Curious

[megamuel]

Why is it that people are so secretive about their trading strategies? I'm sure there is an obvious answer to this but sometimes I need things spelling out for me! Is it because it could have a negative effect on their trading? Or just that people aren't willing to share something that has taken them so long to develop and perfect? Anyway hope everyone is making lots of money!

Sam.

 

[UKtradergirl]

Why is it that people are so secretive about their trading strategies? I'm sure there is an obvious answer to this but sometimes I need things spelling out for me! Is it because it could have a negative effect on their trading? Or just that people aren't willing to share something that has taken them so long to develop and perfect? Anyway hope everyone is making lots of money!

Sam.

Because murphy's law states that the moment you share your strategy it will start going wrong.

Anyway, there are lots of strategies on here that people have shared (helpfully or not).

 

[JTrader]

Because the forex industry is a $3000,000,000,000 per day industry, and if i have half a dozen of you lot buying & selling at £2 per pip at the exact same time as me, it is going to cause mayhem & send it tits up!

 

[UKtradergirl]

Because the forex industry is a $3000,000,000,000 per day industry, and if i have half a dozen of you lot buying & selling at £2 per pip at the exact same time as me, is ging to cause mayhem & send it tits up!

If i promise to only do £1 a pip will you share your strategy with me?

 

[Rupert206]

Some strategies cannot be taught...alot of people dont trade the same way all the time, but are constantly adapting to market conditions. This cant be taught. It is something that years and years of market exposure ingrains within a trader.

Even if they explained their strategy that was making them millions, someone else trying the same would blow their account trying to trade that way.

 

[JTrader]

If i promise to only do £1 a pip will you share your strategy with me?

Sorry, I'm saving it for inclusion when my book is published. I'm just dealing with a few copyright issues at the moment. The patents office are being bureaucratic as per usual.


The crux of my approach is scattered around here though......candlestick patterns, S/R.

 

[JTrader]

Some strategies cannot be taught...alot of people dont trade the same way all the time, but are constantly adapting to market conditions. This cant be taught. It is something that years and years of market exposure ingrains within a trader.

If if they explained their strategy that was making them millions, someone else trying the same would blow their account trying to trade that way.

Exactly!

& ditto!

My approach can perform superbly, but my poor implementation could easily lead to a losing day. Thats the knife edge of trading!

 

[megamuel]

Because the forex industry is a $3000,000,000,000 per day industry, and if i have half a dozen of you lot buying & selling at £2 per pip at the exact same time as me, is ging to cause mayhem & send it tits up!

I see, thought it might be something to do with this. Hope I can develop my very own secret strategy one day!

Sam.

 

[zupcon]

Because the forex industry is a $3000,000,000,000 per day industry, and if i have half a dozen of you lot buying & selling at £2 per pip at the exact same time as me, is ging to cause mayhem & send it tits up!

brilliant

 

[StockHunter]

Some strategies cannot be taught...alot of people dont trade the same way all the time, but are constantly adapting to market conditions. This cant be taught. It is something that years and years of market exposure ingrains within a trader.

Even if they explained their strategy that was making them millions, someone else trying the same would blow their account trying to trade that way.

I totaly agree! :clap::smart:

 

[Bolimomo]

Why is it that people are so secretive about their trading strategies? I'm sure there is an obvious answer to this but sometimes I need things spelling out for me! Is it because it could have a negative effect on their trading? Or just that people aren't willing to share something that has taken them so long to develop and perfect?

Maybe some vendors are secretive of their "best money making" strategies. I for one don't think mine are all that secretive. I basically have adapted the GMMA (Guppy Multiple Moving Averages) system to day-trading, and only trading in the equity market. Guppy developed his system on long-term charts (daily charts) and he trades Forex from Australia (or is it New Zealand?). His GMMA consists of 2 groups: The faster group (he called "trader") and a slower group (he called "investor"). Each group consists of 6 moving averages with different periodicities (from 3MA, 7MA, 11MA, etc. all the way to 60MA). You look at how these 2 groups of moving averages move in relation to the other group and trade accordingly. In a trending market (all MAs line up), you trade with the trend - try to get in as early as you can and ride it as long as you can. In a range-bound market (the long-term MA group is flat and the short-term MA group criss-crosses each other), you buy at lower range and sell at upper range. Very simple.

Do a Google on "GMMA" and you will find quite a few pages and forum threads discussing his idea.

Simple, right? Can you write it down in a formulae or in a set of concrete rules (like "if X and Y then Z")? I can't. It is quite visually oriented. Because there are multiple averages involved, it's very hard to write a script to automate this kind of trading. It's a discretionary method and I have very good results trading stocks based on those patterns.

Now would I take my time to type out everything I have developed? Why? Would someone pay me? I don't think they would.

1) They will first question and be skeptical of my trading methods. "Do they really work?"
2) If they believe my methods work, they would ask me to explain in details how the methods work and challenge them.
3) That I have to explain under what environments these methods would most likely work and when they are not likely to work. There are no methods that would work 100% of the time. You are lucky if you can find something that works 80% of the time.

So why should I spend the time to explain my methods to others who would be skeptical about them? Especially... doing this for free????? My time should be spent on trading. It pays a hell lot better (even if someone pays me to be an instructor).

 

[megamuel]

Good post Bolimomo, I am new to trading and currently researching strategies and techniques and lookin for something that suits me and that I am comfortable with. I will definately look into GMMA. Currently my platform only allows me to view 3 moving avverages, could it be done with this or do you need 6? You say you have adapted this strategy to day trading, may I ask what time frame you view your charts on? Thank you for your post,

Sam.

 

[Bolimomo]

Currently my platform only allows me to view 3 moving avverages, could it be done with this or do you need 6? You say you have adapted this strategy to day trading, may I ask what time frame you view your charts on? Thank you for your post,

Sam:

You can use 3 MAs. I suggest you pick 8MA as the fast one, 20MA as the mid, and 60MA as the slow one. Just start observing how prices move in relation to the fast, mid and slow MAs to help you trade. Read up on Darrel Guppy's write-ups on GMMA to have a look at his original intent.

I use 1-minute chart to take side (long/short) and roughly when to enter. I use tick charts to time my orders. This is not for beginners because things happen too fast. You can take the approach but look at 10-min, 30-min, or 5-min at the shortest to trade.

Enclosed is one of the charts (and many indicators) that I look at. I have 15 computer screens in my trading room. So imagine 10 to 15 screens around me looking at different stocks for trading opportunities.

(The thick red/green lines are just what I drew: the opening 30 minute high/low, trade the breaks.)

My adaption from the GMMA is that: in the short-term group ("trader" group), Guppy uses 6 MAs. I found 6 to be too many on a 1-minute chart. I don't need that many. I have reduced it to only 2 MAs - 8MA and 15MA. I also have some of my own custom indicators (MACD, CCI, RSI, etc.) but you probably don't need those.

 

[megamuel]

Wow thanks Bolimomo. Thats quite impressive. What are the blue and red dots on your chart? There are so many lines there I can't even see the price! I sure hope this is working for the sake of your electricity bill with 15 screens on the go! Appreciate the advice, I've been playing around with different MA's and made some interesting observations Definately food for thought and I will read up on Guppy's work. One more question for those traders that make money... Is the plan to trade your strategy/technique until you double your initial capital, and then double your stake/trade size or is this not how it works? Thanks again Bolimomo,

Sam.

 

[Bolimomo]

What are the blue and red dots on your chart? There are so many lines there I can't even see the price! I sure hope this is working for the sake of your electricity bill with 15 screens on the go!

One more question for those traders that make money... Is the plan to trade your strategy/technique until you double your initial capital, and then double your stake/trade size or is this not how it works? Thanks again Bolimomo,

Sam:

The blue and red dots are another one of my custom indicators (I love TradeStation!). They are MoDiv (Momentum Divergence) indicators. Basically I have programmed TradeStation to look at price versus CCI (one of the momentum oscillators, you can use Stochastics or RSI or WIlliams %R or something). When price makes a higher high but the CCI makes a lower high - definition of a momentum divergence, just paint a red/blue dot. Red for overbought, blue for oversold. Usually that's when price will reverse. I can only say "usually". As you see from the price chart, there are times that the "overbought" just kept going higher (and vice versa). That's where experience comes in. When to "listen" to your indicator and fade the move for a reversal, and when to ignore it and get with the trend.

Actually it is the whole idea: Using GMMA, the price itself is not that important. You can approximate it. See jagged price moves as just noise. The Moving Averages will smooth out the prices for you.

Do a Google also on "rainbow stock trading" and read some of the posts in some forums. This guy took the multiple moving averages idea to the extreme. He uses something like 30 MAs and has deleted the actual price data on the chart. (He color-groups them so the pattern looks like a rainbow.) He purely follows the pattern. The actual current price is no longer important.

As of your other question:

I didn't really wait until I double my portfolio (it takes a look time to do. I am only up about 70% for the year 2008). I gradually increase my stake as I have consistent wins using the same set of methods, trading the same set of stocks. (If you are curious: I only trade 5 stocks, day-in day-out: SPY, GS, AAPL, RIMM, SKF. I see myself as one of the Market Makers in these stocks. LOL! ) Don't follow news. Don't do fundamentals. Don't join no chat room. Purely chart sniffing! LOL

P.S.: Electricity bill for 15 x LCD monitors (and 3 desktops + cable modem + DSL) is peanut compared to what the information can make you in profits.

 

[Tenapenny]

Sam:

You can use 3 MAs. I suggest you pick 8MA as the fast one, 20MA as the mid, and 60MA as the slow one. Just start observing how prices move in relation to the fast, mid and slow MAs to help you trade. Read up on Darrel Guppy's write-ups on GMMA to have a look at his original intent.

I use 1-minute chart to take side (long/short) and roughly when to enter. I use tick charts to time my orders. This is not for beginners because things happen too fast. You can take the approach but look at 10-min, 30-min, or 5-min at the shortest to trade.

Enclosed is one of the charts (and many indicators) that I look at. I have 15 computer screens in my trading room. So imagine 10 to 15 screens around me looking at different stocks for trading opportunities.

(The thick red/green lines are just what I drew: the opening 30 minute high/low, trade the breaks.)

My adaption from the GMMA is that: in the short-term group ("trader" group), Guppy uses 6 MAs. I found 6 to be too many on a 1-minute chart. I don't need that many. I have reduced it to only 2 MAs - 8MA and 15MA. I also have some of my own custom indicators (MACD, CCI, RSI, etc.) but you probably don't need those.

View attachment 43004

OMG I'm going into info overload. Best of luck with this. Think I'll just keep it simple being the simple soul that I am!

 

[grimesd]

Sam:

You can use 3 MAs. I suggest you pick 8MA as the fast one, 20MA as the mid, and 60MA as the slow one. Just start observing how prices move in relation to the fast, mid and slow MAs to help you trade. Read up on Darrel Guppy's write-ups on GMMA to have a look at his original intent.

I use 1-minute chart to take side (long/short) and roughly when to enter. I use tick charts to time my orders. This is not for beginners because things happen too fast. You can take the approach but look at 10-min, 30-min, or 5-min at the shortest to trade.

Enclosed is one of the charts (and many indicators) that I look at. I have 15 computer screens in my trading room. So imagine 10 to 15 screens around me looking at different stocks for trading opportunities.

(The thick red/green lines are just what I drew: the opening 30 minute high/low, trade the breaks.)

My adaption from the GMMA is that: in the short-term group ("trader" group), Guppy uses 6 MAs. I found 6 to be too many on a 1-minute chart. I don't need that many. I have reduced it to only 2 MAs - 8MA and 15MA. I also have some of my own custom indicators (MACD, CCI, RSI, etc.) but you probably don't need those.

View attachment 43004

This is a prime example of why you should trade your own system (or whatever works best for you). I wouldn't exactly call myself a novice trader, but this looks like a confusing mess to me. In my opinion MAs are just indicators (that I use all the time) but it's price action that's most important and I can't even see it here.

 

[Bolimomo]

This is a prime example of why you should trade your own system (or whatever works best for you). I wouldn't exactly call myself a novice trader, but this looks like a confusing mess to me.

I agree whole-heartedly that one should trade whatever works best for that individual.

My confusing mess had helped me make >100% in my portfolio so far in 2008 while S&P is down >45% so I am quite happy with it.

 

[Bolimomo]

P.S.

grimesd:

Instead of unsolicitedly nominating my trading system for the "confusing mess" award, perhaps you can respond to megamuel's original question and enlighten us how your simple price-action strategies work? This way, at least you can constructively contribute something to this board. Oh, that's right... your trading strategies are secretive aren't they?


megamuel:

I think this has partially answered your question on why most people keep their trading strategies secret. Because as soon as you have disclosed and explained your strategies/systems, there will be some expert trader yahoos come in and put you down. So... why waste our time? I kind of regret I had wasted my brain power and time posting my replies.

 

[megamuel]

Boli, just because grimesd doesn't like your strategy doesn't mean you wasted your brain power and time posting. I for one very much appreciate your advice and it has given me some great ideas for further research in developing my own strategy. These forums rely on people like you making positive contributions in a genuine attempt to help newbies so please don't feel that you wasted your time! I've been a member of a few other forums in the past (not trading related) but you always get the same types - genuine newbies wanting to learn, newbies who don't want to learn they just want answers, people who pretend to know it all but know nothing, people who know it all but are very patronising and think they are above everyone, and people who have a genuine interest in helping other people. You fit into the latter so please don't stop posting because you have a valuable contribution to give - the forum needs people like you. Thanks you once again and I agree I'd be very interested to see how grimesd trades and the strategy he uses. Not so that I or Boli can pick at it, because I am genuinly interested to see how other people trade and the strategies they use. So come on grimesd and take up the challenge!

Sam.