forrestang

I think the top 3 are not going to useful to take money from other traders. I know this will sound vague and unhelpful, but the most sensible thing on that list imo is, "Learn when to enter and exit the market."

This list is really eye-opening. It is wise. I can say that I really have conquered all but #7, and sometimes #5. I think I am willing to put in the work required, I feels as though sound logic is there, I understand that all responsibility for my success rests on the trader's shoulders. Seldom, even with sound logic behind a trade, I sometimes hesitate, hence #5. Also, since I have not 'mastered' the art of trading, the many bumps and bruises I have gained on my path may have led me to be skeptical on any success I may have, hence #7. Thank you for posting this.

I would be more interested in what you mean about risk/management principles. FP

There is absolutely no point in withholding anything with regards to a discretionary method (a'la Wyckoff). Discretionary methods do not have a problem with being market effecting, nor will his customers find the same trades he does. So it's not like him sharing things would have him fighting for liquidity with his customers. I doubt he is keeping anything secret related to the info on his DVDs.

When you have an opportunity, could you further explain this?

I have an EU chart for some analysis. First let me ask, is the idea to define the trend based on HHs and HLs? I am attaching a pic showing the basic trend that everyone has understood for a while. Is this how you would go about defining the trend similar to this pic. Also once you have that HH or LL, is the idea to then enter on the next pb once that trend has been defined as shown in the picture? Also, you are willing to take countertrend trades against the direction of the OVERALL trend, as long as it matches the direction of the current leg you are trading correct? Next, just attaching a picture of the EU action currently. Right now, there was a LL put in place, now we have a HH. So does that mean this current pa is just still stagnant and we need to wait for a trend to be put in place?

So when would you know? Would you consider that PPF that occurred(the major one on the right of the chart) a Prime PPF to confirm that top? Or would you need to see a LL created first?

Some observations on the primary trend for EU with regards to this thread. I think the pic is self explanatory, so post if something doesn't make sense.

I have a few questions on the way the chart is built in NT7? Say I had 1 chart open in NT7 with the indicator set put on them. The labels that are on the price..... They are the labels that would be created by the oscillations based on the ERG from the NEXT FASTER chart correct? OR..... is the erg present on the chart simply create the labels based on minor oscillations from the erg on THIS CHART, and the prime oscillations used to measure STRENGTH. By 'Strength' I mean say a prime oscillation occurs on the chart, and this places the major swing points.......that is the MAJOR trend like L-H-HL-HH? And all the PPF labels are created via the minor oscillations of this erg? I guess I am asking using the NT7 indicator, how would I set up my charts? There are 3 settings, Trend, Strength and Trading. Would I need 2 separate charts, or is all the information needed on one chart? If any of that makes sense?

Looks like a possible Trend Change to downside of current range. Again, will add or reverse if necessary. Will look to adjust stop on reaction. ----------UPDATE 8:11CST----------------------------------------------- Possible scenarios I'm watching. For EU, currently bidding on a breakdown. But could bounce off of support and complete this bull wedge or whatever this thing is with some strength to upside. Or we could just consolidate for a while. For GU, like Cory has, could break out of this channel with some vigor to upside.

Looks like my stop was violated. Currently just a tad violated. There was that support below and that OS line down there that provided a bounce. So will just be waiting for a bit. Might just have some consolidation for a while after all that movement during the end of last week. But still two pretty nice ranges so far. I'll be waiting for some movement out of it to get some action.

Currently short GU. Stop currently a bit above, if this winds up consolidating into a bull wedge though, will reverse if necessary later. But so far willing to sit through a bit of volatility. If trade continues, will add if chance arrives. --------------UPDATE 2:30CST--------------------------------------------- Still no real retracement yet, but adjusting stop to 1.6363 reducing initial risk by about half.

Current look @ G/U and E/U. Will see what develops in a bit with these two trading ranges here.

The labels that used to be there seem to be gone, but it looks like you're selling as price is making HHs? Like on that leg up at the beginning of the chart? I was under the assumption that the idea was to sell LHs and buy HLs?

Yay! Me too. I have a few questions if you or anyone else has the time. The Theory: OBJECTIVE buying and selling of HLs and LHs. As stated elsewhere the idea isn't necessarily trading trend, but trading oscillations. Overall trend is determined by the erg from the 'strength' chart, which is one fractal higher/slower than the 'trading' chart. If that erg is above zero general trend is up, so we'd be looking to buy HLs? If the erg is below zero, general trend is down, so we'd be looking to sell LHs? I guess the next line of questions would be WHEN to enter on that pullback that is occuring? The idea is to wait for a 'Prime' pullback of the HISTOGRAM on the 'trading' chart, or your MIDDLE bar interval chart. Once this occurs, the entry, is it based on an oscillation of histogram color of the MIDDLE chart, or do you look to the ENTRY chart, and look for an entry as the erg from the ENTRY chart breaks back through the prime level? The exits I am unclear of. I have read the rules, the problem it seems is the deciphering of what all that means if that makes any sense? I have attached a pic of the idea as I understand it so far. I am HIGHLY confused still.

Anyone watching this thread still around?

I have recently had my first home brewed beer. It was the best beer I have EVAAAAAR tasted!!! I am going to start doing it when I get more space.

BTW..... with the above system mentioned, there was no type of curve fitting. What I do is try to think of an idea away from the charts, when I am doing something OTHER than sitting in front of my PC. THEN I come and test that idea on a few samples, and if the logic was sound, I might start testing on a larger sample size. But again I think the key is finding those DDs in your testing, so that you can get a more realistic idea of what to expect.

I'll share! This was something I called V1.0, which was the first system I ever tried to create and automate. It was basically a trend following system that had an initial stop that was a bit large, and exits where all trails. I did this test back in December. The results were ok I suppose. Shown here are results from EVERY trade the system would call for, over a 24 hour day. This was 100% mechanical, with no discretion involved. I am unable to program it yet, but it is relatively simple. The test ran from August through the end of December, intraday trading clicked off just about 200 trades. This was tested on the spot Eur/Usd using range bar charts. Each trade regardless of stop or target size had the same amount of risk in the trade. I nominalized each trade with a risk of $10.00. So that means if I had an initial stop size of 20 pips, this would call for a size of 5 micro lots. If the initial stop was 40 pips, I would use half that. Problem with this so far as I see is just not enough data. As I mentioned above, i think trading a mechanical system is ALL about being able to deal with the DD WHEN it comes. And as you can see here, there isn't much DD to speak of. So that is a problem. You can see towards the end though, the curve started chopping about, so I really need to see how it recovers from this. I just hadn't revisited it since. I would really like to see several DD periods to see how it performs. I was also dissapointed by the typical R:R per trade. But as I mentioned above, I don't think that is what matters. Here are some details about it.

Basically, it was using the +- 2 standard deviations as the boundry of the channel. The idea, say for a long..... was to look for price to move near the bottom 1/4 of the channel, which in my case was between the -1 and -2 standard deviation bands minimum, it could go lower of course. At that point, I would draw a counter deviation from that last major high, and enter on a break of the +2 standard deviation line of this new smaller channel.

I have done quit a bit of testing with trading w/deviations. But it was all WITH trend testing that I had done. It was basically finding a channel, starting with the beginning of that channel. The idea was using 3 timeframes in which to base a trade. Big std deviation was BIAS, finding a timeframe smaller was the CounterTrend Channel, entering on a Break of that.

Thanks for looking that up. Does anyone have any experiences to share?

I think that kinda might be a pitfall of trying to find a mechanical methodology, is that people want too much profit. The idea of a 3x profit to 1x the loss (1:3) is a bit unrealistic for terms of R:R I think. I have done a lot of my own little testing, and win% is usually very proportional to R:R. I.e. raising one always lowers the other. And what I have found is equity curves with higher R:R have more DDs(drawdowns) than do smaller profits with higher win%. Also, the goal of trading mechanically would be the ability to leverage a strategy across a few markets, and SIZING being the most important aspect of it. Like running simulations with various sizing up strategies, the smoother the equity curve, the easier it is to size up. You figure you will ALWAYS go into DD with your largest amount of size, the more losses a system has looking for higher profits, the WORSE those DDs become.

Been in that stage for a few years. This topic is an interesting one. Mechanical trading is interesting, completely different equity curve of what you would expect with something more discretionary. In theory, trading Mechanically allows trading to become more about position size and growth, and managing Drawdown, and less about technique. So it's not that one is 'better' than the other, but discretionary vs. mechanical have their seperate pitfalls that have to be managed. Discretionary traders, it seems to be about technique, and being able to recognize a setup. A mechanical traders main problem would be managing the Drawdowns when they come, i.e. knowing what the anticipated Drawdown is likely to be, duration of it etc. So the point isn't that being mechanical is a grail, it's just a matter of which set of problems is one likely to be able to deal with.

Well, for a while now, my goal has been to find 'something,' ..... 'anything,' that leads to a setup with a positive expectancy, that is mechanical. The simplest example of what I mean is, say you had a MA crossover system, simply buy when one is above the other, and reverse when it flips. Something like that, where there is NO discretion, just take the signals as they come. And assume that this generates a positive expectancy over a given sample size. So say given a sample size of a few hundred trades over a varied amount of time, one would generate profits from that setup. So I was just wondering if anyone here has found such a thing?