take an understanding of much more individual things, but also to extrapolate a eclectic/synergistic understanding from all. Indicators are a part of the game and can be used to good effect sometimes. Because of this, I feel it's smart for me to keep looking through different indicators, to see how they work. This, particularly in the early stages of trading development, can be quite useful ways to learn a new perspective of trading that I otherwise was oblivious of.

I do struggle with a structured approach. Or lack of I should say but I am coming around to it. I can increasingly see the benefits of having a defined plan, and also the pitfalls of being too fluid. Even the stats from myfxbook have helped a lot already but in terms of getting some meaningful statistical understanding of my style or strategy it's impossible if I don't have a well defined plan. How can I know what is and isn't working when no 2 consecutive trades are guided by the same rules/criteria?


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Don't get too fixated whether trade psychological is predominant or 80 % is the right level as I was just using an example. At each state of our development the needs are different as they are unique to each trader. I am simply questioning whether you have reconcile your time allocation to your identified priorities and whether your priorities are in sync with your required skills development.


Is trading ever going to be less psychological with automation, I have my doubts but that is a subject for another day.
If you were to list three things you would priortise for self development what would they be and why? Only you can make that judgement.
I don't have it well defined but I know it is going to take time. So much time that I have happily accepted that this going to be a life-long endeavour, at least in some manifestation. It's not just about making money. It's largely about me being challenged! Being able to be the sole architect of my rise, or my fall! With this, I can build something something for myself, from the ground up, brick by brick. And for that I will put in the work!

I have been thinking about your question on the three things I would prioritise for the last 30 mins...
I have priorities but trying to clearly define them in order of rank is difficult...

I'm going to ponder it a bit more while I devour this Chinese food (that the Chinese apparently dont even eat).
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Last edited by Nowler; Dec 31, 2017 at 7:53pm. Reason: I left out a keep point.
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Old Jan 1, 2018, 3:40pm   #19
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If you were to list three things you would prioritise for self development what would they be and why? Only you can make that judgement.
These are not in order of rank, but are the top 3 priorities as I see it at the moment.

Fitness - I mean this both mentally and physically. Each has its own benefits but one also promotes the other. Physical exercise will obviously have it's wonderful effects; healthy blood and hormone levels, healthier body composition (fat:muscle mass) as well as organ health and de-stressing. As you know, de-stressing not only has physical effects, but also mental. Then looking at it from a mental health or mental exercise point of view, that obviously has it's noticeable effects including mindfulness and perceived quality of life and then loops back around to physical benefits again!


Knowledge - This is self explanatory (the more knowledge about trading I have, the more potential I have). I predominantly mean trading knowledge but it's not limited to it as the understanding of somethings - although they may not present obvious transferrable benefits - can present unique and creative opportunities in other non-traditionally related areas. Schemata complexity, essentially.

Organisation - This essentially relates to the efficacy of what I mentioned above, and much more. The more organised I am, the finer I can tune and the more accurate and prepared I am. Good organisational skills can help me train my body and mind more and to do it smarter. This can also be said for my trading. Which begs the question...why if I am already aware of this, why am I not already implementing it? I have been increasing my understanding of basics in trading, including terms and phrases...tool also and whatnot but I need to step it up. By establishing a few avenues/procedures of carrying out my trading, be it research or execution/management of trades it takes a load off my working memory capacity, which is already very limited. So in a cognitive sense, it could likely make things easier, or at least in a sense of it being tidier. By establishing said avenues/procedures should, in theory, have a positive impact on my trade outcomes, or at the very least will make it easier for me to identify issues and rectify them. Being organised will almost definitely help psychologically. Another aspect of being organised that I should probably work on is getting up earlier. I stay up late and get up late. I am strongly considering getting up far earlier...getting on an hour before the open of the London session



Note: The longer I am trading, the easier it is to see the wood from the trees. When I first started I was overwhelmed when listening to other traders talking. Simple terms like hitting resistance, divergence, confluence etc would require a lot of cognitive processing (naturally enough as it was all new to me). But now after some time being exposed to all this stuff, I now instantly understand certain things, therefore requiring far less cognitive processing that I can now allocate to other things. After more time I will understand those better, requiring less cognitive processing, freeing up capacity for new aspects.
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Old Jan 1, 2018, 5:01pm   #20
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These are not in order of rank, but are the top 3 priorities as I see it at the moment.

Fitness - I mean this both mentally and physically. Each has its own benefits but one also promotes the other. Physical exercise will obviously have it's wonderful effects; healthy blood and hormone levels, healthier body composition (fat:muscle mass) as well as organ health and de-stressing. As you know, de-stressing not only has physical effects, but also mental. Then looking at it from a mental health or mental exercise point of view, that obviously has it's noticeable effects including mindfulness and perceived quality of life and then loops back around to physical benefits again!


Knowledge - This is self explanatory (the more knowledge about trading I have, the more potential I have). I predominantly mean trading knowledge but it's not limited to it as the understanding of somethings - although they may not present obvious transferrable benefits - can present unique and creative opportunities in other non-traditionally related areas. Schemata complexity, essentially.

Organisation - This essentially relates to the efficacy of what I mentioned above, and much more. The more organised I am, the finer I can tune and the more accurate and prepared I am. Good organisational skills can help me train my body and mind more and to do it smarter. This can also be said for my trading. Which begs the question...why if I am already aware of this, why am I not already implementing it? I have been increasing my understanding of basics in trading, including terms and phrases...tool also and whatnot but I need to step it up. By establishing a few avenues/procedures of carrying out my trading, be it research or execution/management of trades it takes a load off my working memory capacity, which is already very limited. So in a cognitive sense, it could likely make things easier, or at least in a sense of it being tidier. By establishing said avenues/procedures should, in theory, have a positive impact on my trade outcomes, or at the very least will make it easier for me to identify issues and rectify them. Being organised will almost definitely help psychologically. Another aspect of being organised that I should probably work on is getting up earlier. I stay up late and get up late. I am strongly considering getting up far earlier...getting on an hour before the open of the London session



Note: The longer I am trading, the easier it is to see the wood from the trees. When I first started I was overwhelmed when listening to other traders talking. Simple terms like hitting resistance, divergence, confluence etc would require a lot of cognitive processing (naturally enough as it was all new to me). But now after some time being exposed to all this stuff, I now instantly understand certain things, therefore requiring far less cognitive processing that I can now allocate to other things. After more time I will understand those better, requiring less cognitive processing, freeing up capacity for new aspects.
Also, don't forget to work on your bull$hit filter, arguably THE most important skill to learn in the world of trading (and elsewhere)
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Old Jan 1, 2018, 6:15pm   #21
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Also, don't forget to work on your bull$hit filter, arguably THE most important skill to learn in the world of trading (and elsewhere)
Indeed!
Thankfully I arrived to the party with a pretty good BS filter. Not impervious, but well developed. My training in research comes in quite handy here as I now have a newfound appreciation for criticism. Still, like trading, filtering BS is an ever developing endeavour. With more education and intelligence brings more educated and intelligent lies and scams.

Beware of the man with 1 book
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Old Jan 1, 2018, 11:57pm   #22
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Originally Posted by Nowler View Post
Knowledge - This is self explanatory (the more knowledge about trading I have, the more potential I have). I predominantly mean trading knowledge but it's not limited to it as the understanding of somethings - although they may not present obvious transferrable benefits - can present unique and creative opportunities in other non-traditionally related areas. Schemata complexity, essentially.

Organisation - This essentially relates to the efficacy of what I mentioned above, and much more. The more organised I am, the finer I can tune and the more accurate and prepared I am. Good organisational skills can help me train my body and mind more and to do it smarter. This can also be said for my trading. Which begs the question...why if I am already aware of this, why am I not already implementing it? I have been increasing my understanding of basics in trading, including terms and phrases...tool also and whatnot but I need to step it up. By establishing a few avenues/procedures of carrying out my trading, be it research or execution/management of trades it takes a load off my working memory capacity, which is already very limited. So in a cognitive sense, it could likely make things easier, or at least in a sense of it being tidier. By establishing said avenues/procedures should, in theory, have a positive impact on my trade outcomes, or at the very least will make it easier for me to identify issues and rectify them. Being organised will almost definitely help psychologically. Another aspect of being organised that I should probably work on is getting up earlier. I stay up late and get up late. I am strongly considering getting up far earlier...getting on an hour before the open of the London session
I suggest you relate your goals to measurable outcomes because a constructive program requires effort to be directed, measured, tracked and corrective action taken. What would be your meaureable outputs relating to trading?
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Old Jan 2, 2018, 2:58pm   #23
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I suggest you relate your goals to measurable outcomes because a constructive program requires effort to be directed, measured, tracked and corrective action taken. What would be your measurable outputs relating to trading?
In terms of knowledge acquisition/application:
- Tracked: The acquisition can be tracked internally by means of knowing myself whether I should have learned more that week or not (was I slacking perhaps - I'm the only one that'll get hurt if I'm dishonest). I could implement a minimum number of articles to read each week... The tracking of the application of such knowledge will be tracked by documenting trades (see below - Tracking organisation - "reason for taking trade")

- Measured: Monthly P&L as well as my satisfaction that I worked hard enough


In terms of Organisation:
- Tracked: By means of documenting each trade down (Time, Direction, Units, Entry, Exit, SL, Reason for taking trade, Success/Failure, and additional notes). All of this is automatically documented by Myfxbook (see attachment) and includes a section for me to add notes).
- Measured: If I can look back over the last weeks/months trades and there be no ambiguity, then the goal is achieved. If I can't understand something, then why? What could I have added to my standardised documentation of trades to avoid such ambiguity?
Attached Thumbnails
documenting-trades.png  
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Old Jan 3, 2018, 12:24am   #24
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In terms of knowledge acquisition/application:
- Tracked: The acquisition can be tracked internally by means of knowing myself whether I should have learned more that week or not (was I slacking perhaps - I'm the only one that'll get hurt if I'm dishonest). I could implement a minimum number of articles to read each week... The tracking of the application of such knowledge will be tracked by documenting trades (see below - Tracking organisation - "reason for taking trade")

- Measured: Monthly P&L as well as my satisfaction that I worked hard enough


In terms of Organisation:
- Tracked: By means of documenting each trade down (Time, Direction, Units, Entry, Exit, SL, Reason for taking trade, Success/Failure, and additional notes). All of this is automatically documented by Myfxbook (see attachment) and includes a section for me to add notes).
- Measured: If I can look back over the last weeks/months trades and there be no ambiguity, then the goal is achieved. If I can't understand something, then why? What could I have added to my standardised documentation of trades to avoid such ambiguity?
Some suggestions.

You are too focus on P & L. Your immediate measureable output should be on your win loss ratio. There are two factors that will improve your ratio : (a) quality of trades; and (b) less mistakes. The former in turn is affected by choice of currency pair; choice of TF's; and choice of set up's (with trend vs counter trend). The latter could be FOMO; poor consideration of trade location; impatience; poor consideration of risk reward; not having a proper trade plan, etc.

Whilst you mentioned you will put together trade plans, I don't see how you can document it to the level of detail within myfxbook. In my view, having documented trade plans is central to your trade development. It forces you to consider your trade process, trade consideration and most importantly post trade evaluation and corrective feedback.

Your continuing knowledge development is shaped by the output from your trades and post trade evaluation and is not an independent process.
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Old Jan 3, 2018, 1:04pm   #25
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Some suggestions.

You are too focus on P & L. Your immediate measureable output should be on your win loss ratio. There are two factors that will improve your ratio : (a) quality of trades; and (b) less mistakes. The former in turn is affected by choice of currency pair; choice of TF's; and choice of set up's (with trend vs counter trend). The latter could be FOMO; poor consideration of trade location; impatience; poor consideration of risk reward; not having a proper trade plan, etc.

Whilst you mentioned you will put together trade plans, I don't see how you can document it to the level of detail within myfxbook. In my view, having documented trade plans is central to your trade development. It forces you to consider your trade process, trade consideration and most importantly post trade evaluation and corrective feedback.

Your continuing knowledge development is shaped by the output from your trades and post trade evaluation and is not an independent process.
Thanks for the suggestions, I appreciate it.

The reason I chose P&L instead of hit rate is because the latter will change based on the type of trades I take, ie, larger risk:reward trades (with predetermined target) likely have lower hit rates than more modest R:R. So if I employ strategies that have different success rates, then surely basing my performance off monthly P&L would be better? No?

In regards to the trade plan, what else would you suggest I add? Or how comprehensive of notes about the trade would you suggest?
If you hadn't pulled me on this then I would have happily continued, believing that what I said i'd do with MyFxBook would suffice. As you can see from the attachment, the likes of time, duration, units, direction, pips, SL etc.. are all accounted for. So that cannot be your issue. Perhaps you didn't notice the notes icon the the extreme right of each trade? In this attachment I have opened the notes icon so it's more visible. Do you still have doubts over this as a form of recording trades?
Attached Thumbnails
untitled.png  
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Old Jan 3, 2018, 10:58pm   #26
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The reason I chose P&L instead of hit rate is because the latter will change based on the type of trades I take, ie, larger risk:reward trades (with predetermined target) likely have lower hit rates than more modest R:R. So if I employ strategies that have different success rates, then surely basing my performance off monthly P&L would be better? No?
There are two major advantages in using non monetary goals. Firstly is the psychological drag associated with monetary expression. Secondly is the contextual advantage of using non monetary factor to access performance. Overall your performance will be incremental not in leaps because there are plenty of issues to work through. You need to put together a practical program before the issues are obvious - something you have not done as yet, Please refer to my comments below.
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In regards to the trade plan, what else would you suggest I add? Or how comprehensive of notes about the trade would you suggest?
If you hadn't pulled me on this then I would have happily continued, believing that what I said i'd do with MyFxBook would suffice. As you can see from the attachment, the likes of time, duration, units, direction, pips, SL etc.. are all accounted for. So that cannot be your issue. Perhaps you didn't notice the notes icon the the extreme right of each trade? In this attachment I have opened the notes icon so it's more visible. Do you still have doubts over this as a form of recording trades?
Let's deal with the issue in reverse. You said you have done approx. 200 trades in December. Since your memory is still fresh as they are recent trades, I suggest you populate your notes in myfxbook for each of the trade you took. When populating it, think about how you will classify the trades in terms of performance with the intend that you can develop some meaningful statistics that will help you to develop corrective aspects of your trading. Publish those statistics once you have done. We can then have a meaningful conversation - not before then.
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Old Jan 4, 2018, 2:50pm   #27
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There are two major advantages in using non monetary goals. Firstly is the psychological drag associated with monetary expression. Secondly is the contextual advantage of using non monetary factor to access performance. Overall your performance will be incremental not in leaps because there are plenty of issues to work through. You need to put together a practical program before the issues are obvious - something you have not done as yet, Please refer to my comments below.


Let's deal with the issue in reverse. You said you have done approx. 200 trades in December. Since your memory is still fresh as they are recent trades, I suggest you populate your notes in myfxbook for each of the trade you took. When populating it, think about how you will classify the trades in terms of performance with the intend that you can develop some meaningful statistics that will help you to develop corrective aspects of your trading. Publish those statistics once you have done. We can then have a meaningful conversation - not before then.

I should have said percentage growth, not P&L.
I don't trade for money, I trade for percent as it makes it about my system. And as you said, when it becomes to monetary expression, it can have a psychological drag on me.

Thanks for the help
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Old Jan 6, 2018, 4:41pm   #28
 
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Can you just brief me about the bollinger Squeeze trading strategies.
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Old Jan 6, 2018, 6:21pm   #29
 
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Can you just brief me about the bollinger Squeeze trading strategies.
Heard about the BB squeeze but never actually seen one.
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Old Jan 6, 2018, 6:49pm   #30
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Can you just brief me about the bollinger Squeeze trading strategies.
sandeep - YouTube is your friend - just search 'Bollinger Band Squeeze' - loads of results come up.
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