simple moving average system

[new_trader]

While giving birth to a 1min set-up strategy on the Spanish Ibex index, I have noticed that a very simple moving average system would work quite well on it, but not sure if it would be a success on anything else. I reset the chart to 5 mins and noticed that using a 50MA you could go long or short as the MA line goes above or below the price, and capture 15-20 pips a day. At first glance it looks good, although it may be unique to the Ibex as it is a volatile index.

I hope you don't mind me asking, but how far back do you test your strategies? Do you have statistics like win/loss ratio's, drawdowns and consecutive losses etc? Do you forward test them to ensure they are valid?

 

[nkruger]

On this one this morning, I just looked at the last month's charts on CMC, noticed that it 'looked' ok, so I'll forward test it at a £1 per pip and see how I go. Not really been too bothered with win/loss ratios (should be, I suppose) and the drawdowns I haven't really calculated as the amount I stake is such a small part of my bank. Once I'm down 20 pips on any trade I call it a day and wait for another set-up to rear it's ugly head. Not very scientific but it works for me !!

 

[new_trader]

On this one this morning, I just looked at the last month's charts on CMC, noticed that it 'looked' ok, so I'll forward test it at a £1 per pip and see how I go. Not really been too bothered with win/loss ratios (should be, I suppose) and the drawdowns I haven't really calculated as the amount I stake is such a small part of my bank. Once I'm down 20 pips on any trade I call it a day and wait for another set-up to rear it's ugly head. Not very scientific but it works for me !!

Ok. But, if I may say so, I don't know why you even bother with systems and/or indicators if that is the way you trade.

 

[nkruger]

I don't know why you even bother with systems and/or indicators if that is the way you trade.

I bother with indicators and systems because they win me money at spreadbetting and that, in turn allows me to do this full time, as a business, earning more than I did than when I was working 9-6 in an office.

 

[new_trader]

I bother with indicators and systems because they win me money at spreadbetting and that, in turn allows me to do this full time, as a business, earning more than I did than when I was working 9-6 in an office.

I see..You seemed to me to be flippant about your trading and the money at stake that I wondered why you bothered with any strategy. Now you tell me you depend on this for a living? :-0

You really make trading sound so easy that I wonder where I have been going wrong all this time.

Maybe I am too conservative with my trading and my abilities....:?:

 

[nkruger]

You seemed to me to be flippant about your trading and the money at stake that I wondered why you bothered with any strategy. Now you tell me you depend on this for a living?

What may appear to be flippancy, at first glance is really an ease I find with using money to make more money, something I've been doing since I left college in the early 80's in the career I worked at before this captured my heart.
I always have a clear exit strategy once I've commited myself to a trade and I also will cease trading on any particular day if:
1) I have more than 2 losing trades in a row, and
2) If I have a large winning trade (more than 100 pips)

I find this MO makes for a relaxing day at 'the office'

 

[neil]

Good Point

What may appear to be flippancy, at first glance is really an ease I find with using money to make more money, something I've been doing since I left college in the early 80's in the career I worked at before this captured my heart.
I always have a clear exit strategy once I've commited myself to a trade and I also will cease trading on any particular day if:
1) I have more than 2 losing trades in a row, and
2) If I have a large winning trade (more than 100 pips)

I find this MO makes for a relaxing day at 'the office'

Point (1) is very important for survival - several traders have mentioned this in books and other literature pertaining to trading.Good luck

 

[nkruger]

Point (1) is very important for survival - several traders have mentioned this in books and other literature pertaining to trading.Good luck

And one other point (which has only happened twice in the last year) if I have 2 losing days in a row I stop trading 'til the next week.

 

[options]

Actually, that's a good way of getting a holiday. Although I prefer to take one on a high.

IE. If I get it right' the first week of the month is all I need to trade on the fx. I can take the rest of the month off.

Very rarely do though.

 

[nkruger]

Actually, that's a good way of getting a holiday. Although I prefer to take one on a high.

IE. If I get it right' the first week of the month is all I need to trade on the fx. I can take the rest of the month off.

Very rarely do though.

Headoffice (Mrs. nkruger) still can't understand why I stop working and go out for the day when I've had a couple losing trades, she thinks I should try and make it back V.DANGEROUS !!

 

[nkruger]

Actually, that's a good way of getting a holiday. Although I prefer to take one on a high.

HOLIDAYS

Must have a good couple of days, pipwise - it's off to Glastonbury Thurs. morning

 

[options]

Mmmmm, very debatable.

Quite often when I used to trade futeres, I would get 3 losing trades in a row, then make it all good on the last trade. Then I would stop.

But the 'compulsion' to trade and get it back. Is or can be overwhelming and has gone very wrong on occasion.

Nowadays though I tend to agree. Get it wrong a few times and close down and do something else. It clearly is not your day and you aren't reading your charts properly or acting properly. At least the next day or so you will still have an account to trade with.

You won't have winning days every day, but by only trading when its 'right' will increase your win to lose ratio.

Recognising the lose days in the early years is very hard to do and at the same time very hard to admit to yourself that you screwed up.

Also the compulsion to tweek your trading is very strong. Leave it alone. It worked before. The conditions were not right when you lost. Wait for the 'right' conditions to come along again.

 

[Lightning McQueen]

smas evolution - auto order entry

Hi all

Been a while since I updated this thread, major update coming this weekend for free system fans.

Anyone that has taken an interest in my antics will be aware of the issues I have had regarding the entries, I hold the strong view (rightly or wrongly) that the correct trade entry is the most important part of a trading system, get this right and all the other probs like stops, money management really would look after themselves.

so the question I have for you all is what time frame would you like to see 5 or 30 min? 2 or 4 hr? any tf, the choice is yours.

laters

 

[Lightning McQueen]

4 hr tf seems fave at present, so unless i get pm or posts today changing that consensus thats what i will post on tomorrow, maybe new thread and close this one :idea:

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This thread is now closed ...new thread here

All new and improved day trading method!!!

http://www.trade2win.com/boards/mechanical-systems-trading/28101-three-keys.html#post381389

Thank you one and all for your help and insights along the path, it has been a long one for me but I feel it was worth it, still learning, still trying to be a trader, nearly there now.

cheers all

don