Grab And Run

[dailydow]

My first post so go easy guys.
This system does seem to be a long winded one where a great deal of time is spent waiting for the trades to arrive and we all know that traders with time on there hands will overtrade, so is it suited to us i wonder.Yes it is a mechanical trade and that is the nature of the beast.
One thing it has opened my eyes to is the large range on the dow.With the average up down from the open of 96 each way all be it less for the last 6 months what i am seeing is that there are 192 points going begging to be taken EACH and evry day.
How many points do we want do we want to wait for 100-200 points with the 96 point system or do we want to take 10-20 points perday. I know what i would want.
So how can we get 10-20 points from a 150-200 point range.
Grab and run technique springs to mind.set a buy or sell order grab some points then run with a stop order with 10-20 points in your pocket and LEAVE THE BUILDING JUST WALK AWAY.
If the market runs up or down another 100 points so be it youve got your 10-20 safely tucked away and safe in the knowledge that you can come back tomorrow and grab somemore.

So based on this how about a discussion on how best to acheive the GRAB AND RUN perhaps bye straddling the close or by planting traps after pops to the upside and downside. We all know how regular gaps get filled traps in a gap would grab your points. Anyway didnt want to hijack the 96 point thread so will set up a new thread entitled GRAB AND RUN .
The reason for posting here first is theres a lot of great minds throwing there weight together all looking for the holy grail so if you think anything of what ive saidhas potential the please post your opinions .
Thanks for listening.
Philip

 

[rglenn]

Phillip this is not a bad idea and has been discussed on these boards before.

However you will need to increase your stakes quite a bit in order to achieve a favourable profit.

If you don't already know there a many ways to achieve the same objectives.

Some people are comfortable with one way others are not.

So if this is the way that you feel comfortable with go for it.

It is not better or worse than any other method - just a means to achieve an objective.

 

[gmca686]

Dailydow,
An interesting post.
There is a technique which I have successfully used, but no doubt I'll get shouted at by someone saying "you cannot be serious."
If a market is not in a strong up or down trend but is oscillating within a horizontal channel, why bother trying to work out whether it will go up or down.
Pre market open (I'm spread betting) go LONG and SHORT with a basic stake. (you either need 2 accounts or use the Dow and S&P)Once the direction is established, double/treble the winning position. You can either sell the losing position or hold on. I tend to hold on. At the end of the short term move I sell the winning position and double the stake in the losing position to "pound cost average" I then manage the exit from the losing position based on market behaviour. I have been in and out of several trades on the winning side before I feel comfortable exiting the losing position. I am also willing to hold losing positions for weeks in order to wait for it to come good, but in the meantime I am trading the winning direction, so effectively I am hedged!
I operate without stops, so this is not for those of a nervous disposition! One day I'll either make a lot of money or be completely blown away by the market!
Constructive comments welcome.

 

[rglenn]

Gmca686

I use a similar system on the Dow which has served me well.

I have used other people's ideas to improve the system.

A hedging element in a system is very valuable especially in these ever changing markets- it certainly helps to reduce the large drawdowns if you get things wrong!

 

[jpwone]

Hi Philip

the average plus day is plus 93 points (average is dropping) and the average minus day is the minus 93 points (or thereabouts). This has dropped a couple of points in the last six months or so.

Anyhow, this is the average gain or loss from the previous days close. It is not the plus and minus halves of the average day range. The average day range is the average from the low to the high of the day.

I do not know what the Average Day Range is on the Dow at the moment but I would be very surprised if it was anywhere near 192 points. I suspect it is closer to the 100 mark.

Hope this helps

John

 

[dailydow]

This is a method that i was thinking about by straddling the open.
Have heard it mentioned on other boards before but basically after the close give it half hour to coolthen set up some stop buys and stop sells with limit buys and limit sells in place for your profits.
Yes you could get whipped out of both but after 9 pm whe the market has closed things do calm down on out of hours trading spreadbet.


limit sell 9040
stop buy 9020
dow close 9000
stop sell 8980
limit buy 8960

in this example your points wpuld be 20 if hit profit.
you will have a loss of 40 points if your stop buy is triggered then it whips down to your stop sell.
if it then carries down through your limit buy theres problems.
Anyway thats where this board comes into to discuss developments just throwing some ideas on the table.

And Darren this would all be mechanical trading i along with everyone else is looking for mechanical trades.
Cheers
Philip

 

[dailydow]

John
not including yesterday figure the last 20 days range has averaged 153 with figures taken from bigcharts.

only one day less than 100 and that was 99 top was 210.

this was last months dow figures.
So there is still the oppurtunity to take the 10-20 points.

and in reply to increasing your stake size for this system 10 points a day 5 days a week at £10 point is £500.

a little a day adds up. My problems and i thi9nk a great many other peoples is to increase stakes to quickly when we are winning then when we loe we are wiped out .Have done it many times so am now trying to find some disciplined trading style to keep me away from this habit.
Cheers
Philip

 

[oatman]

You are assuming you make a profit every day.

 

[Bigbusiness]

Big charts high and low figures after the close are not correct:-

3.12.03 High 9,974.45 Low 9,824.31
Actual High 9,942.0 Low 9,851.4

I get the correct numbers from here but they don't update them for a while after the market has closed:-

http://www.eoddata.com/

As far as I know, the reason for the difference is that bigcharts uses the old way of calculating the high and low. It takes the high and low of all the 30 stocks in the Dow. As they do not hit their highs and lows at the same time, this gives a different number to the Dow cash index. It leads to a lot of confusion when looking at data.

 

[dailydow]

And that is the purpose of the thread oat man to think of some way to extract 10 points from a 150 point range every day.

My thoughts have allways been to get as much as i can per day but this isnt being very succesfull and i want to change my ways.

Just wanted to invoke some discussion on simple ideas the simpler the better.

if a market runs up 40 points at the open then stalls then runs again 30 a trap can then be set between 40 and 70 to cacth 10 points on the retrace. In fact why not set up a trap at 20-30 points for the day incase the market retraces all the way and closes the gap.
I just think that when we start thinking in real small amounts of pointds per day that it actually becomes realistic to get our targets.

Cheers
Philip

 

[Bigbusiness]

I think the average range since about August is just under 100 points but I could be wrong. I will check later.

 

[dailydow]

Yes that does alter the range quiet considerably from 150 to 91 but i think my idea is still valid.

This may sound stupid but just thinking aloud if you look in hindsight at previous days charts it is easy to see where the big falls or gains started maybe twice a day sometimes more. By big i mean 50 pointers. But how many easy ten point hindsight set ups can you see many more so making it easier to cacth the small fry.

Cheers for hindsight
Philip

 

[JonnyT]

Sorry Guys but too simplistic.

Where do you have a stop?

The market often moves up 50 points then totally retraces.

For example you want 20 points per day.

The market moves 15 points in your favour then goes down 50 points. What do you do?

In general your average win simply has to be bigger than your average loss, if it isn't you have to have a very very good win ratio taking into account costs.

Typically sucessful traders have a win/loss ratio no higher than 40%.

If you are trying to bag 20 points a day (from a single trade) your stop would have to be something like 10 points to have a chance of being successful long term. That is too near the market IMHO.

Sorry I cannot be more constructive.

JonnyT

 

[eminem]

BB you are right the average probably is nearer 100 - the 10 day average range for the last 10 days is 86.0 and the 10 day ave has moved around from the low 80's to around 130 over the last 6 months or so from the figures I have using the intraday numbers. 100 would seem to be a reasonable average to use for any testing purposes.

 

[Bigbusiness]

One possible idea I looked at in the past was going long if after 7pm the high of the day was broken. Try and use a 20 point stop but move it closer as the trade goes in to profit. This will reduce the average stop to say 10 to 15 points. Then take 15 to 20 points profit or take half and let the other half run. Do the opposite for shorts.

I only looked at this on charts and haven't traded it. The entry is easy but the exit might depend on the daily range. I would look at a longer term chart to see if a good move was likely.

 

[oatman]

I'm with Jonny on this. You're talking about "trading". You can't just trap 20 points.
It don't work like that :cheesy:
Often the last half hour trends, but you can't rely on anything.

An afterthought, have a look at 3X3 P&F hilo breakouts. That could "trap" you a few points. I don't know the stop level tho. You'll have to the maths.

 

[JonnyT]

Hi Oatman,

I developed a system based on your 3x3 method using the FTSE that averaged 5 points a trade using extensive backtesting.

I was going to trade it automatically, but I simply found a better alternative using the EUR/USD. As I develope my systems further I probably will have another look at this.

PS I couldn't get similar systems to work with the US Indices, completely different kettles of fish.

JonnyT

 

[oatman]

I just thought it might help the Grabbit Boys. If you look at a 1min there are some good breaks. Obviously some false ones as well. Thought the mathmaticians might want something to play with :cheesy: Just another weapon in the armoury

ps. next break would be down at 9906 or 9900 on the YM

 

[ChartMan]

BB mostly you can trade the 7pm move just by looking at the overall picture for the day so far. It is often blindingly obvious what the play should be... Today is a typical example.

 

[Bigbusiness]

ChartMan,

I will have to take a closer look. I thought the support was going to break at 7pm tonight so I got that a bit wrong .