optiontimer

It is always a good idea to identify and trade whatever is considered the front month contract, and as you noted, volume & open interest will usually signal that it is time to roll forward. -optiontimer

Well, you know, don't count your chickens 'til they're hatched. If these all gap against me on Monday, it would not be the first time in my life I had four profitable positions simultaneously stopped for a loss. But, if you don't bet, you can't win, and if you cash in too early, you can't win the big pot. -optiontimer

Here is the position summary as of today's close: Total open trade equity is $6294.78 Four trades, each currently open. -optiontimer

On what basis are you deciding to close your positions? I'm not looking to criticize you at all, but I am curious. -optiontimer

And when I say $2027 average profit per contract over twelve years, that includes a number of campaigns where my profits averaged over $30,000 per contract in a pyramided position. So, as SIUYA says, small losses and small wins, managed properly, will make sure you are in for the big wins. -optiontimer

My risk is 4 cents - too high, and if it weren't for notes doing so well, I'd have skipped the cotton. I would have rather seen cotton up around 113, but I'm trying to live by my own rules here. If stopped out, I'd like to see a rally to 113 before shorting it again. -optiontimer EDIT: Sorry, my risk is 5 cents. I still have about 4 cents before I am hanged from cotton, but the total risk is 5 cents

Here is an update - three new short positions today in Bean Oil, Cotton, and Coffee, still long ten year notes: -optiontimer

My actual win rate over the last twelve years on position trades is 65.21% with an average profit of $2027 per contract and an average loss of $1023 per contract. For every $100k in net profits, I probably stroke about $40K in losses. Most traders will not hit 65%, because most are going to fiddle with things - move stops to break even after an hour or two, close trades early because they do not like the pit hours, skip trades that go against their personal fundamental thesis, place stop losses too close, fail to pyramid, panic close on the first 50% reaction, take entries before price confirms momentum has shifted favorably, and they will not take the second signal because they have already been stopped out of that market in the last week or two, and they do not trust the system, etc. and so on. There will be losing streaks. Sometimes, of that $40K in losses, I may take $10K in a row. Many will give up in the middle of the drawdown, losing the nerve to trade through it. For those few who will patiently await the proper set-ups, and then manage the trade for maximum profit by disciplined trailing of stops, then 65% with a near 2:1 will be in reach. For the many who do everything possible to game the system, then 35% win rate and 2:1 will likely be the best they can hope for, which means they will come out of the operation with a net loss after transaction costs are factored into account. But, from those many self-saboteurs, a few more will rise to the level of discipline and patience required. Then there will be the few who manage somehow to have a win rate of about 25%, while winning 1 dollar for every 3 dollars risked. They are out there. I used the 35% win rate as a "worse case," because even over the short term, I rarley have a period where I'd do worse. Also, it is safer for those following along at home to trade their accounts as though they expect to win only one half of what they should actually win. It makes for a smoother equity curve while learning. Have you read Curtis Faith's book about his experience trading with Richard Dennis? He talks about the disparity in trading results among ten or twenty traders who were all trading the same system on the same markets. I can tell you what my results are, but that will not tell you what you can expect. -OT

Ingot, maybe you should have printed check sheets, one for long trades, and one for short trades. Then, simply plug in the requirements as posted in post #8, or re-write them as a question that requires a positive response, e.g. Has price rallied to the region of the 21/65 ema's or slightly above? If yes, then proceed to question #2: Has stochRSI registered a 100 reading on a closing basis? If yes, proceed to #3: Has stochRSI turned down and closed below 100 on a closing basis? If yes, then place a sell stop below that day's low, with a stop loss above the reaction high. If you use the check sheets, then you would not have considered the USDJPY any further after question 1. You could also add a pre-question: If you are considering a short, is the 21 ema below the 65 ema, if yes, has price retraced at least to the 21 ema, if yes, has stochRSI closed on any day at 100, if yes, has the stochRSI closed below 100 on a subsequent day, if yes ... enter on a sell stop below the low of the first day on which stochRSI closed below 100. -optiontimer

Cotton

Beanoil

PWP selected Williams%R as his short term oscillatoer, and as of today, this indicator has signalled that momentum has turned (Williams %R is plotted opposite of the manner in which we plot Stochastics and stochRSI, i.e. OB is graphed down, OS is graphed up). What matters is not the particular oscillator you select - what matters is that you use it consistently. -OT

I also would like to entreat mrcsidney, Ingot, russellhq, peterbee77, neotrader, iwshares, and anyone else who is following along and either paper or real trading this system to share their results as well. This does not require daily posting. Post your orders when they develop, and your fills, and any changes to your position. For example, in some cases due to risk factors, and in a few other cases due to the size I am already carrying in other accounts, e.g. wheat, I have thus far only taken one trade, long 10 year notes, which I am still long with the initial stop loss in place. Unless anything changes, I will simply update the position as of the weekly setle on Friday. So, this whole system requires very little time. If you are trying to apply it, take a couple of extra minutes and share your efforts here with us. I know from posts here and from PM's that a number of you have made some decent profits using the information in this thread. Remember, it all started becasue someone else gave some time and shared some hard won experience to help you. Pay it forward, friends, pay it forward. "Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you." Thank You, optiontimer

If I may "otherwise request," I would greatly appreciate it if you would continue, if you yourself have no objections to doing so. Not forever, but perhaps you could continue through the rest of this month. I can tell you from my PM box, which, I see a warning flashing to me that it is 92% full, that your example has helped a number of others wade into the deep end of the pool. I am hoping to persuade at least a few of them to follow your example by posting here in the thread. As far as further direction, I will answer any questions to which I feel I have a worthy answer. I am very pleased with how this thread has worked out. I think I have given enough here for anyone who happens by this thread and who does the reading and studying to set himself or herself on the right path. The difficult part, as always, is for the individual trader to work on the emotional control, the discipline, and the patience required to succeed. For that, I can do little more than offer pep talks. I'm willing to do that as well, if that is one someone asks for. So, PWP, if you feel this thread and what I have shared has helped you, then I am going to ask you, for the month of August, to help me to help others. I believe the phrase is known as "paying it forward." And I don't want anything more than to see a few others do as well as you have been able to do. Thank you kindly for sharing as much as you have. No matter what you decide, it has been a pleasure for me to have witnessed that part of your efforts that you have shared here with us. Sincerely, optiontimer

Kroll tells a story about a trader who called him one day asking what he thought about the head and shoulders top in Cotton. Cotton was in a strong uptrend, without a hint of slowing down, and Kroll was confused by the question. Turns out the trader was aking him about a "head and shoulders top" visible on a 5 minute chart. A mere consolidation, Krol told him, and right he was, as Cotton closed at all time highs by the end of that session. Just goes to show the perils of mixing time frames. -OT

Luv ur stuph! -optiontimer

Do you feel you fulfilled your promise?

I buy dips in uptrends and sell rallies in downtrends. I assume the major trend will continue until it doesn't. If this were day trading, my answer would have been different. -OT

The credit is all yours. Congrats! optiontimer

I mean no disrespect towards you, phantom, but this is what I was talking about in my thread: how about a screen shot of today's trade in the euro currency at the point of inception? No need for you to do so, of course. I merely wish to point out an important difference between a thread where the psychological issues related to trading are central as they are being experienced in the present moment by its participants, as oppossed to a thread such as yours, which is more like reading a newspaper. Good trading to you, phantom, and again, this is not meant as a challenge or a criticism. I am merely making plain the difference I see between what I am doing and what you are doing. And I remind yo that you raised the issue to me in my thread first. Otherwise, I'd have never have responded to you here. And of course, you may disagree with me, and that is fine with me. -OT

I have no desire to allow this thread to turn into page after page of trash talk like so many other threads do. I will respond to this point here just this once. If you or anyone else wishes to continue this discussion, then you are free to start a new and separate thread devoted to this topic. This will be my final response to this here: There is no psychological pressure to discussing a dead & static chart with no money or no ego on the line, so very few discussions here at Traderslaboratory or at any trading forum would even know a "psych dept" existed. From what I have seen, other than this thread and thalestrader's Reading Charts in Real Time thread, there have been less than a handful of threads where the participants make any attempt to show their hand in real time and before the market has already moved "according to their analysis." So, no, using my reasoning, very, very, very, very few discussions at trading forums ever even have a hint that there is something human about trading. There is no psycholgical pressure, no ego at stake, if one is simply posting after the fact charts and saying, "see here the blah blah blah was waxing while the yada yada yada was waning. An easy trade to spot and makea ton of ca$h." Now, if instead the poster were to post a chart and say, "see here the blah blah blah is waxing while the yada yada yada is waning, I am therefore going short at $x, with a stop loss at $x+y, and a take profit order at $x-y," well, now that poster has, at the very least, the ego pressure of having made a puclic call, and thus has risked being "wrong" in the eys of his readers. And if he has actually traded it, he has the addition psychological pressure that most of us mortal feel when real money is on the line. So, no, using my reasoning, very, very, very few discussions are even aware of the existence of the psych department, because very very very few posters are willing publically to risk his ego by posting a potentially losing trade. This one belongs right where it is because its explicit purpose is to provide a specific and easily understandable and replicable system which is meant to help actual people, if they so choose, place actual trades, with the hope or earning actual profits, or at least to prevent them from losing their actual shirts while working on the actual and real psychological and emotional pressure which, in my opinion, is the primary cause of trading failure. -optiontimer

Awesome! I also see the EUR/CAD as well. I had been expecting a long campaign to develop in the Dow or S&P, but more and more this has the look and feel of a new Bear market rather than a consolidation in an ongoing Bull. I'll have to keep an open mind and take what the market decides to give me. Time to update my charts - I'll post any trades I come up with. Great trading, PWP ... keep in mind that the profits you have built up on those two trades likely would have taken 12-18 months in Kroll's time to see a move of that extent. Enjoy the volatility while it lasts! -optiontimer

So, a question for the cash market forex traders among us: Was today the day of "The Great Shakeout"? Or did any of you manage to hang in there for some great favorable moves? -optiontimer

I presume that this is how all the world except for foreign exchange bucket shops bundle the data. Ingot, my suggestion is that if you are going to continue with your current bucket shop, then trade as you have been trading. However, you should keep records to indicate whether a trade that you have taken would have been triggered had Sunday & Monday's PA been bundled together as one, and track whether there is an adverse effect on your P/L by treating a few Sunday hours as a separate day of trading. Also, many of my currency futures trades are filled at or near the Globex open on Sunday night, EDT/EST. So I am not suggesting that one not trade Sunday. However, my decision to do so is based upon Sundays's trading compared to Friday, not a few hours of Sunday artificially separated from "Monday." And do not forget to think of this: while you were looking at a "completed" Sunday bar, those on NY and London time were still watching ticks accumulate to their Sunday bars. FWIW, Interactivebrokers does not print a separate Sunday bar. FWIW v. 2, a few weeks ago, I had some difficulty with the MT4 version of stochRSI. From what I have been able to detrmine, my difficulties arose from the fact that Oanda prints a separate SUnday bar, rather than simply plotting one bar Sunday/Monday with the cumulative trade data from that period. FWIW v. 3, my understanding of the foreign exchange world is that Institutional traders, no matter which money center they call home, all consider the forex day to be NY 5PM Eastern close to NY 5 PM Eastern close. Since those are the traders who move the market and create the trends we hope to profit by, it seems beneficial to align our data with theirs. -OT

Well, if we were following Kroll strictly, once open profits equal initial margin requirement, we'd move the stop to breakeven. I would prefer to wait until the 65 ema is at a level above our entry. Each individual will ultimately have to choose how he or she will take profits. I have a colleague who is essentially a day trader whose trades last 1-3 days. He enters based upon situations similar to what we are looking at here, i.e. based upon price action viewed through the lens of daily bar price action. He sets a bracket order to take half of his position off at something like 100 pips and the second half at something like 300 pips. He moves his stop to break even if his first profit target is filled. I happen to prefer letting the trade roll and seeif I don't catch a real running profit. Very often, I am adding to my position when he is taking another trade, which he will be out of with his profits while I am awaiting a thrid opportunity to add. Which of us is right? We both are. He trades as he wishes to trade, and I trade as I wish to trade. We have a similar P/L profile over time, as he trades much larger size on each trade, while I tend to achieve larger average profits/trade (over time). He cannot cope with allowing a $1400/contract profit run to a $900 loss. I would much rather have that happen, than allow myself to get stopped at break even only to watch what had been a $1400 profit run to a $14000 profit without me. So, everyone following along with us here will eventually have to design his application of this system to his own threshold of pain, so to speak. I would like, during the course of this thread, to focus as much as possible on allowing trades to run their course. I think we have already seen that cutting trades short is a common problem. I am open to suggestions, as always. And I urge everyone here following along on their own, whether on paper or real money to share his or her experiences with our little system. -OT