Dow/FTSE Trades

FTSE Beater

Experienced member
hmmm

Chinese numbers - I think not!!

Well peeps I think I've figured it out - not Rocket Science and because your members of T2W I'll give you the answer

It's Pivot Points breaks of R1 and S1, with some cleaver Money Management (which is the secret to it).

There you go, I'm sure thats what it is. - Working on the example they gave in December.

I would love to backtest it, but don't have the data - so for those who do, might be worth a look. :)
 
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Trader333

Moderator
Hi FB,

I see your point but I am not aware that pivot points breaks of R1 and S1 give a 90% success rate. In fact I know from trying to trade this way that it is at best 50%. You may well be right though as it cannot be something that is that complicated.


Paul
 

FTSE Beater

Experienced member
Good point CM, can't be to complicated to work out, and must have to do with the OHLC data as that's whats shown on there website. :)
 

Bigbusiness

Experienced member
I think they mean that if the entry point is hit, the index will move 10 points in the right direction 90% of the time at some point in the day. But they are not kean to mention it could move 60 points in the wrong direction first.

Using a spread bet company I can't see how this strategy will work. 10 points can be lost in the spread and bias.

If the initial stop is hit, you are 20 points down and they say to re-enter when the entry point is hit again.

There might be a 90% chance of making 10 points but it might cost 60 points to make it.

The main point is, if it did work, why would they be selling it?
 

Bigbusiness

Experienced member
In 2000 I went on a free trading seminar. The man called himself PJ and claimed to have a system that worked 88% of the time. It was based on Chinese candlesticks. He was very impressive but I decided not to go on the full day course. It cost £500 and I thought he was making more money teaching than trading. If you look at this page from the Motley Fool you will see that some people who went on the course were impressed but there were problems implementing his strategy and there are no posts from people using it successfully.

http://boards.fool.co.uk/Message.asp?mid=6697123&sort=whole

His website doesn't seem to be working:-

http://www.pjtraining.com/

Just to show how something that looks too good to be true usually is.
 

Trader333

Moderator
Hi Big Business,

If you believe the statements made on the website then you cannot lose 60 points before making the 10 points because they state that a stoploss is set at 20 points. So you would be out of the trade losing 20 points but only 10% of the time. The way I understand it is that if the entry price is hit then there is a 90% chance that you will make 10 points before the market reverses by 20 points from your entry price. But maybe I have missed something and in any case I am very sceptical of any claims like this although the 30 day free trial is unusual for a system if it doesnt work. I would still like to hear from someone who has given this a go.



Paul
 

bally35

Junior member
:) hmmm...i suppose one cant go wrong with there free trial
to give it a fair try.... if there is, any one out there who is using there services please let us know... :)
 

Bigbusiness

Experienced member
You can loose 6o points because they say you should re-enter after being stopped out if the trend resumes. Do this 3 times and get stopped out and you loose 60 points.

Using a spread bet company this might happen quite often.

If this did work 90% of the time there would be little point in re-entering a trade. It would be better to take a loss and wait for the next day.
 
chinese numbers

Yep. That's the one. I get a daily news bulletin from ADFN.COM
( which is very good) and it was advertised there. If you know anything about it I'd like to hear!
:D many thanks
 
I too was intrigued by what these ''Chinese Figures" could be. So I did a little back testing using the OHLC figures and the Buy and Sell points they give on the site.

I looked at 8 months of Ftse data (Jan-Feb 03, Jan-Mar 02, Jan - Feb 00, Jan 98) and four Dow months (Jan- Feb 98, Jan- Feb 03). Got bored after that....

Anyway I compared their numbers with Pivot Points as hinted at by Paul (Trader333). It turns out that their Buy Trigger is always 1, 2 or 3 points higher than R1 and their Sell trigger is always 15, 16 or 17 points above S1. Strangely this was true for both Ftse (prices in sample ranged from 3,500 to 6,900) and Dow (prices from 7,600 to 8,800).

I couldn't work out any rationale for when they added which of the three corrections. But it would appear that the precise trigger point isn't that crucial anyway. They advise on their How we Trade page that if you can't watch the screen"To minimise risk, it is safer to move the target entry price a further 10 points away". Apart from being a bit ambiguous (away from what?) it seems an oddly loose instruction.

Anyone had experience?

chris
 

Bigbusiness

Experienced member
The worst bit about this lot is they use the most possible points obtainable in their records. To do this, you would have to know the exact high or low of the index you are trading each day. That would be better than winning the lottery and a lot less likely.

They say they are looking for 10 points each day, then they use figures that are impossible to achieve.

It must be easy money for them. All they do is get the pivot points, add the points and sell the numbers to their subscribers.
 

juanbyte

Well-known member
Well said Bigbusiness the profits stated are very misleading also many of the spread firms will not allow a stop at a distance of 20 and if it were possible you are charged a wider spread.

The free trial is an email of prices after the markets have closed ???
 

Bigbusiness

Experienced member
Yes, the free trial is an email of prices after the market has closed. Might as well look at the pivot points before the market opens.
 

Vislikke

Junior member
Bigbusiness said:
Yes, the free trial is an email of prices after the market has closed. Might as well look at the pivot points before the market opens.

I am trying out the chinese numbers system on a free trial for a month with live numbers. Since last week Wednesday I have traded 13 times and profited on 8 trades by 10 points or more and lost 20 points on 5 occasions. The R1 and S1 points do seem to be the ones used by this system.

You are also right in your previous post Bb in that they do mislead people by stating the Maximum Point Gain possible. Part of "their" strategy is that you shouldn't trade if the index opens above or below their numbers. Yet even when this happens they are still showing that they trade and take the MPG as the representative points made. Misleading in the extreme !

Also interesting to note that they won't give out any physical address or telephone information.

I will let you know how the rest of my 1 month trial goes.
 

Bigbusiness

Experienced member
It is a shame that they are probably making a lot of money out of other people taking the risk to use what looks like a rather poor trading system. Their numbers are very close to pivot points that anyone could work out for free. Also the exit strategy is not clear and their profit calculations presume that you know the high and low of the day before trading.

Trying to trade at the points they recommend using a spreadbet company must be extremely difficult. The 10 points index movement would be useless with a spread and slippage.

I wish there was more regulation to stop people making money from schemes like this.
 
If people were sensible then these schemes would find zero customers - but so many people are desperate to make 'free' money that they throw their common sense out of the window.
 
 
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