Dax Cycles

[jayjay121]

hi dinos,
My name is jason and im 27 years old and from london. Ive been trading and learning to do it since i was 21. I started with deal4free spreadbet and lost all my account within my first year. Since then i have learnt alot about trading and myself. I now use tradestation and ninja trader and mainly scalp for 2 ticks using 2-4 contracts. I have my own programmed indicator which i use and have specific rules for my system. I basically scalp for 2 ticks once my indicator reaches wild extreme overbought/oversold conditions. I dont just rely on my indicator though, also before i enter a trade i look at my dom and use the volume i see on it to refine my entry. I also stay in on trends once they have developed. I normally cut losses really quick within 4 ticks so they dont get out of control and let trend trades just run adjusting my trailing stop along the way. I trade the er2 and have just started the dax which im enjoying, infact i prefer it to the russell and think i will now stick with the dax full time. I have 2 young children and would love to devote more time to them and your trading system you mentioned has got me thinking. I at the moment make on average £100 a day and infact this is my net daily goal, I only personally need £500 a week to live my lifestyle and im happy with this and never get greedy as i trade for independance, not just for money.
Now do you think your system and style could suit me? Could i make similar returns?, like i said im disipilned and do not get greedy. Could i make similar returns trading less time do you think in your experience? and lastly would you ever consider teaching your style to me?

kind regards and thanks for your posts,


jason


ps: if you send me your email ill show you some charts and the way i trade currently

 

[Dinos]

Hi Jason,

First I would like to start by congratulating you on you honesty, and success, over my past twelve years trading, you do not often read anybody admitting such failure, more usually the opposite ( people blowing their own trumpet).

The trading style and method you have adopted clearly works for you, think carefully before you change what works, (ifs its not broken don't mend it).

You asked "do you think your system would work for me" and "could I make similiar returns"?. Probably, but only you can make that decision. I looked into your questions last night and and matched your requirements to my methods, the result is posted later.

As far as teaching goes. in a nutshell no, (no offence), however, I am happy to point you in the right direction to get the answers to your questions and to discuss your thoughts with you to help make the decision whether a change in methodogy can help achieve the lifestyle change you indicate.

I don't day trade, I trade short term (target 5 days), I work to a specific points gain which I identified in my number crunching, use no stop loss and allow the market momentum to fluctuate until the target is acheived. Not using a stop loss probably goes against th principles of most if not every trader, this is key point, I struggled with this at first and no doubt you would as say you currently close within 4 ticks.

You will need to look at end of week data, showing H/L, O/C identify a common sustainable price movement (+/-) with the extremes of the range, for arguments sake 25 points (not saying 25 points is what I do or recommend doing), and trade accordingly eg: Market order and set opposing (limit) order at 25pts at £20 pp, this would give you your £500 a week.

As an example using the data feed I use, at random between the period 12th June 2006 - 27th November 2006 (26 weeks) if you had taken a long position, you would have achieved you 25pts target 21 times within the 5 day timeframe, on 3 trades you would have to wait another week, and on the remaining 2 you would have to wait 2 weeks after placing your trade, overall a 100% success rate.

If you had taken a short position, 19 times within 5 days, 6 times within the next week and once have to wait 3 weeks, overall, 100%.

However, by not using a stop loss, you have to have the belief in the system you employ, on the week beginning 7th August had you taken a long position the previous friday night, the range of that week was (H-14 - L165), very clearly the position went -165 against you at some point and you need to ask yourself how you would handle that and would you have sufficient margin to carry it.

However, by the end of the following week, the week showed (H221 - L+31), you would have made you money.

Overall, it would not have mattered which way you traded, and quite simply, you would have won every trade, however, by adopting a TA approach you should have a a fairly robust formula for deciding which way the market is heading

I built my trading methodology style around these principles, and it has provided me with a stressfree and unemotional style of trading and plenty of free time, if you really want want to go down this road, I cannot stress enough, you must do you homework, number crunch and most important run a test dummy with you results, if in doubt, do it again, only when you feel confident may you be in a position to try it. In my experience, I have found it doesn't work with every indices, but I find the DAX very tradeable. IMHO.

I hope this answers your question, it was a very brief and simple overview, please do extensive homework and keep up your good trading.

If you want to ask any questions, please feel free to leave a messsage here, however, don't be put off if I delay in responding, as I first mentioned, I do not screen watch and only visit the site every now and again as I have better things to do with my time. Good Luck.

 

[MONAD]

Quite unique strategy, Dinos, with 100% strike rate both ways.

Does this mean that the trade is taken either at the day end on Friday or Monday Morning and left open i.e without stop loss to hit a target.

How do you determine whether to go long or short. Do you employ say a moving average or a channel on the Daily or weekly charts.(presume you do not use intraday 60min or 120/240min )

 

[karmit]

JayJay, I spent a long time in France, still have a place in Grimaud, its a gorgeous area, split my time now between there and England. For what its worth, I use CMC and Stockcharts.

Monad. I don't use stop losses, I range trade, target is 5 days to achieve the target, but I will hold a position open simply because I only enter a trade when my strict conditions are met, it works for me,(82% success within 5 days), longest wait 3 weeks, overall, 100%, but it may not be suitable for everyone. I only aim to trade 4 or 5 trades a month, not interested in day trading, I don't like the thought of watching the screen all day when I can be doing more constructive things with my time method has worked well for me for the last 6 years.

Quite happy to discuss my method if you wish.

Regards

would appreciate if you could tell a bit more about your trading system...

sounds quite interesting, to say the least!

 

[Hook Shot]

Amazing what you can do with Yahoo Data...
Well done Dinos.... so simple too

 

[jayjay121]

hi dinos,

Im gonna run a test for your system using my ninja simulator, Im gonna run it for 6 weeks and ill let you know how i get on. Anyway i need to know the following, could you please help.

1. How long you been trading this way?
2. Do I use a spreadbetting company like CMC deal4free or my broker, who do you use?
3. Would it work better using tradestation and live data or not nessasary?
4. What charts do you use for your end of week data?
5. ohlc are these the only lines you draw on your charts?
6. Have you ever reached a point where you had to close a position you feared it would not come back?
7.How much margin or funds would i need to trade this system successfully in you opinion considering max drawdowns?
8. How do you enter your trades, do you have a specific rule when they cross a S & R line?


Many thanks dinos, hope you can find the time to answer the above points,


jason

 

[jiggly]

Hi dinos

Sounds like you have done similar research and statistical analysis on the dax market as I have done for FX.

I found that the results in the short term to such trading styles are very enticing to say the least, I also realised that you need to have very deep pockets to trade like this or a broker that offer fractional trading lot sizes. It all comes down to patience and managing risk in this particular situation and not so much about direction anticipation.

lets say for example we are trading the euro, and its at 1.3000, if I go long and prove to be wrong, by minimising my risk through accounting for the worst case scenario, which is that it becomes worthless, i.e 0.0000, I can calculate my lot size and trade with no stop lose. if the market drops I can leave the trade open and wait (hopefully for a reversal however long it takes) and take my profit, essentially 100% correct system, as something completely catastrophic must happen for the euro to be worthless....but my point is that it may not bounce back and your sitting on all this cash that you cant do anything with unless you want to take the loss. we keep repeating the process until you have no more sustainable margin or broke.. and obviously some trades will work out.

I thought that I would just add that it will only take one wrong trade to take the shirt off your back, you will not know when that will come but it will happen and when it does you will be cleaned out.

I am not telling you this to be-little your work or trumple on your parade, all that you are doing and the opinion I am posting is for your benefit.....to ponder over at the very least

just think about it..you cannot eliminate all the risk from your trading, others have tried won nobel prizes and then failed later down the line,

this style of trading is actually a wolf in sheeps clothing....but its your money and your choice..if its working greatt but I suspect it will not work over the long term, due to margin and account balances being depleted, you will either have to liquidate these positions going against your methodology or sit on the lot until you get a bounce back....either way your return on investment will prove shockingly poor.

all the best

 

[jiggly]

There is only one way to build a robust trading system/methodology in my opinion and that is to identify when your instrument is in high demand or limited supply then buy it, or in high supply or no/limited demand and sell it.

simple.

 

[Dinos]

Jason, with all due respect, I don't remember giving you a system to try, I mearly identified part of my trading style. I have read my original post to you again, perhaps its implies I randomly choose a long or short position, unfortunately, trading is not that simple.

For what its worth, I am at heart at technical analyst, my charts range from 1 year to 1 day to identify and confirm trend (bull/bear), the first point in my analyse to provide direction to the way trade. I look for and trade positive and negative divergences (RSI, MACD, Trix, Stochastics) etc. . I never trade against the trend.

When my entry conditions are met I enter the trade, as Monad asked " Does this mean that the trade is taken either at the day end on Friday or Monday Morning and left open i.e without stop loss to hit a target", quit simply no, when the entry conditions are met, I will take the position no matter which day or what time. I simply use weekly data to help in analysing the previous close, open, high, low and close to monitor the price movements (+/-).

Jiggly, thanks for your comments and Jason, you should take on board these comments as my style of trading would not suit everybody and is inherently risky should you not have sufficiently large funds to carry positions that go against you.

As I mentioned I only trade 4 or 5 times a month, I don't need to trade and I will not trade if I have the slighest doubt, (cash is king), I have traded this way very sucessfully for 7 years and it has provided me an extremely comfortable stressfree lifestyle.

Due to the inherrent risk of not not using a stop loss, you need to have a substantial pot and trade in realistic £pp, my trading stategy has contingencies to afford me to trade with piece.
of mind protection.

Jason in answer to your questions

1. 7 years
2. Multiple corporate accounts CMC, IG
3. Don't know, develop your system andtry it out.
4. Yahoo, its free, there are plenty of others though
5. See above
6. In the begining Yes, I reviewed and adapted my plan accordingly and no
7. As much as you can afford, start small, re-invest all your profit into capital accumalation to build you
£pp, whilst you continue with your current system.
8. As above, ideally after extremes, divergences and on impulse or correction.

Hope that helps, never spent this much time on a BB for many a year!!, good luck

 

[Hook Shot]

Okay....Dinos... I hear what you say ........and full respect to you .... but would you mind telling me/us whether you have any Dax positions right now ..... and when & why you entered the trade and lastly what's your min. price target vis a vis CashDax.

I'm not seeking a "trading system" ................... the markets are relatively straightforward ............. they go up/down/sideways. When they get stretched they revert to mean ........

Maybe, the challenge is for "traders" to know what to look for and have the discipline/patience... to act accordingly.

You seem pretty successful and certainly have a decent methodology .....i'm just curious as to how you do what you need to do when you need to do it...... perhaps others might find benefit in your response...

I'm a Fan.

Regards

Hook Shot

 

[Hook Shot]

Dax closed the week around 6885 and whether you went long or short for the example target of "+/-25 Pts"
you would have achieved the objective within a week.

Dax hit the bullish target 6910 by wednesday... and the bearish target yesterday (thurs)... but came within a whisker early in the week.

The theory that the Dax might touch +25/-25 within the next 7-21d of the Friday close seems reasonable to me....... having read Dinos's description .......... Moreover, to see it demonstrated for myself ...ONCE is quite enough.

Public Apology to Dinos as my previous post was a bit abrupt and needlessly so.......

Regard
Hook Shot

 

[Dinos]

Hook shot, no need to apologise, as a trader you will already know what to look for and you must have your own trading style, as you say the markets are quite straightforward etc. As per last reply, I must point out, that at no time have I suggested anybody should use +25/-25 trading style, I merely used that figure to demonstrate to JayJay, but interestingly it achieved that figure, more importantly, you need to see how far the market would have moved against you before hittting those figures!, would you margins have sustained it?

I trade heavily leveraged and need little point movement to achieve my goal, and would suggest anybody going along my style of trading to do your homework.

In answer to your question regarding my current positions, I have traded in the last week when my indicators suggested I could achieve my target. I will not post what position(s) I took or intend taking, that is for individual traders to make their own judgement.

If you try it, let me know how you get on. Good Luck.

FWIW, I think good trading conditions ahead for this week.

Dinos

 

[Hook Shot]

Cheers Dinos
--------------------------------
Okay... I know the +25/-25 was an example but it seems to have worked again....

Dax closed last week at 6957 and within 3d had had hit both +25 target and -25 target.

Shorts would have had to wear a "running loss" of 48pts before getting their 25pt target today. (3rd day)
Longs would have struck gold on day one - Monday with no "running losses"

The odds to me favoured longs as the better bet coming into this week

 

[Dinos]

Hi Hookshot.

Interesting it hit +25-25 again, the more you study these movements, there appears plenty of regular point options you could aim for on a regular basis, the key to success I think we would agree is working with your indicators to identify the direction and get your return asap.

I do have time on my hands, I will look into this area and let you know what I find and perhaps we can discuss it then.

Good Luck and happy trading.

Dinos

 

[Hook Shot]

Hi Hookshot.

Interesting it hit +25-25 again, the more you study these movements, there appears plenty of regular point options you could aim for on a regular basis, the key to success I think we would agree is working with your indicators to identify the direction and get your return asap.

I do have time on my hands, I will look into this area and let you know what I find and perhaps we can discuss it then.

Good Luck and happy trading.

Dinos

Look forward to it Dinos
And thanks
....Certainly agreee with your keys2success comment
Regards

 

[lwclasses]

Hey Dinos, just wondering if this is still working well for you? Not sure if you will even see this, but I was looking for something similar to this, and just wondering if it still rolls well?

TIA if you see this : )

 

[slight]

dax short end of day since 6058 triggered on 08/19 .. currently +142 .. anyone?