The Volatile IBEX - a simple trading strategy..

[nkruger]

Here's a SIMPLE strategy to day trade the Spanish IBEX indice.

1 minute chart. 8 Ema 10 Ma 50 Ma
Stochastic 39 1 1
Macd 12 26 9
ADX Dir. Movement

To keep it simple I only use a couple of indicators to signal an entry. Crossover of the 8 & 10 Ma's to put you "ON ALERT". Crossover of the 50 Ma for a really safe entry. Once on alert, watch for the Stochastic to be either over 90 and come down below 75 for a 'short' or under 10 and come back up over 25 for a 'long. The ADX and Macd are really there for confirmation. This strategy started with nearly 10 indicators but was getting too complicated - this works fine. Today it signaled 2 trades of around 55 points before the US open. It's a bit racey before 9am, so I usually look at an entry after that. Between
14.00 and 15.00 it can become a bit more volatile, depending on what the Dow is doing, although I've usually bagged my daily points target by then anyway......

Please suggest any refinements you can, and hopefully we can make this into tradeable strategy for all members to use.

 

[nkruger]

When i say 'refinements' does anyone know of an indicator that may get me into a trade a tiny bit quicker than the Stochastic setting I'm using at the moment ?

 

[options]

Try this.

Bollinger 60/2
And I hate bollingers, but this seems to work.

I personally would drop the adx.

 

[options]

Should have said. This is great for showing overbought/oversold momentum, maybe something like a linear regression on the price may be better to highlight the 'rubber band' technique. The BB's still suffer from the dreaded 'walking the line'.

 

[options]

Anyway!!!

How much earlier do you want to get into a trade????
On the 1 min dow you are getting near pinpoint entries.
I'm using a slower(?) 3 min chart and that gave a nice easy 60 points a short while ago. Just had a look at the 1 min and you would have to be a heart surgeon to get any more precise.

What i have done is to use 39/1/8 and am using the 8 as a filter. Ie Both have to be going the same way for a trade to be valid. If the 39 goes up through a down 8 then trade is no good both must be going same way. Take a look.(At least that's the case for the min chart

 

[nkruger]

How much earlier do you want to get into a trade????
On the 1 min dow you are getting near pinpoint entries.
I'm using a slower(?) 3 min chart and that gave a nice easy 60 points a short while ago. Just had a look at the 1 min and you would have to be a heart surgeon to get any more precise.

OK, I'll admit it is quite quick, butI am on the Holy Grail Hunt remember.

PS. It was the cartoonist, Walt Kelly's character Pogo thats said " We have met the enemy, and they is us" A very apt statement in the psychology of trading........

Yours etc. Dr Kruger.

 

[options]

Thanks Doc.

Hadn't heard that one being accredited to him. Have heard others claim fame for it though.

Still: Re the BB's I just mentioned. I think I will take them off, I don't really think they are worthy of inclusion and will just cloud your mind.

Back to good old price and pivots then.

 

[nkruger]

Anyway!!!

What i have done is to use 39/1/8 and am using the 8 as a filter. Ie Both have to be going the same way for a trade to be valid. If the 39 goes up through a down 8 then trade is no good both must be going same way. Take a look.(At least that's the case for the min chart

Yes I like that. On first glance, I think the position of the 8 line (ie. whether it's above 75 or below 25 when the 39 line signals a trade) has some bearing on the strength and validity of the signal. What do you think ?

 

[nkruger]

Re the BB's I think I will take them off, I don't really think they are worthy of inclusion and will just cloud your mind.

Back to good old price and pivots then.

I agree with the Bollingers, I don't enjoy them, and I have a copy of Principles of Profit, which is entire book on a Bollinger Band trading strategy and how accurate your trading could be by using them... mmmmm. Not really impressed.
I have found pivot points have worked occasionally on the Ibex, but not as good as they do with the Dax/Dow

 

[options]

I am also using the 50 line as a long/short market indicator. If it goes under fifty stay short.

Just taken a look at the Ibex today on a 1 and 3 min chart. And I have both feet firmly planted up me backside now because I missed this one.

What a lovely move that was from around 10.30 today. Could've rode that one all the way down to the bottom until about now.

What has happened to the volatility that used to kill people?

 

[nkruger]

What a lovely move that was from around 10.30 today. Could've rode that one all the way down to the bottom until about now.

What has happened to the volatility that used to kill people?

I've never thought the index looked particularily volatile when viewed on a 1 min chart, unless the Dow is playing silly b*ggers at 2.30. Was a nice move down today, you're right. I think we've refined the trading strategy quite a bit today - thanks for your input. I'm off for a walk across the fields to the pub now for a swift livener..... 'til tomorrow then.

NK

 

[eddyjo]

interesting strategy, similar to one i am using, but in place of MACD i use 'div' on RSI.

i also have p/points on the chart.

regards eddyjo.

 

[nkruger]

in place of MACD i use 'div' on RSI.

Not come across that one - how does that strat work ? (forgive my ignorance) Are you also trading the Ibex ?

 

[Dinos]

Options, Hi, the 39,1,8, are we taking stochastics, which one slow, fast or full?

 

[eddyjo]

Not come across that one - how does that strat work ? (forgive my ignorance) Are you also trading the Ibex ?

to be more explicit i use e.o.d, 3mth daily, 3,13, 39. MAs, stoch, 14,3,5. r.s.i. 14.

pivot points...... how i use the R.S.I ? by drawing 'trend lines' on tops/bottoms. and

watching for breaks of the trend to confirm the price action,stochs i use as

overbought/o'sold. 'I'm sorry if this is a little short on detail but it is the general idea.

eddyjo.

 

[options]

Dinos

Normal stochs and as you read 'em down. Also put in a 50 line. Long above. Short below.

This one minute frame is dragging me back to scalping. And I just got used to hour charts.


But you get good sigs on longer frames.

 

[fibonelli]

I use Bollinger Bands. You also see interesting things when you play around with the settings. Still can't get used to the MACD and so I don't use it.

 

[nkruger]

Thanks Guy's.

Thank you Options, Eddy Jo, Dinos and Fibonelli for all you input today, really going to enjoy trading this one

Wouldn't mind refining it into an End of Day strategy for the Ibex as well, got Glastonbury soon........

 

[options]

Well to start with you wouldn't have to do much refining. Looking at a few eod's you would also get a bit of a warning of a turn coming. Problem being you would need bigger stops of course.

Using divergence between price and the indicator gives you a clue.

 

[nkruger]

Using divergence between price and the indicator gives you a clue.

Forgive my ignorance, but is that where the price is 'trending' one way (say up) and the indicator is trending in an opposite direction (down) ? Have heard of this on these boards but never really got into it.