Champion Trader

ChartMan

Legendary member
5,580 46
Here's my take on this CT/CTA plan. Iv'e never seen it so I'm commenting blind. I think any system that relies purely on a moving average, or moving averages crossover will never perform well. Adequate at best, and better over a longer term. What is needed is extra TA signals or skills to indicate a top or bottom, to get you out with maybe another 10-20% extra profit. In a sideways market, the best you will do is break even. By all means use the system to get you into a trade, as moving averages can and do take you to the safer side of an entry, with a good probability of being in the money quickly. However, relying on MA's to get you out will certainly lose you a proportion of the profit. What proportion is questionable. If the price rises steeply and levels off, your win may be close to maximum. If it peaks and drops, your profits will be at a minimum, or even a loss.
Study carefully all you can about identifying tops and bottoms in whatever wave, shape or form suits you. This is your key to locking in more profits......
 

BrianT

Junior member
20 0
Chartman - I assume that you have tested many systems. For entries and mid-term trading CT is consistent and gets you in at the right time. :) From my ongoing research however the fact that the author has named it CT is incidental - it is based upon various other similar methods. You are spot on when you say exits and finding peaks and bottoms can't really by forecast with a strategy. I am sure we all hope to find one, but CT like others, is not it. Any suggestions on identifying the peaks and bottoms, reversals etc... would be appreciated.

Shinobi - I haven't been paper day-trading long enough yet to be exact but it seems to be working with short-term small profits. Again the formula needs tweaking. Will update as I can tell you more. Try 1 min charts with 100MA - this seems to work best. Another popular piece of advice is not to enter a trade when the market is within 20 points of the MA, short or long ;) .

A question for anybody - Given the lack of time (unless you are a full-time trader) how do you select the stocks/shares to trade? It would take me all night to chart the possibilities even with the online services.
 

orchard

Active member
163 2
Brian,
How do I chose what to trade. Yes I have done real trades using this system. I have just come out of Royal Sun Alliance, not because the trend reversed, but because I locked in profit by moving my stop upwards. Had I not done so, I would now be losing points quite heavily. Two other trades lost points, one on a stop and one on trend reverse, the other live one is MM02 which I am leaving, even though the trend has reversed, mainly out of curiosity (my current loss is £0.90 so I will wait and see.
I work only on end of day figures, which can be a big disadvantage I know, but I don't have any choice at the moment. I would not trade shares which show a large swing during the day, I would be stopped out more times than not. I use a standard stop of 20, in both paper a real trades (except where the value is small, then I use the abort figure). I cannot afford to trade indices, but, I must admit, I find shares quite facinating, and, at least, affordable.
Paper trading is fun, but not quite in the same league as real trading. In about six weeks I can go full time - and am looking forward to this immensely.
Give it a go - I trade small amounts - £1, £2 and £5. Peanuts I know, but it is real money. The time to increase is when I have a great deal more experience under my belt.
 

ChartMan

Legendary member
5,580 46
Brian, I haven't tested that many systems, but of those that I did, I came to the following conclusions. Others will violently disagree, but then that is their right....
1. No matter what I did, I couldn't find anything that seemed to work consistently .
2. I once developed a system that produced 100% wins, no losers on a basket of stocks over a 2/3 month period, some stocks gaining over 100%. It never returned anything like that either previously, or since.
3. I spent forever searching for the holy grail, and apart from 2. above, I never found it.So I gave up looking.
4. I got burned so many times on stocks that I gave up.
5. I decided that the way to beat the system was to devote myself to studying the DOW and nothing else.
6. I switched to ES Futures a few month's back because essentially the DOW follows ES. I still use DOW for TA analysis as there are distinct advantages, the primarry one is the resolution of the chart. One can more easily see TA formations coming on the DOW well before they are apparent on ES ( if at all sometimes).
To your second point about applying TA. Here's my take on that. Having spent a fortune on a "Manning" course a few years ago, I managed to take on board a couple of jems that I think are worth their weight in gold, although that was not apparent at the time. Somewhere, somewhen, you will all be given a gem, but, sadly, you won't appreciate it's worth until later on in your trading career.
This jem was that each stock has it's own characteristics. Discover that, and you can whip the market every time. The trouble is there are thousands of stocks to chose from so , basically, you are on a hiding to nothing.You will be a jack of all trades, using RSI 14 and whatever MACD etc. These are sensible, proven, broadly workable vaues. That's why every one uses them and they are in all the books. They deliver broadly acceptible results and this is the problem the average punter faces. This is true for MA's etc, whatever value you chose.....
So, after going through all that, and ending up going round in circles, I gave up and decided the only way forward was to dedicate myself to one stock. That was impractical, so I decided to study the DOW. To me, now, it appears( mostly) to be very predictable with the obvious benefits.
It's not every one's cup of tea. It's a lot of hard work, and sometimes downright boring. It almost makes me feel like a train spotter Anorak type, but there we are.
On the other hand, when you can call a top or a bottom to within a couple of points when you are 100 points away, you get a huge buzz and feeling of total satisfaction. :)
Being able to recognise tops and bottoms just requires reading all you can on TA. Sadly, all the books are "broadbased generalisms". You will see all of the formations some of the time on all of the stocks. Which formation is the most common on the stock you bought today? .... You'll never know.....unless you trade that stock all of the time.
You pays yer money and takes yer choice. I know of a few people on this BB that trade just a few stocks and are very successful at it using simple strategies. To be successful, you will all need to "find yourselves" and your own personal Holy Grail.
 

Mr. Charts

Legendary member
7,370 1,194
Interesting thoughts, Chartman.
Different approaches work at different times in different markets; the markets are not market-stall tee shirts - no one size fits all.
What does work is a combination of risk management, active management of a live trade, the actual effects of news flow, TA, bar pattern recognition, (which is virtually completely neglected by UK traders), and the icing on the cake, level 2.
Trading is not unlike car driving. You need a range of integrated skills, including reading the road ahead and it all seems so difficult when you start. Teaching yourself to drive is not likely to be a successful strategy; nor a safe one.
 

ChartMan

Legendary member
5,580 46
Words of wisdom indded about learning to drive. Same about Candlesticks. There are experts in this area, but I have found in studying ES, you only need to recognise a few to have an aditional advatage in your arsenal of tools.
 

options

Senior member
2,374 218
That was a good post earlier Chartman.
You only need one indice/share to make a living.

Most new traders start off by watching 10 or more stocks in a portfolio with the result being that they are watching one stock as another one 'pops' or they are concentrating on so many charts that they forget to trade.

and more importantly one must remember that most indicators are trend followers with the exception of the macd/cci etc which are both followers and predictive. But unless you jump the gun on the signals you will be entering a trade late. Over a few days this will not make a difference, intraday it does for short scalping moves. And this is mainly what I speak of.

Not sure the bar pattern recognition you speak of Mr Charts goes as un recognised as you think. Once you have followed a indice/share for a while and watched how it works, it is'nt rocket science to know when the next move up or down will take place.
Very handy for scalping.

I have all but given up on UK shares and only trade our future in the morning and the dow in the afternoons, but my new year resolution to myself will be to learn the L2 screen for the nasdaq stocks. It just seems a natural progression in the evolution of knowledge.

Good fortune.

Options.
 

moneyfool

Junior member
28 0
Chartman,

I've just found this site and am pleased to find something that appears to match our trading friends in the US.

After seeking many 'holy grails' over the past few years I now have the same belief as yourself. Get to know one trading vehicle and learn the patterns. I also like the DOW and have a question for you. When the Bond market closes at 3pm (8pm UK time) the DOW trend either reverses or increases as the moneyflow increases. Have you found a way to predict the direction of this change. Is there further data or a website out there that helps.

Thanks
 
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BrianT

Junior member
20 0
CT signal 12/12/02 FTSE100 Short @ 3916.00

Hit on 13/12/02

1 Day Close 37.9 points profit
1 Day Low 76.6 points profit
 

ChartMan

Legendary member
5,580 46
MoneyFlow- no I haven't, sorry......
 

orchard

Active member
163 2
Hi all
Re previous posts. I am now in week 9 of my paper trading analysis. I am only analysing shares, the FTSE 30 and FTSE 100 which are traded on D4F out of hours. I keep extensive records, and always post a stop/loss at 20 (or abort value if share is small value). I didn't find this in CT but decided it for myself based on my finances.
I have just entered my last weeks trading. One thing that is abundantly clear is that my 'current' trading is consistantly profitable, whereas my 'closed' trading is consistantly loss making.
I have therefore, decided that the entry point seems OK whereas waiting for trend reverse (I am using 9 days MA trend) is NOT GOOD. I am experimenting with a 5 day MA whilst still using 9 days on my paper trading - there is quite a difference - although have not yet gone through old trades. The current and recent closed trades show a definate improvement in both profits and decreased losses. Would be interested to know what other time scales have been used.
By the way, on paper, I enter trades at entry point, and closed at end of day prices - not ideal I know, but all I can do at present.
 

wanderer

Newbie
7 0
I bought CT a few weeks ago and paper trading on the Ftse100 and a handful of stocks, M&S,BT, etc I have managed 5 profitable trades and 2 losing trades showing a profit of 144 points so far.
I'm pretty much a novice as yet and tend to close the trade as soon as I see a profit.
 

orchard

Active member
163 2
Hi Wanderer
Sounds good to me.
I have found when trading for real, I have to make a real effort not to let greed take over - just one more move (groan). I am now making a great effort not to let it affect me, the reason why I move my stops when a trade is in profit - it usually works.
Keep going and enjoy.
 

Ben

Newbie
1 0
Can anyone tell me how to historically check the CT formula on the four main suggested indexes for the last ten to fifteen years in a way that one can see how much profit/loss there would be overall, annually and monthly, and then to be able to adjust the variables - the number of stoploss points, the number of days used for the SMA, etc - to see how this affects the profit situation? Thank you in advance. Ben
 

BrianT

Junior member
20 0
Ben

Use bigcharts.com and customise the chart to your preferences. You can the select 'java chart' to get specific prices daily or intraday i.e. looking over months or years you sometimes can't tell if the USL/DSL has been hit before the abort line, that is when the java chart comes in useful. Use the cross-hair over the chart.

Having said that - by the time you have analysed 15 years worth of figures you'll probably wish you'd started paper trading from day one. (When backtesting you can cheat - paper trading will give you a better feel for the real thing.)
 
 
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