Lightning's Pit Stop

[Lightning McQueen]

fins account now funded

strategy reviewed and set.......check

surfboard waxed.......................check

lets get ready to ride those ftse waves.........surfs up dude!

 

[Lightning McQueen]

Trading on Monday

Mondays start was, well, not much of a start at all really , opened my first trade short, got ready to ride the wave down and the ftse went sideways for what seemed like ages. Not a problem I thought, I have the trend on my side, its going down any moment. So here I am stuck with my position flitting between positive and negative profit, my mouse hovering over the close button just in case and some contrarian suicide jockey (you know who you are) in the chatroom decides to call a long . well you can imagine the fluster that that caused the green trader at this end, closed my position out. and yes you guessed, down went the ftse.

moral to the story......no more chatrooms for me for a while

Monday 1 trade + 2 points

other than that minor setback, plan and strategy looking ok to me so far im happy to continue today without changing anything

might try the dow today as not much time for ftse, ftse again tomorrow.

 

[Lightning McQueen]

No more trades for me this past week I have been using the time to familiarise myself with the fins platform some more and tweak the setup and trade entry rules. All oscillators are now gone, whipsaws are now kept in check by using multi time frame charts - bit of a pain this bit as the fins platform will not allow this

As last week progressed I realised my computer setup was not at its best for easy multi timeframe chart watching and quick easy trade execution this has now been sorted and is an improvement in the way I see the information.

I have now tested my strategy across many timeframes from 1 minute to monthly and on many instruments - indices, commodities and fx. although I am sticking to index trading for now I would like to have a go at fx in the very near future

The fins trading academy folder arrived, looks useful stuff, well presented, I will start reading this over the weekend

 

[CYOF]

Hi don,

Gone a bit quiet - are you studying or testing - or both.

Here is my opinion - FWIW - concentrate on 1 market only after you have identified what you like best doing - let it be FX, FTSE, DOW or Stocks.

Then do a little demo trading - until you are happy that you can at least enter and exit trades on paper first.

Next - after seeing a simple strategy work - trade it and stick with it - either until you are convinced that it does not work or that it might well work out.

Trade small initially - this should go without saying - to keep your risk level low until you prove / disprove your ability using your current setup.

I am going to start trading the YM with real $ once the funds have transfered - albeit with limited data and order entry resources, which will mean additional risk - but if I can make money with the additional risk then in theory it should be easier when the additional risks are removed.

Having said that, if it works out well I will continue to use it as is - and test to see if any changes with the additional risk removed improves on the results - if not I will just keep using it as it is.

Regards,

 

[firewalker99]

Hi don,

Here is my opinion - FWIW - concentrate on 1 market only after you have identified what you like best doing - let it be FX, FTSE, DOW or Stocks.

Then do a little demo trading - until you are happy that you can at least enter and exit trades on paper first.

Next - after seeing a simple strategy work - trade it and stick with it - either until you are convinced that it does not work or that it might well work out.

Trade small initially - this should go without saying - to keep your risk level low until you prove / disprove your ability using your current setup.

I am going to start trading the YM with real $ once the funds have transfered - albeit with limited data and order entry resources, which will mean additional risk - but if I can make money with the additional risk then in theory it should be easier when the additional risks are removed.

Having said that, if it works out well I will continue to use it as is - and test to see if any changes with the additional risk removed improves on the results - if not I will just keep using it as it is.

Regards,

Very sensible steps, and I agree to them except on one point.
If you have developed a simple strategy that works on one market, you could adjust it to work on more than one market, taking into the account the specifics that determine that market. As a consequence you can increase the number of opportunities for taking a high probability trade. This obviously is a matter each trader has to resolve for him, but basically I don't understand why everybody argues "better to stick to one market"... In the beginning: definitely. Once your trading gets under way: don't see any reason why. People who trade FX usually trade on different currencies simultaneous...

 

[Lightning McQueen]

Hi CY

Yes I am in a heavy study session mode - hitting a bit of an impasse really, no forward momentum at all, hence no journal entry for a couple of weeks

The problems stem from the amount of time I have to trade, either mornings on the ftse or afternoon / evening on the dow. Every time im sat there waiting for something to happen and nothing does, usually its sideways and my strategy is telling me not to trade.
The lower timeframes are showing trade action but the higher timeframes are saying stay out. im trying to shift the emphasis of the strategy to the lower timeframes while keeping the anti whipsaw rules of the higher timeframes and of course keeping everything simple

I do realise that I have to actually have to do something to move forward so to this end if anyone would like to kick my backside if I dont post trades on monday - please do so! :cheesy:

Thanks for the top tips they are much appreciated and good luck with your YM trading and your journal. I will look in to see how you getting on.

cheers

don

 

[CYOF]

Very sensible steps, and I agree to them except on one point.
If you have developed a simple strategy that works on one market, you could adjust it to work on more than one market, taking into the account the specifics that determine that market. As a consequence you can increase the number of opportunities for taking a high probability trade. This obviously is a matter each trader has to resolve for him, but basically I don't understand why everybody argues "better to stick to one market"... In the beginning: definitely. Once your trading gets under way: don't see any reason why. People who trade FX usually trade on different currencies simultaneous...

Agree 100%, but I think I may be right in saying that a lot of traders look at a lot of different things when they start out - I know that I did - and this has the effect of making you get nowhere.

The only way I got over that hump was to quit my job and go fulltime - and all I will say is that it was a rude awaking - yes I learned a lot - but looking back it sure as hell can be done a lot easier, and with even better results.

As you rightly say, and my own plan is to trade Nas Stocks primarily (bread and butter) between 09:30 & 11:00 max, and then utilise the remaining time to trade FX and Commodity Options.

Once you can read a chart and place low risk trades (this is the hard part of course) I also believe that the same logic can be applied to any market - one just needs to be aware of the big events that can throw all of your analysis out the window - which thankfully are not too frequent.

 

[CYOF]

Hi CY

Yes I am in a heavy study session mode - hitting a bit of an impasse really, no forward momentum at all, hence no journal entry for a couple of weeks

The problems stem from the amount of time I have to trade, either mornings on the ftse or afternoon / evening on the dow. Every time im sat there waiting for something to happen and nothing does, usually its sideways and my strategy is telling me not to trade.
The lower timeframes are showing trade action but the higher timeframes are saying stay out. im trying to shift the emphasis of the strategy to the lower timeframes while keeping the anti whipsaw rules of the higher timeframes and of course keeping everything simple

I do realise that I have to actually have to do something to move forward so to this end if anyone would like to kick my backside if I dont post trades on monday - please do so! :cheesy:

Thanks for the top tips they are much appreciated and good luck with your YM trading and your journal. I will look in to see how you getting on.

cheers

don

Hi don,

The main thing is that you do as you see fit - and don't let anyone, including me, influence your decision as to when you will and will not trade.

After all, we all have the family issues to deal with and like yourself, I also find it very hard to get the time.

Once you don't walk away and leave it for months on end without doing anything you should be fine, and you will find that the more you do it the easier it becomes - as with everything in life.

FWIW, I personally think the the following are some KEY areas that need to be studied in order to place low risk trades: some will be common to all markets and others will be market specific

Line & Bar Charts - Daily Trend Reversal / Continuation Signals
Candle Formations - Trade Entry / Exit Signals
Trendline Use -Trade Entry / Management / Exit
Price Action Indicators - (3 T's) Trade Entry / Management / Exit for Dow Stocks and YM

- a low risk trade been taken as " the price will move as you anticipated it would very soon after entering the market".

A low risk trade, for me, does not mean that you loose a small amount of money!

Regards,

 

[Lightning McQueen]

Hi FW & CY

Thanks guys for your valuable insights and suggestions, its all very much appreciated as always

I have been paper test trading live this week and have basically sorted the strategy for next week. I will be posting charts of the ftse and dow over this weekend showing trades as I see them with hindsight. Next week going live to see how the strategy holds up trading it for real starting monday - now thats a line in the sand, no going back now, only forward.

cheers

don

 

[Lightning McQueen]

5 min charts of the ftse with trades marked out in hindsight by the strategy.

The idea behind doing this is to have a benchmark to compare my live trading, also it was good practice in cross referencing the different timeframes for crosses and trend.

dow tomorrow

 

[firewalker99]

5 min charts of the ftse with trades marked out in hindsight by the strategy.

The idea behind doing this is to have a benchmark to compare my live trading, also it was good practice in cross referencing the different timeframes for crosses and trend.

dow tomorrow

Those are obviously very nice trades, which hindsight explains only partly. May I ask how you determine when to exit your position? If you are able to "ride" the trend as shown in the chart examples, you're in for some very profitable days! But take the 4th chart for example, why do you exit at 6215 at that particular time and not at 6215 two hours ago?

Also, are you exiting your position along the way or do you stay in the trade till the end with all your contracts? Another question for entering a trade, do you scale in?

 

[Lightning McQueen]

Those are obviously very nice trades, which hindsight explains only partly. May I ask how you determine when to exit your position? If you are able to "ride" the trend as shown in the chart examples, you're in for some very profitable days! But take the 4th chart for example, why do you exit at 6215 at that particular time and not at 6215 two hours ago?

Also, are you exiting your position along the way or do you stay in the trade till the end with all your contracts? Another question for entering a trade, do you scale in?

FW apologies for taking so long to answer, I was busy finishing the dow charts

Yes the strategy should be able to pick out and be able to ride the trends and identify the bends at the ends (in realtime, yeah righto matey )

The strategy calls an exit when the higher timeframe shows an end to the trend, so to answer your question why there was no exit two hours previous on the fourth chart the trend was not signalled over until the later rise after 13:00 pm. from here the market goes into a 15/20 point range which the plan allows for and I could have marked on the chart 3 trades from 13:00 but didn't find that useful for my purposes right now.

Sorry didn't understand the last paragraph, I'm not that bright for a light :cheesy: apart from I dont intend to scale in. I may in the future bring in scaling out of trades, that depends on future success and position sizing. I have to get past the start line first :cheesy:

cheers

don

 

[Lightning McQueen]

nothing different here really for the dow, very much like the ftse in terms of running the strategy, just more points on offer.

I was going to do an fx run through but on reflection it looks like and feels the same strat wise, so im not bothering at this point.

 

[firewalker99]

FW apologies for taking so long to answer, I was busy finishing the dow charts

I noticed you responded a couple of hours later, I'd be happy if anyone responded that quick to any of my posts

The strategy calls an exit when the higher timeframe shows an end to the trend, so to answer your question why there was no exit two hours previous on the fourth chart the trend was not signalled over until the later rise after 13:00 pm. from here the market goes into a 15/20 point range which the plan allows for and I could have marked on the chart 3 trades from 13:00 but didn't find that useful for my purposes right now.

Have you determined how far you would like price to travel against your trend? On this chart you shorted at 6242, you kept in while it went down to 6212 but you weren't bothered that price gained momentum upwards back to 6227? You say the end of the trend wasn't signalled until after the upbar after 13pm, but you indicated an exit before the bar at 6215. If I understand correctly in real time you would have exited at 6220. Confronting all this before starting to trade live will help you in facing any possible disappointments.

Sorry didn't understand the last paragraph, I'm not that bright for a light :cheesy: apart from I dont intend to scale in. I may in the future bring in scaling out of trades, that depends on future success and position sizing. I have to get past the start line first :cheesy:

Well if you want to get off with a good start, it's better to prepare and test thorougly. There shouldn't be a rush to "get in". You don't need to scale in or out if that's not part of your strategy. But have you thought about how you will enter a trade then? Placing a market order along the way or placing a limit order (at what price)? What happens if your limit price just gets missed, will you chase the market and get in a bit higher? Have you calculated the amount of money you're willing or able to risk/lose on any single trade?

You don't need to answer any of these questions to please me, but those are things I would be asking myself. Just a thought to keep things in perspective. You may well be further ahead than I'm aware off, but I'm just reading what's in your journal. By no means I want to slow you down, but in the flowcharts you're refering to a "long entry trigger" or "short entry trigger", but I can't seem to find any references to exiting a trade. As you're probably aware off, entering a trade is one thing. Your exit strategy might be quite something different but at least as important...

 

[firewalker99]

nothing different here really for the dow, very much like the ftse in terms of running the strategy, just more points on offer.

I was going to do an fx run through but on reflection it looks like and feels the same strat wise, so im not bothering at this point.

I'm assuming you're entering a trade long when a bar is formed above the SMA line and exiting when a bar is formed below? Please correct me if I'm wrong, but that's how it looks based on the charts you posted.

Let's take the 3rd chart. These are my views on that one:
1) Long around 12123, but a couple of bars further you see three bars below the line, but you stay in, why's that? Because you have a stop in place below 12117 (the low of those bars) or for any other reason?

2) You enter short and exit the next one around 17.45 but your real exit point is after the upbar is formed, because while it's developing you can't say for sure this will be a bar above or below the line, right? So you're exit would be around 12140 which is very close to your entry price...

If your exit is based on something you saw on a higher timeframe, then all of the above is pretty irrelevant, but it could be interesting than to post those higher timeframe charts next to the lower ones.

 

[CYOF]

Hi don,

Some thoughts:

Master entries first - then reverse trade with signal from system (if supporting information says GO).

Here is the main problems that I see - no one knows what will happen next, so you will never know if the current move is a reversal in trend or a small pull back.

You can make a guesstimate, based on what broader markets are doing, and set your stops based on S&R levels, fibs, trend lines, etc.

But, if we are to believe POP and Rule No.1 - which I do by the way - we never let the market prove us wrong, only always let the market prove us right.

So, in keeping with Rule No.1, exit quickly if not proven right (some criteria required). If trade moves in anticipated direction - use you setup and stick to it - so for me this is stay with it until the 3MA turns with supporting information.

The big question is - if I take all the reverse signals, will the system generate enough profits to cover commissions and small losses due to bad fills.

This is why you must test by papertrading - prove that it works first - if it works keep using it until it stops working.

In summary - timing of entries is KEY, and then try and get a charting layout that will keep you in a trade until a price reversal - the decision to reverse trade then based on supporting information and trading experience.

Just some thoughts.

Regards,

 

[Lightning McQueen]

FW

Thanks for the feedback, lots of good points there to think about and go through -

Back testing is best described as problematical due to the discretionary nature of the entry and exits (not something I wished to create but there you go). Everything is being forward tested which obviously is a slow process hence the appearance of a rush to "get in". I also haven't updated the trading plan in the journal for a while, although the strat has moved on a tad, will do this ASAP.

Your right that a drawback of the strategy is that if the market makes a rapid move then I will be left stranded without an entry. it is a problem, I have no answer to this, other than leave alone and not chase for now.

Regarding posting charts of all the timeframes at once, yes I agree that it may be of interest, it just means a lot of work and no real benefit to my learning experience or what I intended for my journal. I see you and others posting interesting charts and stuff, so I may post limited triple charts of various scenarios of the strat in action, when time permits.


CY

Well our strategies are not too dissimilar are they, you are using a 3 MA for trend direction, (not sure what your trigger is though,other than its direction). im using a 5 MA for trend and trigger.

Here is the main problems that I see - no one knows what will happen next, so you will never know if the current move is a reversal in trend or a small pull back.

Well thats the idea of the strategy, to try and determine whats just a pull back and trade the predominant trend of the day, at that moment, for a high probability trade.

Liked your Dow chart, much cleaner than mine, what gives in the kitchen

cheers FW & CY

don

 

[CYOF]

Hi Don,

I have started live trading - bad results today due to chart setup and hesitation.

I am changing to the 5 min Bar with the INDU for placing live trades on the YM - stripping everything else including the MA's.

The only additional lines I am going to use is the PDH, PDL, Open, Last, DH and DL.

How are things going with you?

Regards,

 

[Lightning McQueen]

Hi CY

I had read of your bad day today in your journal, sorry to hear that its not going ok

As you appear to have changed a lot strat wise perhaps a period of reflection on your plan and strategy would be a good idea at this point , followed by some testing before more live trading, just my thoughts there.

Myself I have completed the live forward testing and sorted whats what. I am only waiting for a period of time that I can concentrate fully on trading, without interruption, not an easy area to sort due to shift patterns and other commitments at home.

Well the markets will still be there when I do find the time, so no rush I suppose.

best of luck

don

 

[CYOF]

Hi don,

Fairly busy at work, so may not get a chance to do any trades this week.

I am however, thinking all the time about how the new strategy may be best applied.

All I will say for now is that it is going to be very simple - so simple that my 8 year old daughter will be able to use it.

Who knows, it may actually work!

Regards,