Champion Trader

BrianT

Junior member
20 0
Shinobi

Does anything work when the market is not trending well?! I must agree with you on the moving stop loss theory - you need to have a lot of capital to cope with the odd 'down-turn'. (Avoid long heads and tails - or am I stating the obvious!)

You will understand my cautiousness in starting to trade with this method without a huge capital reserve. Looking into the possibility of spreadbetting with £'s and p's first.

Having said that if you have the nerve over the last 4 days [after identifying a CT signal on 21 Nov.] the charts are now starting to show a profit.

You use futures/ What is your opinion on spreadbetting with CT?
 

shinobi

Junior member
23 0
Brian,

Historically I've used SB as my trading vehicle. Recently opened a My Broker account for index options but haven't been brave enough to christen it in current market! I take your point about trusting signals as well - I've pulled out a few times when I should have left alone and let the trend develop!

My thoughts on CT formula are that it provides a solid starting point for developing a good personal trading system - this has got to be a lot safer than the "guess and bet" approach adopted by many newbies (myself included!). Compared with many seminars and systems I think the book is moderately priced (I've paid a lot more for less!).

As we know there is no Holy Grail, one size fits all, system! It takes loads of study, effort, and, most importantly, the ability to learn positively from mistakes, to succeed in this business.

The CT formula gets you looking at the market in the right way - don't fight the trend etc etc. But I still see it as a starting point on a journey, rather than the destination!
 

orchard

Active member
163 2
Hi all
I have been paper trading with CT for a while now. I intend to continue for 10 weeks and then analyse the results. What I would like to find is some reason why the good trades win and the bad trades lose, particulary the ones that looked good at the beginning. I am up to week 6 and my closed trades are not good. My current trades are doing quite well, but then, the market is rising. I am trading FTSE shares, not indices.
I find the CT system easy to understand and operate, and, to be honest, it has taught me a fair bit about how shares and indices operate. I consider the price to be well spent.
I do not expect it to be perfect, and once I have the 10 weeks under my belt, I intend to play about with the timing etc. At the moment I am finding the trend reverse comes too late to make a reasonable profit. I also intend to add trend indicators, nothing fancy, just a general trend as shown on sharescope.
I am quite determined to have a real go at this, in the near future I can try it full time which I feel will be a big advantage - end of day always seems to miss the 'important' bits!!!.
Am happy to share any info with anyone, and if anyone has any advice or info to give me, would be happy to receive.
 

BrianT

Junior member
20 0
Orchard

You seem to be in the same position to me. Working hard to make the CT formula work because of it's obvious advantages, but it clearly needs tweaking a bit. Particularly the AS rule.

I have recently tried backlisting 20 CT opportunities on the FTSE100 in the previous 3 months. 14 out of 20 opp's produced a good profit and out of the other 6 only one made a loss when waiting for the market to reverse. The wins needed to be taken early though - over a matter of 1-2 days, never more than 3. Why wait for the market to reverse to an AL when you're clearly going to make a loss?
 

shinobi

Junior member
23 0
Seems like we're all thinking the same way. Good basic formula but needs work on exits and stops etc. Do you want to keep this board going with actual trades using system (either paper or real cash)? Would be useful group input - particularly on areas mentioned above - reasoning etc?

I'm keen if you guys are - anyone else using CT formula welcome to join in.

Shinobi.

P.S. Are any of you using Vol 2, Champion Trader Active? I am and feel it was worth extra investment.
 

BrianT

Junior member
20 0
Shinobi

Great idea - It would be a good to compare how we are doing using variations on the same strategy. At the minute I'm only using Vol. 1 of CT but I will consider buying the second book once I'm convinced of the methods. I am going to try out using more indicators particularly on stops. I feel that for entry the formula has just about proven itself but we all know it is easy to enter a trade, it's during and getting out which is more important to understand.

I will update you on how things go and would appreciate any input. I don't believe in not divulging useful info., anyway most other traders have their own tried and tested methods.
 

orchard

Active member
163 2
What a useful board. On my paper trading system I am using a standard 20 points stop on all trades except small value shares where I use the abort value. I feel that to get anything out of this I need basic criteria. I do not expect to find a definite result when I finally analyse the data, but I do expect to find pointers which, I hope, will give a small advantage. I have already noted some things, like reverse trends coming too late, and enormous variations in daily prices adversly affect the profitablilty of a trade.
Reading this board, I am happy to find I don't appear to have wasted my cash, I must admit that the book explains things about shares and indices which I have found useful and so basic that the 'experts' think we should have already known. Lets all keep sharing our experiences. Maybe we can beat the SB companies yet!!!!
Orchard.
 

shinobi

Junior member
23 0
Orchard,

Just re-read one of your earlier posts about being at week six of your testing period. This is probably the worst six week period to choose to test any system - let alone a trend following system like the CT formula. See my comments about current whipsaws/choppyness!

You know the old adage about flipping a coin? If you flip it enough times you will probably come up with ten heads (or tails) in a row? Same with trading - ie. ten losses in a row! Doesn't mean your system is rubbish - just a law of average thing.

I would suggest you back test the formula against those periods were market trending strongly, and see what sort of results you get then. Lesson for me over recent weeks is to avoid trading when market going sideways. Look for breakout from current range and beprepared to jump on board again.

Two "ifs" - if there is a pre-Xmas rally and if the FTSE manages to crack 4200 there may be good opportunity for profit before Xmas. But, as always, trade what you see not what you think.
 

orchard

Active member
163 2
Thanks for the advice shenobi. Yes I do realise that the last few weeks have been 'choppy' (you are the master of understatement!). but I intend to do a minimum of 10 weeks. I am not looking for certainties (I have learnt the one certain thing about the market is its UNcertainty), but pointers. I know it's not always going to be right (another understatement!) but to try and gain the best advantage I can - I am also quite prepared for losses (in fact already had some of those!!!).
Still I do find it exciting - even the dull bits like printing charts and making notes and analysing results (actually I love it).
Without the advice on these boards it would be much harder.
Regards all.
 

BrianT

Junior member
20 0
Orchard

I've backlisted as Shinobi advises and I can advocate the basic CT formula, but not entirely. You are right to add your own stop - it is the main flaw in the formula. I second the view on recent weeks - it is an awful time to try and prove or disprove a formula. Don't use take your results too seriously , it is just a case of bad timing. I would say the lesson to be learned from the last few weeks is that thre will not always be an abundance of trading opportunities - particularly if you are trading the indcies. look elswhere and explore the possibility of different instruments. By the same token don't give yourself to much to keep up with.

Looking forward to the rally!

Brian
 

shinobi

Junior member
23 0
Using CT I've got a buy signal on Dax at 3386 (technically a day late on this). So lets see what happens!

edit - £1pp Dec Dax @ 3395, sl @ -200 (40 day sma).

edit - got out of this @ -30 when things looked like tanking badly.
 
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FloorTrader

Junior member
26 0
CT backtesting

The 'CT formula' (although it is simply a rehash of a very old strategy - see http://www.hardrightedge.com/wizard/tl2.htm for an example of the groundwaork it is based on, the so-called 'Holy Grail Indicator!!!!!) has been extensively backtested, on FTSE and SP500.

It works well in strongly trending markets, but will whipsaw you to death in a sideways chop.

The appeal of it is its simplicity - we would all like to think there is a easy way to make money on the markets (sorry, there isnt).

HOWEVER, if you must play with it, be aware of the following:-

(1) it works best in a strongly trending market (as does 'buying' or 'selling', two 'strategies' that are even simpler!!!)

(2) statistically you need to be out by day 3, and the difference in gains between day 2 and day 3 is (on average) too small to make the capital risk acceptable.

(3) the Stop strategy is diabolical, and means you generally have a NEGATIVE risk reward ratio (i.e. you risk an average of 300 points to make 100). A better place for the stop is just under the low of the signal bar. If it breaks this its probably going bad (or the high if the signal is a short).

(4) The strategy as it is written, if followed exactly will get you into real trouble, real quick in anything except a steep trend. You should instead look for a trend in place on each and every one of the 4 days of the signal. (ie DOWN-UP-UP-UP is no good).

(5) When you have 3 bars in place, and a possible signal the next day, watch it from the open on day 4. If it breaks above the high, launch the trade, as statistically the close will be higher still, and according to the book, you already have your signal. (and statistically, you might make 45% of the total average points up to todays high). (obviously for a short, reverse that).

Alternatively, you could learn to trade.
Hope this is of help,
FT
 

Scientist

Newbie
8 0
CT and its followers...

Folks, Folks, Folks...
Well, for a start, Floor Trader really speaks my language, I agree in every point!
-Yes, I purchased the CT manual - plus the CTA - And, NO, they weren't necessarily such a waste of money, as in the author explains a lot of things about markets as well as crucial trading principles very well and hammers them into your brain - stop losses, discipline, making a plan and sticking to it, knowing what you're doing and PARTICULARLY to get rich sloooowly... Also it gets you that initial enthusiasm to start looking into trading...

Good for a total beginner, for its philosophies, but you wasted your money for the formula... Honestly... I've tried it... Even CTA on various indexes (S&P500, 100, FTSE100 etc) and blue chip stocks. Done it all in Excel with the accompanying CT software (the next thing they'll try to hock you!) - It's a mad formula to me, because the risk is too high. I mean, real actual trading is much more profitable and - believe it - much less risky! ...

It's far too risky to me - And I'm saying this as a seasoned trader... Trust me... Besides, it's hell boring...

Why don't you guys just join the fun of real trading?

I give you some tips how to do so - It's really not that hard if you study a bit - And it's much more fun than CT!!!
Get yourselves some good books:

-For starters, there's a much better and cheaper course that you can download as a pdf immediately": truetrend.com!

-Also, there are some MUST read books that you can't go past having read twice before you even start doing the things you're doing right now:
-"How I made $2,000,000 In The Stock Market" by Nicholas Darvas (amazon.com) -great book about the concept of stop-loss!
-"Market Wizards" and "New Market Wizards" by Jack Schwager
- A beginners guide to day trading online" by Toni Turner - good book... real page-turner! You'll see!

Anyway... Here we go! Please read my recent posts for more insights into this business!...

Yours Sincerely,
~The Scientist
 

generalford

Newbie
3 0
Hi all,
I too am a CT & CTA reader and its good to hear about others out there that are using it, this being the first formula I've come across being a beginer and I have to say that I agree with Shinobi, Orchard & Brain. I have found the formula very intersting and informative although i have changed my stop loss to 25 pts.
I've only been trading for about 4 weeks and like you all said it seems I've started at the wrong time! Not many signals from the FTSE but the only one i have traded on I profited 90 pts.
Without the formula I would have been down a lot by now as the first day my account was opened I got all too excited and tried trading without the formaula trying to guess my way and lost a few £00's! I wont do that again.
Has anyone tried the software that they are selling?

generalford
 

shinobi

Junior member
23 0
Scientist & Floor Trader,

Good input guys but I think we sort of recognise what you say already. Maybe the CT formula isn't the Holy Grail ('cause it doesn't exist) but it could represent a reasonably sound starting point for at least "learning to trade properly".

I suspect you are both experienced traders, probably with many years between you - we're not, so we have to start somewhere! If our comments are somewhat naive from your perpective then that's OK - but we have a journey to make to get to where you are now.

I for one will follow your suggested reading - links etc to see if they can help me on this steep learning curve. But I still think this little part of my journey is valid - even if its only a stepping stone to other strategies.
 
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