"Trading Day by Day" by Chick Goslin

[Roberto]

I use a pair of MAs to give me a LL ... basic direction ... and I physically cause myself pain if I ever trade against them. NO counter-trend trades. I use two different indicators for my ML (one is particular price behaviour). For me the ML is telling me when to delay trading in the direction of the LL until I get extra conviction that the retracement is over and price is likely to continue on. I use simple price patterns for my SL.So I ask for the trade to be in the direction of the LL and take it with simple SL if the ML doesn't say No. If the ML says No I wait for the ML to say yes of for more complex price patterns (SL). Exiting is another story. What do you think Roberto?

I think we're doing more or less the same thing. (I'm actually trying not to use 5-minute charts any more and to encourage myself to stick with 10m and 15m for trading Forex.) The problem is that I have no proof yet that making no counter-trend trades increases my success. But I imagine that's going to be even more true on charts of longer periodicity. And exiting is _always_ another story.

 

[peugots]

Is there any chance anyone can briefly summarise the Goslin strategy in a few lines, (without too much details in order to protect the interests of those who have purchased the book). It would be a great help if someone could kindly do that.

 

[tradertim]

Peugots - suggest you look at the link to Mr. Goslin`s IFT Point System on www.smr.com .

 

[Roberto]

Is there any chance anyone can briefly summarise the Goslin strategy in a few lines

I doubt it very much indeed. It's a very big book, and entirely contrary to the impression given on this board most of it is really _not_ about "a simple trading strategy" anyway. It's a much better book than that.

It would be a great help if someone could kindly do that.

I can see how one would imagine so, from some of the chat above, but honestly it wouldn't be a great help at all to anyone to try to do that. I really think it would be mistake to try, and it would inevitably do the book and the author absolutely no justice at all.

 

[peugots]

Peugots - suggest you look at the link to Mr. Goslin`s IFT Point System on www.smr.com .

Thanks for the positive reply tradertim. I have just read that article and it looks interesting. I guess it would do well in trending markets and might get whipped in a sideways zone (just guessing). It would be interesting to see how this approach would fare over a period of years although I suspect its too early to ask any UK traders.

 

[tradertim]

YW, Peugots - I too suspect Goslin`s methodology will be ineffective in choppy markets. As trader`s received wisdom has it that markets spend 80% of the time in a trading range, that seems to leave a high risk of drawdowns, or being out of the market for long periods (if you only take "concurrent" signals). Based on use of Goslin`s newsletter I note that seems to be Roberk`s experience so far. It would be interesting to see long term users/promoters of Goslin`s system posting some facts & figures about their trading results.

 

[s-a]

Thanks for the positive reply tradertim. I have just read that article and it looks interesting. I guess it would do well in trending markets and might get whipped in a sideways zone (just guessing). It would be interesting to see how this approach would fare over a period of years although I suspect its too early to ask any UK traders.

Hmmm...Chick has been trading for 30 years and he has used this method during what I gather is a majority of that time. TGM knows Chick personally and from the personal conversations I have had with TGM it sounds like Chick makes a very good living from trading this method. So best I can say is that this method has worked very well for Chick for years. I know it has worked very well for TGM for the last 11 years too. Correct, this approach clearly is trend following, but there is nothing to say you cannot make money in sideways markets with it. You just need a few extra tricks and more discipline.

HG

 

[s-a]

YW, Peugots - I too suspect Goslin`s methodology will be ineffective in choppy markets. As trader`s received wisdom has it that markets spend 80% of the time in a trading range, that seems to leave a high risk of drawdowns, or being out of the market for long periods (if you only take "concurrent" signals). Based on use of Goslin`s newsletter I note that seems to be Roberk`s experience so far. It would be interesting to see long term users/promoters of Goslin`s system posting some facts & figures about their trading results.

You guys are missing the point here.

I have made some good money the past month on cable and it has definitely been sideways during that time. You just need to think how it can be utilized and how to maintain your discipline.

I believe most people will not be able to trade Chicks approach, why? Because it requires you to treat trading as an up/down numbers _business_. Most people have insufficient restraint and are too emotional. Because of this they tend to gravitate towards extremely short-term trading thinking they are reducing their risk by having closer stops, but the reality is.....they are doing just the opposite. It has been my experience that using a wider stop giving your idea some time to work out is crucial - as long as the overall picture still looks good.

Chick's newletter is strictly educational. You have to realize that no matter how many people read and use Chick's system, they will probably all get very different results. IMHO, this will always be due to the individuals psychological make up. So asking for the results of others is useless IMHO. If you want to see others results, call Chick up and ask him :-0 Not many authors of trading books let you just call them up. That in itself is a testament to his character IMO.

HG

 

[TGM]

Chick actually posts some past audited account statements on line. Or he used to. Go to www.tradingdaybyday.com

As far as taking concurrent signals. There is always something moving if you trade a basket of markets. Any position trader is going to have a basket of markets to diversify or should have. Chick is no different and goes into this quite clearly in his first book as well as the second book. If something is sideways and you are looking at several markets why bother. Relative strength is an important concept in the book. You should be aware of your correlations. Trading the financials can mean trading all the financials on earth. Keep that in mind. Furthermore, when talking day trading or swing trading (say 60min, 120min or big tick charts), you need to be able to pick the right vehicle to day trade. Also, you need to add what I call an "outside line" to your trading. This is a larger time frame to give you the trend. For example, If you are scalping 5 minute Cable if would be a good idea to use 60 minute LL (for example) for your outside line to keep you on the right side of things.

 

[Roberto]

I guess it would do well in trending markets and might get whipped in a sideways zone (just guessing).

My guess is that it would do well in trending markets and stay out of sideways zones, for the most part.

I too suspect Goslin`s methodology will be ineffective in choppy markets.

I too suspect that that's why it avoids them.

As trader`s received wisdom has it that markets spend 80% of the time in a trading range, that seems to leave a high risk of drawdowns, or being out of the market for long periods

I think they vary quite a bit. My impression is that currencies often trend quite nicely. But I think perhaps the answer to this is that if indeed at any one time 80% of things are ranging, one should try to select one's trades from the other 20%.

It would be interesting to see long term users/promoters of Goslin`s system posting some facts & figures about their trading results.

I can't help you there - it's too early for me (if I decide to use some of what I've learned from the book in that way anyway). I'm a user and (I suppose) incidental promoter of his book, though, rather than his "system". I really, really don't think it can be described as anything approaching a "system" in the way that people normally understand that word. At the strongest, it's a "style of trading". Hope I'm not just being pedantic about this point; I really think there's a huge difference and people could easily get totally the wrong impression and imagine that this book is designed to present a complete trading system.

You have to realize that no matter how many people read and use Chick's system, they will probably all get very different results. IMHO, this will always be due to the individuals psychological make up. So asking for the results of others is useless IMHO. If you want to see others results, call Chick up and ask him :-0 Not many authors of trading books let you just call them up. That in itself is a testament to his character IMO.

Absolutely. Can't argue with that.

 

[tradertim]

s-a - Every trading system, or approach if you prefer, is likely to be affected by an individual`s psychological make-up. Despite this results for win/loss ratios, average win/loss amounts, maximum drawdowns, etc. are often provided on a year by year basis, so interested parties can make at least some sort of valued judgement for themselves. You say that you`ve been trading this way for 6 months, during which time presumably you`ve been successful, so can you give any guidance as to your experience of wins to losses, drawdowns, etc.?

TGM - I`ve already viewed the audited account dated May 1999 on Mr. Goslin`s website. However this is simply a brief statement of the profits & losses made by Mr. Goslin over certain periods of time. It makes no mention of what trading method(s) were used, or what the win/loss ratios, max. drawdowns, etc. were. Cynics like myself might wonder why there are no figures given for more up to date periods?

Roberto - I`m unfamiliar with FX & commodity markets, but in my experience with stock markets the indices (& large cap stocks) tend to move broadly in sync with each other, so when one is range bound the others are likely to be doing the same. Therefore it might be difficult to select trades from the other 20%. In due course I`m sure we`d all be interested to learn your experiences with trading this system (I used the term "system" as that is what Mr. Goslin himself called it on SMR`s website).

 

[TGM]

s-a - Every trading system, or approach if you prefer, is likely to be affected by an individual`s psychological make-up. Despite this results for win/loss ratios, average win/loss amounts, maximum drawdowns, etc. are often provided on a year by year basis, so interested parties can make at least some sort of valued judgement for themselves. You say that you`ve been trading this way for 6 months, during which time presumably you`ve been successful, so can you give any guidance as to your experience of wins to losses, drawdowns, etc.?

TGM - I`ve already viewed the audited account dated May 1999 on Mr. Goslin`s website. However this is simply a brief statement of the profits & losses made by Mr. Goslin over certain periods of time. It makes no mention of what trading method(s) were used, or what the win/loss ratios, max. draw downs, etc. were. Cynics like myself might wonder why there are no figures given for more up to date periods?

Roberto - I`m unfamiliar with FX & commodity markets, but in my experience with stock markets the indices (& large cap stocks) tend to move broadly in sync with each other, so when one is range bound the others are likely to be doing the same. Therefore it might be difficult to select trades from the other 20%. In due course I`m sure we`d all be interested to learn your experiences with trading this system (I used the term "system" as that is what Mr. Goslin himself called it on SMR`s website).

I guess he did not feel the need to give recent figures. IMO -- he makes more now than ever. He lives in La Jolla, California. He used to own several pieces of Real Estate in La Jolla. Needless to say, since he has traded for a living for decades. He has made some dough. For those who do not know anything about California real estate. Prices in La Jolla are stratospheric and always have been disgustingly high.

Obviously, you have not read the book. But I would say that 99.99% of folks who read the book would see your questions about % profits etc as useless. So would Chick. It is NOT a system book.

Win/ Loss percentage etc... will vary on an individual basis. Based on how you apply the approach and how skilled you are at applying it. This approach is not so much about buying at A and selling at B. It is about eliminating poor choices and putting the odds in your favour by making trading into an up and down numbers game. It is not like any trading book you have ever read or ever will read.

If you think he wrote this book as a fraud. Or if he is just trying to get rich by selling a trading book. Don't buy the book. Simple as that and I am being sincere. Sixty five dollars for THIS trading book is a JOKE. I could only dream to go back in time and get this book when I first started trading. It is worth several times it's cost ---easily.

Being a Cynic is fine. But after reading all these posts. Either there are a whole lot liars on T2W or it is a good book. Roberto made a good point. There are many good quality things about this book that have nothing to do with the method.

You are right Chick calls it a system. I have told him that he is naive on his use of the word "system". Method is more accurate.

 

[nine]

tradertim,

There is good diversification in the futures markets. I also perceive them as more trendy (trend vs retracement size) than stocks.

You need to be careful how many currencies you choose as they are usually against the USD so one half of the equation is the same ... oops .. lol ... and also you dont want too many interest rates as they also move somewhat in synch. Its not had to find a portfolio of 10-12 that are well diversified and have "adequate" volume.

I would comment on your request for a p&l. No one is going to give it to you for two reasons. One, the age old one, of why should they share their private info with others for no gain. But the more important one is that this is a VERY discretionary strategy if you are following the books version of LL ML SL price trading so there really is likely to be little correlation.

The book is, in my opinion, having read half of it, and having read so many trading books that Amazon was sending me free Xmas presents signed by Jeff, a good one and I wish that it was one of only about 3 I should have read 8 years ago when I started trading. The other two would be Trading in the Zone by Douglas and "Secrets of ..." by Stan Weinstein.

It would give you an approach that would work on eod or day trading. I have been looking at it on HSI on a 2 minute timeframe and it performs creditably against what I currently do (better in chop as it stays out, worse in breakaways as it doesn't get as much of the move).

FWIW of course

 

[roberk]

I .

Obviously, you have not read the book. But I would say that 99.99% of folks who read the book would see your questions about % profits etc as useless. So would Chick. It is NOT a system book.

.

I also noticed that the latest figures on Chicks new trading site are from 1999, it wouldn't take much for him to update them. If 99.99% of readers are not interested why did he put them on the site in the first place?

 

[roberk]

tradertim,



I would comment on your request for a p&l. No one is going to give it to you for two reasons. One, the age old one, of why should they share their private info with others for no gain.

The

BUT Chick did put his statements up on his site, so i guess there is someone who shares. There have been numerous members on Elitetrader who have put up statements - some very impressive too.

 

[roberk]

I wi
Edit: Deskpro ... Chick's method (or my version) can be used on very short timeframes (I trade euro on 5 minute and go down to 1 minute in very steep moves) so you can achieve acceptable stops based on price patterns.

Does Chick actaully suggest this. I had the idea from reading the book that he thought intraday movements were rather misleading and he was looking at daily trends?

 

[karmit]

yippee! got my book today

first impressions - I like the print/ layout and dimensions - kind of gives an "academic" feel to it.....

might be hibernating for a while now.....

 

[nine]

Everything I have read is about eod trading - I think you are right about his perspective. But the principles still work ... a trend line, a slow momentum line to keep you out of end of trend trades (i actually like the slow sto that buffy uses better than the macd (never liked macds much)), and a trigger.

 

[s-a]

Does Chick actaully suggest this. I had the idea from reading the book that he thought intraday movements were rather misleading and he was looking at daily trends?

Chick outlines what HE does. He doesn't trade on these short time frames so he doesn't talk about. Nothing stops you from exploring how this method could work for you.

HG

 

[TGM]

I also noticed that the latest figures on Chicks new trading site are from 1999, it wouldn't take much for him to update them. If 99.99% of readers are not interested why did he put them on the site in the first place?

The audited statements where put on his first website way back after his first book came out. Probably something to do with his publisher. By the way, the statements he originally put up, were more detailed. I believe he took them down after he did a seminar and someone called up and started harassing the accountant for info. If he were to put up statements that said he made 50 million this year and did not have a loosing month. For sure, folks would be interested and he would sell more books. However, in my opinion it would be disingenuous because you could not duplicate the results exactly. I am sure then there would be a charge of false advertising. If you are putting out a pure system. Putting out the statistics would be appropriate. But as I have stated many times ---this is not a system. However, I will tell him that if he is going to put up audited statements on his site. Maybe he should put up recent ones with complete month to month audited results or none at all. By the way, Roberk, you are welcome to call him and ask him about this.

FWIW, I was more of a day trader up until 4 years ago and moved into position trading. As Kiwi trader has stated the approach works fine intra day.