Lightning's Pit Stop

[Lightning McQueen]

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,

Hi CY

Come on then, spill the beans on the new simple strat, not another MA wonder, I don't believe the trading journal forum could cope with another one

Oh alright, just a little clue perhaps

don

 

[CYOF]

Hi don,

No chances to trade this week - and I want to set the rules out clearly first before I start anyway.

I am going to leave up the 50 & 200 SMA's on the daily, as these seem to be respected by the big institutional traders a good deal of the time.

The signals will be the easy part - 123 setups, WRB reversals and trendline breaks.

The hard part will be getting use to placing the stop and staying with it - as I have never traded this way before - but it seems like I will have to start accepting this if I am to make any progress.

I also have to start off with 3 contracts - so my entries will have to be very selective - no more shooting from the hip. Scaling out is required once some profits have been realised - more on that once I get started.

The first testing will require 20 trades - so my potential loss, if I get all wrong, which I will try and not let happen, may be as high as 20 x 3 x 10 (I am just taking 10 as the average stop level, but it will be dependant on the chart pattern, it may be less and it may be more) :

600 points x $5 = $3,000 + commissions.

Am I prepared to loose this amount - yes, no problem.

Of course I would rather not loose it all, maybe 1/2 or 1/4 even, but I have to be prepared to loose it all before I start.

The reason I am taking on this risk is, that by the time I complete the 20 trades I will have completed a very important step in relation to learning how to trade for consistent profits.

Upon completion of the 20 trades, I will have an Expectancy figure that will be the starting point for developing and comparing various trading strategies - and it should be obvious by now that I want to use the strategy that has the highest Expectancy figure.

I am looking forward to the challenge, and will start as soon as I get the time.

There is one major drawback, and that is time availability. As I may not be able to trade most days, I may find it hard to trade the intraday trends, so I may have to look at the longer timeframe and go out to trading the 30 min bars. Either way, as I will not be focused 100% I will need to be very careful, or else that $3000 may disappear very quickly.

The answer may be to wait for the best setups to develop on the daily chart, and then make time to get a trade or two done on the following day. If I can do this once per week, then we are looking at roughly 20 weeks to complete the sample lot. If I can make some time, I may place 2-4 trades per day, depending on the momentum, in this case I may complete the sample set a week or two.

Well, lets see what happens.

Either way, I am looking forward to it, and I now consider the $3000 gone, with my main goal to make it last as long as possible and complete some additional testing with the same $3K.

Regards,

 

[CYOF]

Hey don,

Are you gone asleep :cheesy:

So much for my new strat - well 100 point loss is not too bad I suppose.

I am going out to the longer timeframe - 30 min - using the One Time Framing strat.

Hope to try it out next week with a few live trades - this week is a wash out, too busy earning money instead of loosing some

Regards,

 

[Splitlink]

Hey don,

Are you gone asleep :cheesy:

So much for my new strat - well 100 point loss is not too bad I suppose.

I am going out to the longer timeframe - 30 min - using the One Time Framing strat.

Hope to try it out next week with a few live trades - this week is a wash out, too busy earning money instead of loosing some

Regards,

He's probably making a mint with his plan and doesn't intend to tell us about it!

Split

 

[Lightning McQueen]

Hey don,

Are you gone asleep :cheesy:

So much for my new strat - well 100 point loss is not too bad I suppose.

I am going out to the longer timeframe - 30 min - using the One Time Framing strat.

Hope to try it out next week with a few live trades - this week is a wash out, too busy earning money instead of loosing some

Regards,

He's probably making a mint with his plan and doesn't intend to tell us about it!

Split

Hi Split & CYOF

Making a mint.......sadly no, but have been keeping an eye on the strategy, all is well identifying a possible start of a trend but the trade entry is pants at present.

The issue is that on a live trade, entry is signalled right at the start of congestion, I make the trade and its sideways stuff all the way I dislike this, not good at all, I would rather be entering on a break of these areas. so my efforts now are to identify and learn whats going on here.

Im probably trying to enter a trade on or near support or resistance lines or Fibonacci lines. I have done a little initial research and they both seem connected to a slight degree to my issues. I am currently looking into Fib Retracements as a possible source of my probs, then turn it around and use them to my advantage.

CY
Very disappointed to read that you have turned your back on journals and the like. I suppose after your "think correctly" thread and your "enlightenment" your going to ignore us. Your welcome to drop by any time for a chat
I wish you well with your new buddies......don't drink any Kool-aid if offered (I had no idea what this was, had to look it up )

Split
Thank you for your support this year. my best wishes for the New Year to you and good trading.

Happy and successful New Year to all.


don

 

[Splitlink]

Hi Split & CYOF

Making a mint.......sadly no, but have been keeping an eye on the strategy, all is well identifying a possible start of a trend but the trade entry is pants at present.

The issue is that on a live trade, entry is signalled right at the start of congestion, I make the trade and its sideways stuff all the way I dislike this, not good at all, I would rather be entering on a break of these areas. so my efforts now are to identify and learn whats going on here.

Im probably trying to enter a trade on or near support or resistance lines or Fibonacci lines. I have done a little initial research and they both seem connected to a slight degree to my issues. I am currently looking into Fib Retracements as a possible source of my probs, then turn it around and use them to my advantage.

CY
Very disappointed to read that you have turned your back on journals and the like. I suppose after your "think correctly" thread and your "enlightenment" your going to ignore us. Your welcome to drop by any time for a chat
I wish you well with your new buddies......don't drink any Kool-aid if offered (I had no idea what this was, had to look it up )

Split
Thank you for your support this year. my best wishes for the New Year to you and good trading.

Happy and successful New Year to all.


don

At last, a word! Glad to have you back and wish you successful trading for the New Year.

Split

 

[firewalker99]

Hi Split & CYOF

Making a mint.......sadly no, but have been keeping an eye on the strategy, all is well identifying a possible start of a trend but the trade entry is pants at present.

The issue is that on a live trade, entry is signalled right at the start of congestion, I make the trade and its sideways stuff all the way I dislike this, not good at all, I would rather be entering on a break of these areas. so my efforts now are to identify and learn whats going on here.

Im probably trying to enter a trade on or near support or resistance lines or Fibonacci lines. I have done a little initial research and they both seem connected to a slight degree to my issues. I am currently looking into Fib Retracements as a possible source of my probs, then turn it around and use them to my advantage.

CY
Very disappointed to read that you have turned your back on journals and the like. I suppose after your "think correctly" thread and your "enlightenment" your going to ignore us. Your welcome to drop by any time for a chat
I wish you well with your new buddies......don't drink any Kool-aid if offered (I had no idea what this was, had to look it up )

Split
Thank you for your support this year. my best wishes for the New Year to you and good trading.

Happy and successful New Year to all.


don

Best of luck to you in the new year don! I'll try and keep an eye on your journal, but I don't want to disturb your process in any ay.

PS: You might attract more interest if you posted some charts, just a thought

 

[Lightning McQueen]

Best of luck to you in the new year don! I'll try and keep an eye on your journal, but I don't want to disturb your process in any ay.

PS: You might attract more interest if you posted some charts, just a thought

Thanks FW, the very best wishes for the new year to you too.

Charts will make things more interesting, but how many charts can I put up with a 5 MA on it...after a while this would be as interesting as watching paint dry.

Perhaps I could pop on my tradestation charts that I use as a kind of testbed 4 ideas and observations, they're a bit messy with colours, lines etc and shouldn't be taken too seriously as they are ideas in action, but they will show the fractal nature of the strategy, also the multi-timeframe element which I believe you were interested in. Sunday or Monday for that then

cheers

don

 

[Lightning McQueen]

The issue is that on a live trade, entry is signalled right at the start of congestion, I make the trade and its sideways stuff all the way I dislike this, not good at all, I would rather be entering on a break of these areas. so my efforts now are to identify and learn whats going on here.

Im probably trying to enter a trade on or near support or resistance lines or Fibonacci lines. I have done a little initial research and they both seem connected to a slight degree to my issues. I am currently looking into Fib Retracements as a possible source of my probs, then turn it around and use them to my advantage.

Before I get sidetracked I want to first continue with my exploration of my trade entry problems the chart below shows precisely what happens after the trade is taken, a bit of sideways drift before the upward move. The trade ends up successful but this in my view is not a high probability trade.

The fib retracement lines appear to give clues. I have not learned enough yet on these to form an opinion yet.

Is this sideways area caused by shorts adding to their losing positions before being swept away by the rising tide?

The example is on a daily timeframe for clarity, the same problem exists in the intraday timeframes but to a greater extent.

 

[Lightning McQueen]

If I may make one small comment.

There is at least one step below "implementing the rules", and it's a rather large one:


1. Study price movement.

2. Develop a set of preliminary hypotheses which take advantage of these movement and test them according to standard methodology.

3. Decide what strategy will best take advantage of what you think you've found.

4. Decide what tactics you're going to employ to implement it.

5. Carefully define the setups which put these tactics in play.

6. Develop a trading plan around this strategy, these tactics, and these setups.

In my experience, beginners rarely do any of this. They borrow something from somebody or somewhere and perhaps modify it somewhat, but they rarely go through the process themselves (it should come as no surprise that those who do go through the process succeed and that those who don't, struggle, often to the point of being driven out of the market). Some just try whatever seems like a good idea and hope for the best..

That magnificent quote is from this thread.

http://www.trade2win.com/boards/showthread.php?p=134091

My intention is to use this set of instructions to find the ideal setup for the 5 MA method.

When starting out its quite difficult to find a direction in which way to go, learn one thing and up pops another issue to deal with. Thankfully there are members on here that post gems like this.

You just gotta look to find.

 

[Lightning McQueen]

My testing set consist of 8 charts they range from weekly to 1 min. They are currently set up with simple moving averages (blue) that are Fibonacci numbers based, the one that surprised is on the 5 min chart with an SMA set at 1597!

The 5 MA doesn't really figure in these chart sets although they are there. The charts are really only for observing possible support / resistance from the ma's and their interaction with fib retracements, rather than illustrating any strategy.

 

[CYOF]

Hi don,

Happy New Year and good trading for 2007.

I wish you every success with your trading.

Regards,

 

[Lightning McQueen]

Hi don,

Happy New Year and good trading for 2007.

I wish you every success with your trading.

Regards,

Thanks CY, glad to see you back after the festive break I hope it was an enjoyable one and I'm looking forward to your future threads.

Perhaps it could be interesting if we can compare where we are at the end of the year. im certain from reading your previous posts that you will be miles ahead, thats down to me catching up and keeping up.

To start the New Year off I have requested a name change for a new persona and created a new avatar, nothing too profound, just a bit of fun with a hint of significance. I dont know how long this will take though, probably ages.

All the best to you in 2007

cheers

don

 

[CYOF]

Thanks CY, glad to see you back after the festive break I hope it was an enjoyable one and I'm looking forward to your future threads.

Perhaps it could be interesting if we can compare where we are at the end of the year. im certain from reading your previous posts that you will be miles ahead, thats down to me catching up and keeping up.

To start the New Year off I have requested a name change for a new persona and created a new avatar, nothing too profound, just a bit of fun with a hint of significance. I dont know how long this will take though, probably ages.

All the best to you in 2007

cheers

don

Hi don,

A nice rest it was and now back into the thick of things.

I have deleted my journal posts - as I felt that it is not the best way for me - I had my doubts starting off and after some insight form other members I have decided to concentrate on what matters most to me at the current time.

Daytrading Nas Stocks is what I do best - so no need trying to fool myself with other avenues at the moment. The only other thing that I am going to look at is commodities and options on commodities, as I have done some work here in the past, and I also see that Starspacer had a thread back in Mar06 on Energy commodities, which I have asked him to consider reviving.

I don't have a definite date set for resuming daytrading Stocks, but it will more than likely be one day per week for the start - possibly a Friday. I am hoping to start this one day per week in Feb - as Jan is busy with some travelling arranged.

This however, should not influence you in any way, and you do what you think is best for you.

In the end, we must all do what suits us best.

Regards,

 

[Lightning McQueen]

Due to time constraints I have been unable to give time to moving forward. with this in mind I was racking my brains for a solution, cruising the site I came across the T2W share compo -

" this month’s prize is a whopping £500, deposited into the winners' Finspreads account."

Hey i've gotta fins account, I thought, how difficult could that be, I thought. Buy squillions of penny shares in an uptrend and bingo - yeah right

My first week has been a complete disaster, never mind onward and upward.

trades so far

http://www.trade2win.com/competition/playerfolio.php?player=9138

 

[Lightning McQueen]

Problems with charts on penny stocks

Im using prorealtime's free end of day online charting, good scanner by the way, shame about the charts. To illustrate this I have posted two charts of my latest trade JVP.

As can be seen they portray a different story of whats going on the prorealtime chart shows a nice break up from the MA, the T2W paritech chart shows, well, not much at all is going on with this stock, it rarely trades at all does it.

I will in future check how many times a month a stock is likely to trade before trading it rather than eyeballing a chart and not checking dates at the btm :idea:

Probably gamble and wait and see if this stock trades next week at some point after that bin it.

By the way, it was good to see Splitlink up in 2nd spot last week. well done

 

[barjon]

Before I get sidetracked I want to first continue with my exploration of my trade entry problems the chart below shows precisely what happens after the trade is taken, a bit of sideways drift before the upward move. The trade ends up successful but this in my view is not a high probability trade.

The fib retracement lines appear to give clues. I have not learned enough yet on these to form an opinion yet.

Is this sideways area caused by shorts adding to their losing positions before being swept away by the rising tide?

The example is on a daily timeframe for clarity, the same problem exists in the intraday timeframes but to a greater extent.

mornin' LM

hope you've not got sidetracked (again) from your working up of your strategy by a sudden chase for penny stock gold :cheesy:

interesting that on the chart you posted with the above quoted post my entry bar would have been on your signal bar.

cheers

jon

 

[Lightning McQueen]

mornin' LM

hope you've not got sidetracked (again) from your working up of your strategy by a sudden chase for penny stock gold :cheesy:

interesting that on the chart you posted with the above quoted post my entry bar would have been on your signal bar.

cheers

jon

Good morning jon

Well yes, its only a very slight detour of sorts, I have valid reasons for this. I've written up my strategy into prorealtime's screener and well, as you can see there are a few probs, but im learning the platform fast.

I have noticed that a 5 MA based strategy will mimic to a degree a few other strategies eg the 1-2-3 pattern, yours strat is giving an earlier signal by one bar. good luck with it .

cheers

don

 

[Splitlink]

Good morning jon

Well yes, its only a very slight detour of sorts, I have valid reasons for this. I've written up my strategy into prorealtime's screener and well, as you can see there are a few probs, but im learning the platform fast.

I have noticed that a 5 MA based strategy will mimic to a degree a few other strategies eg the 1-2-3 pattern, yours strat is giving an earlier signal by one bar. good luck with it .

cheers

don

I was interested in your charts of a very cheap stock. Such stocks are so sporadic that I wonder if their charts can be used with any degree of accurate forecasting in mind. Volume is so low that even the smallest trade will move the price an enormous amount, percentagewise. That is the name of the game, of course. No serious purchaser of stock for a portfolio would use the tactics needed here, particularly Barjon. Just think, Jon, 50,000 quids worth of shares of 1 penny each--that would make you dream at night!!!

To tell the truth, if it wasn't for the fact that you can't lose money here, I might find Socrates' naked writing more attractive.

Split

 

[Lightning McQueen]

I was interested in your charts of a very cheap stock. Such stocks are so sporadic that I wonder if their charts can be used with any degree of accurate forecasting in mind. Volume is so low that even the smallest trade will move the price an enormous amount, percentagewise. That is the name of the game, of course. No serious purchaser of stock for a portfolio would use the tactics needed here, particularly Barjon. Just think, Jon, 50,000 quids worth of shares of 1 penny each--that would make you dream at night!!!

To tell the truth, if it wasn't for the fact that you can't lose money here, I might find Socrates' naked writing more attractive.

Split

Good point Split, the charts are really deceptive due to as you say their sporadic trading nature. now I have made my trade I will stick with it for the short term in the hope they actually move at some point soon 7.5 million of the bu&&ers

Im working on the screener now to see if I can get results that only show stocks that trade every day rather than maybe at best 4 or 5 times a month.

All the best for next week, see you at the top.