Beat The Broker Compo!

Failing that. The only course of action left to you is to follow these steps.

1. unplug computer.
2. go to window and open.
3. Check there are no pedestrians near.
(Traffic wardens are exempt from no 3.)
4. Walk back to computer, pick up and hurl through open window.

Bonus points awarded for braining traffic wardens.

Problem solved. :cheesy:
The Comp' Strategy

I'm trying to apply what I think I learnt from the comp' to real live trading. I have a particular problem which cost me £60k and 2nd place in the comp' last Friday but, more importantly, wiped out the profits on Monday and then again yesterday. When it works, it works well (like any strategy I guess) but, when it doesn't, it's like stepping in front of a freight train. If I explain the rationale behind what I'm doing, I hope you guys 'n' gels can offer suggestions as to how I can either spot the freight train coming in advance and stand well clear or jump on board.

Attached is a 5 min' chart of $INDU from yesterday. The central golden line is the 'fence' - a 5 period weighted moving average (5WMA). The purple, blue and pink lines that that run parallel above and below the fence are calculated by a multiple of ATR from the fence. They are not unlike - but not the same as - Bollinger Bands. The idea is that price never deviates for very long before 'returning' to the fence. The circled areas mark the point where price touches or exceedes the purple line (a multiple of 0.7 x ATR) and is where I'd enter (long when below the fence and short when above it). In the comp' I entered half my position here with the stop at the pink line (a multiple of 2.2 x ATR). If price extended further out and hit the blue line (a multiple of 1.7 x ATR), I'd enter the other half there with the 2nd stop beyond the pink line (a multiple of 2.7 x ATR - not shown on the chart). As can be seen, these are often reversal points but, even when they're not, there's usually the opportunity to close out with a scratch trade if the prevailing trend continues. Basically, the technique worked fine all day until the 15 minutes of madness at 15.00 when price rocketed 200 points and all stops were blown out of the water - along with any profits from earlier in the day. (Highlighted with a 'no entry' circle.) Obviously, this is an age old problem for traders who go top and bottom picking, but it's one that I'm yet to find a solution to. Any pointers would be very welcome.


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The only thing I can suggest here - although I've not tested it - is to look for a break of the swing/high los - and if this happens sit out the next movement.

The previous swing high of 8430-ish was broken just before 15:00.

Might be worth looking at - although I don't know if it will mean you miss out profitable trades in other circumstances.
I personally would drop the weighted average and go with a simple purely for the fact a simple average gives the correct "composite" effect you should be looking for. Also I would suggest an ma envelope for your trading bands rather than use lots of individual shifted averages, much easier to manage and adjust to volatility on the fly as time progresses or different instruments being charted eg the switch between ftse/dow. Then add a over bought/sold indicator and tune that to go over bought/sold while price is still rising/falling.

Does that help Tim?
I'm not the person to help here but I am intrigued.

1) why those multiples? just refinement?
2) If you are using them as reversals, you would have gone long at approx 8425? i.e at 10.45ish when the red bar touched the purple line
3) If so, you wouldn't have taken the next bar (just after 11) because it didn't fit with the 'other half' strategy?
4) where do you exit? stops would never have hit but where are the limits?
5) spot the freight train coming - 15:00 figures (I think the Fed plan was out well before that)
6) how many trades do you taken on average using this method?

Yes, this is worth looking at, although it's gonna be tough to draw firm, tradeable conclusions for two reasons:
1. Because this is essentially a reversal strategy, the point at which price hits or breaches the bands is likely to be the next swing high / low - as can be seen from the chart.
2. The previous swing high that you picked out is where I entered at 8421. I had a confluence of price approaching the purple band and what, at the time, I imagined was a double top. (how wrong I was!) Even when price continued to rise, I wasn't concerned as I could enter the other half of the trade in the vicinity of the dark blue band at 8450 in the expectation of a pullback to test the breakout. At that point I'd have to decide to get out at b/e or there abouts or, have a profitable trade, if price sailed back down to test the 8300 lows. Unusually, the pull back never came.

The genesis of the idea comes from 30XTCi - in this thread in which he explains the use of the 5WMA (what I refer to as the 'fence'):
The bands are self adjusting according to the volatility of the instrument being traded. This is absolutely critical for position sizing purposes. They pretty much tell me everything I need to know: where to enter, position size and stops. I suspect I'm not understanding your points fully as I'm afraid I don't see how - or why - I'd be any further forward than I already am? It's really only the freight train issue that concerns me; in all other respects I'm very happy with the way the strategy works.

1) Yes, after an endless amount of playing around I find these are my default settings and work pretty well on most instruments. That said, it is timeframe critical, I'll come on to that later.
2) I didn't take this trade, although I could have done. It's a good example of how normally - normally - one can get out at b/e even if it doesn't work out. Notice how the bulls come in on the subsequent two green candles. Not much buying pressure, but the freight train of the downward trend slowed sufficiently to get on and off without doing any real damage.
3) No, this isn't the 2nd half of the previous trade. We're starting over here, not least because price has returned to the 5WMA. I'll come on to the significance of this in a mo'.
4) This is a slightly embarrassing question that I hoped wouldn't get asked! :eek:
In other words, there's a tad more work to be done on refining this. That said, there are some rules in place:
- take half profits when price hits the fence (5WMA) and raise stop to b/e on the other half. This is to protect against the possibility that the traded move is nothing more than a brief pullback and that the prevailing trend will continue.
- if price crosses and closes above the fence, then a reversal is deemed to have taken place. Close the remaining half on the breach of the low / high of the previous candle and/or if price closes the 'wrong' side of the fence.
- If price hits the purple band on the other side of the fence, then stop and reverse.
5) Good point, I do check for news and economic announcements etc. and don't take signals around those times. I wasn't aware of anything coming out at 15.00 - or just before.
6) Typically about a dozen, although it varies according to market volatility. When I traded stocks, I tended to overtrade. To combat this, I traded SPY (via direct access) and the DOW daily Cash with EXT as I don't have a futures feed from eSignal. (SPY, QQQQ and DIA are more than adequate proxies, I find.) If the market is very flat, I scalp a one minute chart. But I'm wary of this because there are quite a lot of freight trains in this timeframe! On this note, it's worth noting that had I traded a 15 min' chart instead of a 5 min' one, yesterday's 'freight train' move would have produced the only trade of the day and it would have yielded a profit, if taken when price 'returned' to the fence.

I hope that answers everyone's questions. Thanks for your interest, help and input guys - much appreciated.
just noticed the brokers online and was wondering if he could share with us some words of wisdom gained from his thirty years of experience, for us new players to the game :D cheers!
You should have received an e-mail from ETX on the 25th of Nov, informing you of the winner - someone called Alan Hayward. We assume he's not a member of the forum or, if he is, he's keeping quiet about it.
i was hoping Alan would have failed on one of the conditions and they would be looking for someone else:devilish::eek: well were gonna have to resort to plan B of getting 20k out of etx ......... kidnap their best broker :p
(n) Not impressed Mic, straight off next years christmas card list :p, just rung up one of your collegues so i could put plan C into action, give you some of my hard earned money, to win alot more back from you :cheesy: and she refused to take it :confused: claiming i dont have enough savings :cry: i ask this,how am i meant to get enough if A. i didn't win the comp and B. you dont let me win it from your company? :p i guess its back to plan B (y):LOL::p
just rung up one of your collegues so i could put plan C into action, give you some of my hard earned money, to win alot more back from you :cheesy: and she refused to take it :confused: claiming i dont have enough savings

hmm, and yet fannish89 has no savings, credit card debt, and claiming benefits and he gets an ETX account no probs! :LOL:
Easy - if your confident about making the money.


Or reapply in a few weeks.
hmm, and yet fannish89 has no savings, credit card debt, and claiming benefits and he gets an ETX account no probs! :LOL:

I suspect fannish filled in the form like his normal honest self :LOL:

He claims to be scamming hot water at the moment!
Cheers tim.

I don't check my emails - at all :).

I don't deal with most of my PMs on this site, I have 16 to go through at the moment, some of them months old...

As for answerphone messages... never check the ****er.

If someone wants to get in touch with you enough they'll try really hard :D
Scamming hotwater???
Spanish said:
Since all i did today was get up after 10am, have a hot bubble bath when i have scamned my landlord/water comany/nextdoor neighbour so i dont even pay teh water bill!! hehe

(the landlord and enxtdoor neighbour share my bill)

I then drunk some more rose chmpagne while dancing aorund my flat thinking about school n college..

then ate a kebab, called up teh maid service to get my maid to come clean tommorow again, and then just sat down at my laptop for 2hours 1 n half hours while watcing tv,
and earnt £694 for doing that.....

Rose champagne ffs! I haven't had that since last Thursday!