Yamato
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Benton D Struckcheon
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Cool.
Just proved to myself, for about the thousandth time, that the following constitutes a sound core for a tradeable system on a daily/weekly timeframe:
10 period SMA
10 period RSI
The rules that underpin every system I ever traded were that three things had to agree, to wit:
1 - Price had to be above/below SMA
2 - SMA had to be rising/falling
3 - RSI had to be over/under 50
Fourth rule is that the RSI period MUST equal the SMA period. Fifth rule was to ignore the nonsense about overbought/oversold periods existing in the RSI: the 70/30 or 80/20 lines commonly used for this are, I've found, valueless.
SMA varies with the timeframe: I use 10 for daily or weekly signals, 6 for intraday on a 30 minute timeframe. (this only works if you ignore overnight trading, and are trading on the 9:30 - 4:00 EST of New York; for FX or for other markets whose hours may be longer or shorter, other timeframes and SMA's doubtlessly work better. And all of this is in the context of swing or even "position" (on the weekly charts) trading; I've never been a daytrader.)
Of course, this is only the core. In real life, I long ago replaced RSI with something that I think is a lot better, and even before that, I was calculating RSI differently from the way it is for these charting programs. But the above is, IMO, a good start.
Yamato
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Ok, so if those three conditions (above SMA, SMA rising, above 50) are met can we go long or short?
...
I tried for thirty minutes and tripled the 10k, going against them. If price was above, sma rising, and rsi above 50, I went short, and viceversa. It's really interesting how an indicator (maybe any indicator?) keeps you from going crazy. I was trying to trade with just s/r levels, and in the first 20 minutes it worked, and more than doubled capital, but then I started going crazy and being unable to either cut losses or to identify s/r... basically now, with these indicators, it's much better. Thank you for the advice. Please answer those questions above as well if you get a chance.
I just looked at the indicators you told me to use, and kept increasing capital... I never trusted those two indicators, but somehow they worked. Now I'll keep on doing it and if I can bring 10k to 100k, then they'll start making sense to me.
...
Didn't work. Got 10k to 45k, and then got tired and started screwing around, and lost almost all gains. Besides, I don't even know if I understood his method correctly.
...
I tried for thirty minutes and tripled the 10k, going against them. If price was above, sma rising, and rsi above 50, I went short, and viceversa. It's really interesting how an indicator (maybe any indicator?) keeps you from going crazy. I was trying to trade with just s/r levels, and in the first 20 minutes it worked, and more than doubled capital, but then I started going crazy and being unable to either cut losses or to identify s/r... basically now, with these indicators, it's much better. Thank you for the advice. Please answer those questions above as well if you get a chance.
I just looked at the indicators you told me to use, and kept increasing capital... I never trusted those two indicators, but somehow they worked. Now I'll keep on doing it and if I can bring 10k to 100k, then they'll start making sense to me.
...
Didn't work. Got 10k to 45k, and then got tired and started screwing around, and lost almost all gains. Besides, I don't even know if I understood his method correctly.
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dimsdaletraders
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Hope it's okay to go "off topic" again, but I meant to ask you this a while back, and forgot!
My partner and I are both Risk fanatics, we play it on the PS2, but I saw you were playing online. Is that on the PC, the PS3, or...?
Happy trading, travis!
Tess
My partner and I are both Risk fanatics, we play it on the PS2, but I saw you were playing online. Is that on the PC, the PS3, or...?
Happy trading, travis!
Tess
Yamato
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www.missionrisk.com
We've been playing with another reader. I hope you download it and then you can message me so we can meet and play.
We've been playing with another reader. I hope you download it and then you can message me so we can meet and play.
Yamato
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restless, impatient, compulsive...
What the hell is the matter with me, or as that girl used to ask me, "what is wrong with me?". I engage in compulsive gambling whether I am investing real money or I am paper trading, or I am playing this chart game:
http://chartgame.com/
The first trades are always fine, then I start getting restless and impatient and I lose money. No wonder my only profitable trading has been with automated trading.
You either tell me exactly what I have to do, or it's not going to work. I've been playing this chart game for hours, and I want to figure it out for good, but I can't.
This game is not just any game - it's the key to everything. If I can figure out this game, I am rich.
Come on, Benton, teach me this thing with sma and rsi, i want to learn it. But teach me all the way, not just half way.
What the hell is the matter with me, or as that girl used to ask me, "what is wrong with me?". I engage in compulsive gambling whether I am investing real money or I am paper trading, or I am playing this chart game:
http://chartgame.com/
The first trades are always fine, then I start getting restless and impatient and I lose money. No wonder my only profitable trading has been with automated trading.
You either tell me exactly what I have to do, or it's not going to work. I've been playing this chart game for hours, and I want to figure it out for good, but I can't.
This game is not just any game - it's the key to everything. If I can figure out this game, I am rich.
Come on, Benton, teach me this thing with sma and rsi, i want to learn it. But teach me all the way, not just half way.
Yamato
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That's it. I give up. I can't believe I am giving up on a free simulator, which seemed to answer to all my questions. It seemed like the greatest link ever, and I am giving up. That means there's no way i will ever find out how to make money with real trading, since the number of experiments i can make with real trading is much smaller than here. So maybe I am not after finding out how to make money, but only after gambling. Otherwise I'd keep on practicing this thing. But maybe I will try again tomorrow. I sure hope I get obsessed with this thing until i figure it out. And if I do, i can apply what i figure out to any market.
Yamato
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Ok, here's a method that works and that is simple. I get the chart, I look at the last 4 years, which is what I am given. I find the highest point and the lowest point. I wait for price to reach that point, and then I bet on a bounce. That's all. It works, it's simple.
What I do not like is how irregular it is, and how rare the trades are. I'd like something regular, frequent... I mean i could trade once or twice every years with such a method, and it could only be viable through a chart game like this is.
However, it's a start. I need to practice more and more and see if I can finetune this thing to perfection.
Benton D Struckcheon
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Re: restless, impatient, compulsive...
You went against it and did that well? Interesting...
Anyway, that's like I said just the core part. I also don't (or I should say didn't) calc the RSI in the standard way: if its supposed to be an RSI of 10, then that included the current period, not the previous 10 plus the current period, which is the way the charts calc it. Also, I never included any history, which meant the RSI could go to 100 or 0, and it very frequently did on the intraday stuff. Especially on the plus/minus 50 this made it much faster and more responsive, which of course helped returns quite nicely.
Everything else I've ever added on to my systems besides this relatively simple and standard stuff was to reduce whipsaws, tell me when reversals would take place, and even give me an indication if the thing was trending or just going sideways.
I made my college-age son (a true math whiz, but damn is he lazy) give me a better indicator, by showing him how I calc'ed the RSI, and then telling him exactly what I wanted out of it. I tortured him for a month, but I got what I now consider my Holy Grail out of it. Not giving that away.
But make the above tweaks to the RSI and it becomes a really useful indicator.
I like that 4 year idea. Was that on just stocks or did you ever try that on stock indexes?
You went against it and did that well? Interesting...
Anyway, that's like I said just the core part. I also don't (or I should say didn't) calc the RSI in the standard way: if its supposed to be an RSI of 10, then that included the current period, not the previous 10 plus the current period, which is the way the charts calc it. Also, I never included any history, which meant the RSI could go to 100 or 0, and it very frequently did on the intraday stuff. Especially on the plus/minus 50 this made it much faster and more responsive, which of course helped returns quite nicely.
Everything else I've ever added on to my systems besides this relatively simple and standard stuff was to reduce whipsaws, tell me when reversals would take place, and even give me an indication if the thing was trending or just going sideways.
I made my college-age son (a true math whiz, but damn is he lazy) give me a better indicator, by showing him how I calc'ed the RSI, and then telling him exactly what I wanted out of it. I tortured him for a month, but I got what I now consider my Holy Grail out of it. Not giving that away.
But make the above tweaks to the RSI and it becomes a really useful indicator.
I like that 4 year idea. Was that on just stocks or did you ever try that on stock indexes?
Yamato
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practicing again: 20k
Ok, going without any method right now. Only s/r levels. And I've doubled it again.
Now hopefully I won't get bored and start gambling, by leaving unprofitable trades open and hoping for them to come back. Yes, because that's exactly what gambling to me is letting losers get away. Losing control of losers. And also not waiting for the right entry opportunity.
I enter as soon as it touches a s/r level. In case I enter a bit early I don't exit until the real s/r level has been violated. I sometimes anticipate because when price is highly overstretched, it is also likely to anticipate and i don't want to miss that trade. I use s/r levels when we're in a range. I use only support levels when we're beyond any resistance. And viceversa. At any time I am only considering 2 s/r level. One support and one resistance.
As an exit from my profitable trades, I use the color of candles: if I am long and I get a black candle, then I exit, and viceversa.
For non-profitable trades, I exit as soon as my level is violated and it doesn't bounce on it.
Right now it's going well. I'll keep you updated. I'll post these pictures of the account hopefully all the way to 100k. And then summarize my method again, in case it's changed from the above.
Never mind the 50 SMA. It's in the picture but I am not using it. I'll get rid of it now.
Ok, going without any method right now. Only s/r levels. And I've doubled it again.
Now hopefully I won't get bored and start gambling, by leaving unprofitable trades open and hoping for them to come back. Yes, because that's exactly what gambling to me is letting losers get away. Losing control of losers. And also not waiting for the right entry opportunity.
I enter as soon as it touches a s/r level. In case I enter a bit early I don't exit until the real s/r level has been violated. I sometimes anticipate because when price is highly overstretched, it is also likely to anticipate and i don't want to miss that trade. I use s/r levels when we're in a range. I use only support levels when we're beyond any resistance. And viceversa. At any time I am only considering 2 s/r level. One support and one resistance.
As an exit from my profitable trades, I use the color of candles: if I am long and I get a black candle, then I exit, and viceversa.
For non-profitable trades, I exit as soon as my level is violated and it doesn't bounce on it.
Right now it's going well. I'll keep you updated. I'll post these pictures of the account hopefully all the way to 100k. And then summarize my method again, in case it's changed from the above.
Never mind the 50 SMA. It's in the picture but I am not using it. I'll get rid of it now.
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Yamato
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I blew it again. I guess I got impatient, and with no univocal entry/exit rules, impatience got to my thinking and... got to zero again.
This seems to be the pattern in my real trading and in this simulated accelerated trading: I start by doing well, then after a few trades, my reasoning goes bad and i lose everything. That's why I should stick to the rule of making one trade per day in real trading, and only half an hour of practicing on this simulator. After a while in terms of trades/time, I start being less and less careful about picking my entries and exits.
This seems to be the pattern in my real trading and in this simulated accelerated trading: I start by doing well, then after a few trades, my reasoning goes bad and i lose everything. That's why I should stick to the rule of making one trade per day in real trading, and only half an hour of practicing on this simulator. After a while in terms of trades/time, I start being less and less careful about picking my entries and exits.
Yamato
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Ok, one more try.
Now I'll automated this thing in a way that no matter how tired I get I'll still make money.
Now, since stocks usually go up more than down, I will only play LONG opportunities.
So I will be looking for support levels only.
I will look for the best support level in every chart I am given, and I will go long on that level as soon as it gets reached.
If profitable, I will stay long until a daily candle fails to make a new high.
If unprofitable, I will allow 3 days for my position to become profitable.
I will come back if I modify this.
The only discretionary thing is picking that support level, and only because I haven't figure out how to define it univocally (swing low, lowest low... that type of thing).
Now I'll automated this thing in a way that no matter how tired I get I'll still make money.
Now, since stocks usually go up more than down, I will only play LONG opportunities.
So I will be looking for support levels only.
I will look for the best support level in every chart I am given, and I will go long on that level as soon as it gets reached.
If profitable, I will stay long until a daily candle fails to make a new high.
If unprofitable, I will allow 3 days for my position to become profitable.
I will come back if I modify this.
The only discretionary thing is picking that support level, and only because I haven't figure out how to define it univocally (swing low, lowest low... that type of thing).
Yamato
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Yamato
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Nope. I got tired and I am stopping here at 17k. I can tell what gets me tired is the discretionary part. Constantly having to decide when to enter and when to exit. S/R is not univocally defined: I have to guess it each time. As a consequence, also entry is not defined. And then it ensues that also exits are not defined univocally. This constant guessing is what makes me tired, or maybe it has to do with the fear of being wrong. Both things.
That's what makes automated systems so powerful. Even with a small edge, they can perform tirelessly, without feeling any of this stress, so that an automated system by making 10 pretty good trades per day can outperform a human, who can only make two very good trades per day, without feeling so much stress that he'll start giving all the money back.
That's what makes automated systems so powerful. Even with a small edge, they can perform tirelessly, without feeling any of this stress, so that an automated system by making 10 pretty good trades per day can outperform a human, who can only make two very good trades per day, without feeling so much stress that he'll start giving all the money back.
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Yamato
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Ok, I think i got it. This has to be practiced as if you weren't playing money and if you weren't playing to win.
You just have to forget all rules and all parameters and keep on playing and playing, regardless of how much you lose, until you figure out how it works. That's what I'll do. I don't have to impress anyone. I just have to practice until I figure out how it works. S/R definitely work, price is not random... it can be figured out. Forget indicators or anything else. All I needed to know, I know. Now I'll just keep on playing it like any video game. Once I figure it out, basically I have become profitable. Then it can be done also on real trading.
The big difference is the speed though. Huge difference.
You just have to forget all rules and all parameters and keep on playing and playing, regardless of how much you lose, until you figure out how it works. That's what I'll do. I don't have to impress anyone. I just have to practice until I figure out how it works. S/R definitely work, price is not random... it can be figured out. Forget indicators or anything else. All I needed to know, I know. Now I'll just keep on playing it like any video game. Once I figure it out, basically I have become profitable. Then it can be done also on real trading.
The big difference is the speed though. Huge difference.
Benton D Struckcheon
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Hilarious. Just finished reading The Basic Laws of Human Stupidity. Great stuff. Many thanks.
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