Adventures with Chick Goslin - Trading Day by Day

This is a discussion on Adventures with Chick Goslin - Trading Day by Day within the Trading Systems forums, part of the Methods category; Thanks S-A, I know that you trade this system and and one of it's advocates. My entry was actually preempted ...

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Old Feb 3, 2005, 6:24pm   #9
Joined Aug 2004
ardhill started this thread Thanks S-A, I know that you trade this system and and one of it's advocates.

My entry was actually preempted by the 30min chart, which was strongly bearish and concurrent before I entered this trade. The next day was great as it continued to drop. Then yesterday happened, and now today happened

I will get back at the end of the trading day after I finish crying and decide if this is over or if it is the end of the expected short term pullback.

I am going to huff now, the markets generally are tanking and CIEN is having an up day
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Old Feb 3, 2005, 11:25pm   #10
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ardhill started this thread OK, end of today, lets see what has happened.

Status - Neutral. TL is flat, ML is below 0 but slightly up, SL is up and below 0.

I must admit, I would have liked to see the TL heading south by now, but if you take the margin of error into consideration - it is. The stock rallied some today, which was sad since the general markets had a down day.

It is certainly a pullback now, and possibly heading to meet the 20 SMA. There may be another day or two of 'not downward' movement as it meets the 20 SMA, though todays upward move was weaker than yesterdays, so that is some sign of a lack of upward strength.

I don't think that the picture looks all that bad, a move to the 20 SMA would be 'normal', it's just a pity it happened so soon after I entered the trade. I would be hesitant to pull the trade prematurely, as it is not looking too bad, and I do have a real stop in place at 2.83. I believe if that stop is hit, it will be a sign that the downward trend isn't going to hold. It is just above an overhead Fib (S/R) level and above a consolidation pattern.
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Old Feb 4, 2005, 11:10pm   #11
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ardhill started this thread And CIEN is Toast!

Trend out of control and stoploss hit. Ah well, you can't win them all.
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Old Feb 5, 2005, 1:55am   #12
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Quote:
Originally Posted by ardhill
And CIEN is Toast!

Trend out of control and stoploss hit. Ah well, you can't win them all.
sorry that trade didn't pan out ardhill. I've been considering the application of Chick's system to stocks and I wonder whether an adjustment of the determinant of trend might be in order. Stocks don't seem to be as trendy as futures as a rule unless the fundamental case is compelling (see apple) so I wonder whether a slightly shorter preferably exponential moving average say 44 might be a better determinant of trend for the system when applied to stocks.
Just a thought.
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Old Feb 5, 2005, 2:21am   #13
 
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Quote:
Originally Posted by ardhill
And CIEN is Toast!

Trend out of control and stoploss hit. Ah well, you can't win them all.
Ardhill

I'm confused...........trend is out of control????.......The 50 average has been up. It became flat during the retracement. The second law states that continuation is more likely than change. When the divergence was indicated ( after price retraced for a while ) , this (to me ) was the time to buy. How long price will continue is unknowable so I wouldn't look to buy now. ( too late). Can you explain your definition of trend here?

erie
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Old Feb 5, 2005, 3:40pm   #14
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ardhill started this thread
Quote:
Originally Posted by erierambler
Can you explain your definition of trend here?
Well, I can explain why I thought there was a downward trend.

As you know, and as Chick reminds us, we are not trading indicators, but price. My definition of trend comes much from the price action as I believe it was just moving into a downward trend and the lagging indicators hadn't quite caught up, though there is also indicator conformation as spoken about by Chick.

I will just make these quick pointers, you can see what I mean on the attached chart:
  • Price broke down through S/R lines indicating weakness.
  • Price in downward trend channel.
  • 1-2-3 formation with following downward move
  • 50 SMA does physically turn down (just)
  • With Chick's 'Margin of Error' the TL is likely to go down even further and can be considered Bearish
  • ML in strong downward trend, compare it to the gentle rise of previous up move (October to end of December)

I hope this helps you see why I considered it a downward move. But hey, I ain't perfect and that one didn't work out.

Good trading.
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Old Feb 5, 2005, 3:56pm   #15
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ardhill started this thread
Quote:
Originally Posted by jcwonder8
sorry that trade didn't pan out ardhill. I've been considering the application of Chick's system to stocks and I wonder whether an adjustment of the determinant of trend might be in order. Stocks don't seem to be as trendy as futures as a rule unless the fundamental case is compelling (see apple) so I wonder whether a slightly shorter preferably exponential moving average say 44 might be a better determinant of trend for the system when applied to stocks.
Just a thought.
Hi

I have been thinking something similar myself.

Not the comparison between futures and stocks, I don't have a futures feed so can't comment on the trends there. I have been looking at the system with the sort of stocks I like to trade i.e. Nasdaq stocks, and yes, by the time the trend is established by the 50 SMA in the Nasdaq, it can quickly change.

I have though made a few successful trades with this system, and made some money so it isn't all that bad. Though as I mentioned on this thread, I think my timing was a little wrong on this trade - probably too quick getting in. I was quick because of the lag thing we have just been thinking about.

Anyway, I have also been looking at that situation and am trying a few things, but not getting away from Chick's system too far as it does have a lot going for it. I am not ready to mention my ideas as yet as they are in early stages ie they need a little move chart time to see if they really can work, then some trades to see how it happens in real time.

But as I said, I like this system and the rest of the material in his book.
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Old Feb 5, 2005, 4:05pm   #16
 
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Quote:
Originally Posted by ardhill
Well, I can explain why I thought there was a downward trend.

As you know, and as Chick reminds us, we are not trading indicators, but price. My definition of trend comes much from the price action
I hope this helps you see why I considered it a downward move. But hey, I ain't perfect and that one didn't work out.

Good trading.
Thanks for taking your time to explain. From what I had read in his book , the 49 ma (or 50) was the trend. The dot you have indicating 50 days previous is where one could assume support to be found.(looking at price and a consolidation period). The ML found support there with a divergence showing on the SL. Hey just my two cents, I like the exercise, no one is really right or wrong, it's just our interpretation , and appreciate the discussion.

Good trading to you as well,

erie
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