My trading strat.......

[black bear]

Its an upside down world for sure

What about a contrarian setup!!!

I've been pondering the amazing number of long signals given off at tops just as it drops, and same for short signals. Therefore I wonder just out of humorous curiousity, what if I took the opposite trade for each signal???

Here is what I got. I did a manual backtest of 2 days 1m data and tried to identify those periods that were out of sync. Usually triggered by some very sharp up and down moves with wide ranging candles. Very choppy and ranging.

These are the trades and stats I came up with (note also that each exit was totally and purely mechanical based on the changing SAR or MACDH. They were surprisingly non-lagging unlike the problems with exits in the normal system.

The key is when a long signal is given, go short instead and exit when the MACD or SAR changes. It is as though the MACD has been shifted forwards or backwards by 4 or more bars so it is out of line with the SAR. When the volatility narrows again with small candle bars either beginning to trend or a narrow range then things get back in sync and time to abandon the contrarian strategy.

Anyway, here are the trades (not including the spreads or commisions). I entered each long at its highest price, and each short at its lowest so these are conservative profit/losses and would probably cover the spread. I gave each trade its lowest proft rather than its best.

2 days 1m data.

20 out of sync trades.

17 profits
3 losses

All profits small.
But every exit purely mechanical with no second guessing.

+76.1 points total profit.
-6.8 total loss

Biggest win +12.8 (only 5 trades at +5 or above, so small profits)
Biggest loss -5 (based on a -5 stop loss)

Just something to look at that I found amusing. I haven't had chance to really nail it down because I just got the idea at work tonight and remembered to do a manual backtest when I came home.

I would appreciate your ideas on this. Is it too risky? Seems less risky and more mechanical than the other way?? or am I being very silly??

I looking at this as a solution/focus problem solving exercise. I am constantly looking for little caveats and improvements. I'm t

regards,
Scott

Hi Scott

Very Good post and thoughts Scott

The market makes many Highs and many Lows in a day but only one true High and one true Low

Andy

 

[Splitlink]

What is the trend today? My opinion is long, still, and I am not shorting until that opinion changes. even though some good profits were made by shorters today.

Split

 

[black bear]

Long

What is the trend today? My opinion is long, still, and I am not shorting until that opinion changes. even though some good profits were made by shorters today.

Split

I agree Split Long and just took a -12.5 pt loss at the bottom of open hour range on the strength of it I will go against the trend intra day but not the time frame I am trading and I no location of and determined trend of higher time frames etc

But quick loss (the 1st) is always the best loss and was certainly true this time You can always re-enter later

DO NOT RUN A LOSS

Big News out later, volumes yesterday lowest for quite some time, run up to Christmas always the same, will tread very carefull untill New Year Split, it could get very scatty for next few weeks.

Hey we are on the wrong thread Split, we have strayed of thread again

Sorry all

Andy

 

[Splitlink]

Would you believe that after the lousy morning that we have had (except for the shorters, of course, who are saying what a twit Split is) that the SP500 is still above what I sold it for last night, just before the close? That is what I mean when I say "Watch the main trend". If I had wanted to hold that overnight I would still be in profit.

Split

 

[Splitlink]

Regardless of what I posted earlier, I sincerely hope that you were all short today.I didn't get any signals and stayed out.

Good trading

Split

 

[ceydababy]

Trend Trade

Hi Guys,

I am taking the contrarian view. I believe that from 8am to around 10/11am it is possible to hit the FTSE on the long and short side and still be profitable. Ironically today I made my profit on the long side and had a break even on the short side.

I agree with Andy that it is imperative to cut losers quickly.

I too got hit on those same two trades CU2. It was a bugger. However, there was a long prior to the two dodgy moves that would have paid out a handsome profit on a two position strategy. Also the signals afterward were very strong.

In market conditions like today, 90% of setups on a 1 minute chart were going to get you in to trouble. Very spikey and choppy...conditions not good at all.

When trading the FTSE I really am trying now to get my points by 11am and then take a step back. If the market looks choppy and volatile in anyway I get out.

Got hit tonight on a smart **** trade...though my SB companies prices were out of sync....Guess what...They wern't. That meant a MINUS 25 hit on the dow. By the time the trade was filled I was -15....hmmmmm

Anyways, looking to make that 25 back on the FTSE tomorrow AM !!

So my opinion in summary, it is ALWAYS SAFER to trade in the direction of the bigger trend. However, it is possible to get profit on a smaller time frame trading against the trend. Just be sure to cut it quick if it starts to go wrong.

Also I ALWAYS look for 10 points. As soon as my positions go 6+ points in profit I will come out flat on one lot and often two if the market pulls back. Today I had a short at 57.3 that managed to get to 48.3 it pulled back and I got both out flat. As soon as the price hits 10 I get out of one position. To many times I have cut a position only to see the price continue on going. As someone posted earlier no one knows what the next candle stick will bring so I would rather be in than out (as long as signals tell me I am right !!

From January 2008 I will be upping my game to 3 positions. One will be out at +10 with the stop on the remaining two put to flat.

I am confident that everytime I trade I do EXACTLY the same thing so my approach is consistent. I find this helps. Don't get me wrong it can be frustrating to see 2 x 9 points on the table and then come out flat, but not as frustrating as taking 2x 9 points only to see a 1 x 10 and a 1 x 25 on the table, that sucks.

When the market is tight like it has been over the past few days the 10 points per move are increasingly difficult to get and frustration can be a killer. But I believe stick to your plan and the rest will follow.

 

[gorney]

I notice from posts the method puts up plenty of trades, fine if your nailing them that day

If not I would consider max entry per day rule with a method like this, perhaps 3, very important if your new to trading IMO, can lead to very poor trading habits if not checked.

Not to mention the total damage it does to your head if it all goes wrong on a day and inexperience leads to chasing your loss"s

Indian with one arrow often returns with more game for the pot than Indian who left camp with many arrows

Hope some of that useful, trade well all

Andy[/QUOTE]

Thanks Andy, ceydababy, splitlink

You brought me back to my senses like a hammer hitting a nail.

I only traded a few this morning between 8-11am. Using the higher time frames to gauge things but still making my entries on 1m.

Only need to make a few trades at most on a good day. Better that way. I only like to stay indoors on the grey, dismal winter days. Today was nice and sunny, so I went out.

Funny thing today, my first couple of trades went well on the long side, then a stop out on the short, but then a profit on the short side to cancel out the loss. So ended the morning on +8.1. Things were crazy so I called it a day.

I really like this system. I've added it to my EOD scan on the FTSE 100 for my longer term trades. Its coming up with a few prospects to go on my watchlists. I'm not sure yet if the intra-day trading is for me but i'm having fun finding out. I like the way the SAR helps to filter out a lot of the MACD crossovers. Reduces number of whipsaws.

Happy trading,
Scott

 

[cu2]

ceydabay and split

I agree with you 100% ceydabay. I also do not trade past 11am. Also saw the big moves I missed, I reread your strat rules and that cleared up what to do if the signal changes after your in.

Thank you also Split for your words of wisdom, I will be using some of that info for the FTSE strat.

As I trade the Dax first hour, I am missing some good moves on the FTSE. Dont know if I could juggle 2 at the same time as it is full on, yesterday took 12 points within a couple of minutes on the Dax, that's my style, but I have less experiance with anything other than this system I use now.

The FTSE seems to give more points and trend a little longer making your strategy better profit as mine for the dax. Ceydabay maybe you could answer me this, the first couple of trades in the morning - how high is your success rate? What you shared with me on chat was excellent, but I would like to know on a longer time scale with your style, as we have very simliar exit techniques.

Yesterday I went in short once on the FTSE after the trading range broke with fast price action, came out flat as it didn't continue.
Something that I have found often if you have a fast moving trending couple of bars no less than 2, (don't mix it up with a spike) and a signal if you jump in you can catch fast points to be able to move your stop to flat pretty well straight away. Out of all the trades I have done that has been the most successful without any minus points pain.

 

[cu2]

On a lighter note

Mark we need a name for your strategy or do you prefer "My trading strat...."

Idea's
MHPS - short for Macd History gram and PSar

or Marksway or +10 What ever.

This strat has to get a name, don't u argee!

 

[gorney]

I agree with you 100% ceydabay. I also do not trade past 11am. Also saw the big moves I missed, I reread your strat rules and that cleared up what to do if the signal changes after your in.

Thank you also Split for your words of wisdom, I will be using some of that info for the FTSE strat.

As I trade the Dax first hour, I am missing some good moves on the FTSE. Dont know if I could juggle 2 at the same time as it is full on, yesterday took 12 points within a couple of minutes on the Dax, that's my style, but I have less experiance with anything other than this system I use now.

The FTSE seems to give more points and trend a little longer making your strategy better profit as mine for the dax. Ceydabay maybe you could answer me this, the first couple of trades in the morning - how high is your success rate? What you shared with me on chat was excellent, but I would like to know on a longer time scale with your style, as we have very simliar exit techniques.

Yesterday I went in short once on the FTSE after the trading range broke with fast price action, came out flat as it didn't continue.
Something that I have found often if you have a fast moving trending couple of bars no less than 2, (don't mix it up with a spike) and a signal if you jump in you can catch fast points to be able to move your stop to flat pretty well straight away. Out of all the trades I have done that has been the most successful without any minus points pain.

After doing a review of my previous days trading this system on 1m bars I noticed that between 8-11am I had -20.20, +37.20. Total profit +17. The rest of days trading I lost -10.10 to end the day on +6.90. Also my four biggest profits were before 11am and if I had the +10 profit stop as suggested by ceydababy, those four profits would have been +40.

There's a lesson for me. All day trading just gave me squiffy eyes, aching bones and less money. But at least I got some experience watching the price action.

cu2,

I noticed the big fast moving candle bars too. But its too quick for me. I daren't jump in when it goes that quick because sometimes when the candle shoots up it comes back down just as quick on 1m bars before i've had chance to change my stop loss. But I think you have a good point there if you can do it quicker enough. I'm not really set up for that speed in processing my orders. Good luck if you can do it! quick on the draw!

regards,
Scott

 

[ceydababy]

I agree with you 100% ceydabay. I also do not trade past 11am. Also saw the big moves I missed, I reread your strat rules and that cleared up what to do if the signal changes after your in.

Thank you also Split for your words of wisdom, I will be using some of that info for the FTSE strat.

As I trade the Dax first hour, I am missing some good moves on the FTSE. Dont know if I could juggle 2 at the same time as it is full on, yesterday took 12 points within a couple of minutes on the Dax, that's my style, but I have less experiance with anything other than this system I use now.

The FTSE seems to give more points and trend a little longer making your strategy better profit as mine for the dax. Ceydabay maybe you could answer me this, the first couple of trades in the morning - how high is your success rate? What you shared with me on chat was excellent, but I would like to know on a longer time scale with your style, as we have very simliar exit techniques.

Yesterday I went in short once on the FTSE after the trading range broke with fast price action, came out flat as it didn't continue.
Something that I have found often if you have a fast moving trending couple of bars no less than 2, (don't mix it up with a spike) and a signal if you jump in you can catch fast points to be able to move your stop to flat pretty well straight away. Out of all the trades I have done that has been the most successful without any minus points pain.

Hi Guys,

Hit rate on the first few trades is running around 90%. A one minute chart is ideal for picking up the turns that are often to be found on open. As you know CU2 I have been +70/80 points on occasion within an hour or so of the open. Personally I am now looking to make my money in these first few hours and then maybe start looking at some of the other smaller European Indicies for some longer term positions.

Don't get me wrong often before the Dow opens you can get some good moves too. But I agree with what I have read elsewhere that once the dow opens the FTSE becomes a tad unpredictable.

Following the old adage of make hay whilst the sun shines that is what I am intending to do. Here's to this AM....let's see what we can do on the open !!

Good trading everyone....CU2 I will probably see you later in skype...should be around this am.

 

[gorney]

Whoosh. Missed that one!

Hi Guys,

Hit rate on the first few trades is running around 90%. A one minute chart is ideal for picking up the turns that are often to be found on open. As you know CU2 I have been +70/80 points on occasion within an hour or so of the open. Personally I am now looking to make my money in these first few hours and then maybe start looking at some of the other smaller European Indicies for some longer term positions.

Don't get me wrong often before the Dow opens you can get some good moves too. But I agree with what I have read elsewhere that once the dow opens the FTSE becomes a tad unpredictable.

Following the old adage of make hay whilst the sun shines that is what I am intending to do. Here's to this AM....let's see what we can do on the open !!

Good trading everyone....CU2 I will probably see you later in skype...should be around this am.

hi ceydababy,

did you see that signal at 07:56 just now? wow! i missed it completely. There was a tiny little green bar (change from red) then it changed back to red, then the 2nd bar entry signal. Then all of a sudden WHOOSH! down it went with a big gap!! from 6478-6450 ish. Wow. What a move!

Its okay that I missed it because the green bar so small I didn't see it and thought we were still in the red. Would you have taken this short signal?

I am okay though. I am learning patience like that hunter with one arrow. I was not tempted to chase after the trade. If i miss it, then thats just the way it is. Wait for next one.

Okay, bye
regards,
Scott

 

[gorney]

hi ceydababy,

did you see that signal at 07:56 just now? wow! i missed it completely. There was a tiny little green bar (change from red) then it changed back to red, then the 2nd bar entry signal. Then all of a sudden WHOOSH! down it went with a big gap!! from 6478-6450 ish. Wow. What a move!

Its okay that I missed it because the green bar so small I didn't see it and thought we were still in the red. Would you have taken this short signal?

I am okay though. I am learning patience like that hunter with one arrow. I was not tempted to chase after the trade. If i miss it, then thats just the way it is. Wait for next one.

Okay, bye
regards,
Scott

just looking at it again, the 2m chart gave a clear signal that was easier to spot than the 1m on this occasion. It was primed for a break up or down but I was half asleep and not really ready for such a reaction.

 

[gorney]

just looking at it again, the 2m chart gave a clear signal that was easier to spot than the 1m on this occasion. It was primed for a break up or down but I was half asleep and not really ready for such a reaction.

i was going a ask a quesion. There was the gap up this morning. I noticed that this sudden breakdown on at 07:56 with the short signal on the 1m and 2m chart almost closed the gap.

I was going to ask if anybody had any opinions about trading these gaps on opening. Would anybody have considered taking this signal or would I have been savvy to have left it or on this occasion missed it by accident?

 

[gorney]

i was going a ask a quesion. There was the gap up this morning. I noticed that this sudden breakdown on at 07:56 with the short signal on the 1m and 2m chart almost closed the gap.

I was going to ask if anybody had any opinions about trading these gaps on opening. Would anybody have considered taking this signal or would I have been savvy to have left it or on this occasion missed it by accident?

woohoo! I saw that short signal! Got in on that one. Happy with +15.70. First trade of the day. not bad. Only 1 lot. If i had 2 like ceydababy I could have run it for lots more, raising the stop.

 

[gorney]

woohoo! I saw that short signal! Got in on that one. Happy with +15.70. First trade of the day. not bad. Only 1 lot. If i had 2 like ceydababy I could have run it for lots more, raising the stop.

there was what turned out to be a nice long signal at 08:39 at 6438. A nice move up to 6480 is until it hit my pivot point and looks to be turning down. I didn't take the trade. After that big drop off I didn't have the experience or knowledge etc. to be suddenly taking a long position. I did turn nice but I didn't know it was going to do that. :d no crystal ball. It feels nicer to sit it out like the hunter with one arrow and await my moment!

Sorry if i am becoming irritating or annoying any people with my rambling posts.

 

[gorney]

there was what turned out to be a nice long signal at 08:39 at 6438. A nice move up to 6480 is until it hit my pivot point and looks to be turning down. I didn't take the trade. After that big drop off I didn't have the experience or knowledge etc. to be suddenly taking a long position. I did turn nice but I didn't know it was going to do that. :d no crystal ball. It feels nicer to sit it out like the hunter with one arrow and await my moment!

Sorry if i am becoming irritating or annoying any people with my rambling posts.

oh well, seems like that is it.

Two big moves this morning between 8-9am. Then thats it all morning. Very tight and ranging. Was like a big V with a little W bottom this morning.

Been sitting, hiding in the bush with my arrow waiting. Looks like its time to quit. Its past 11am already.

Good job I did not shoot lots of arrows today. Would have taken lots of losses and my nerves all shot to hell.

Hope everyone did well.

Thats it from me!

Over and out,
Scott

 

[cu2]

cu2,
I noticed the big fast moving candle bars too. But its too quick for me. I daren't jump in when it goes that quick because sometimes when the candle shoots up it comes back down just as quick on 1m bars before i've had chance to change my stop loss. But I think you have a good point there if you can do it quicker enough. regards,
Scott

You need to be able to see the differece between a spiking candle and one with one sided volume. I need to add that a sideways but slightly trending market would probably get you into the trouble you described above. A classic eg. was today.

Ceydabay got +37 before I started to trade. But looking at it I don'tthink it would of been easy for him to do today. So well done champ!

 

[cu2]

i was going a ask a quesion. There was the gap up this morning. I noticed that this sudden breakdown on at 07:56 with the short signal on the 1m and 2m chart almost closed the gap.

I was going to ask if anybody had any opinions about trading these gaps on opening. Would anybody have considered taking this signal or would I have been savvy to have left it or on this occasion missed it by accident?

I can only speek for myself, fading the GAP in the morning makes me the money.
Looking at the FTSE I would also say the same. Wait for the first signal and get in. But have your stops ready to move to flat or take profit otherwise you will get kicked in the butocks for it often.

 

[gorney]

You need to be able to see the differece between a spiking candle and one with one sided volume. I need to add that a sideways but slightly trending market would probably get you into the trouble you described above. A classic eg. was today.

Ceydabay got +37 before I started to trade. But looking at it I don'tthink it would of been easy for him to do today. So well done champ!

hi cu2,

yes, I see what you mean. I am beginning to notice the difference now. I've noticed from watching that in very slightly trending/drifting sideways move, there can be sudden spikes. So a wide red candle might be followed next minute by a wide green candle. Am I correct in this assumption? I want to try to understand correctly.

Also, I noticed that on a breakout there might be one or two wide candles starting the push up. Are these the heavy volume bars you speak of? Unfortunately the platform i use with capital spreads and ABN amro don't seem to have any volume indicators, which is really annoying because the volume level would be important to me. At the moment the platform i use is a sort of compromise. I could really do with something better with faster fills and easier system to use. But it will do for now.

I have some pc software that i can get intraday charting, but for some reason volume indicators don't seem to work on the FTSE100 index. Works fine for equities etc. How do you get to see volume for the FTSE??

Thats great for ceydababy! nice one. I would have done much better if i started using ceydababys profit/stop policy. I think i will try to demo it first. Let me get it straight:
2 lots. First Profit +10. 2nd lot raise to BE. Then run trade until exit signal, whatever one chooses for that. Ceydababy please correct me if i'm wrong. I know you posted it plenty of times and i have it written down. I'll go check my notes.

Lesson to remember - difference between spiking candle and one sided volume candle. Got it.

Thanks.
Scott