optiontimer

Coffee is now a short set up based upon our system. The 21 EMA < 65 EMA, stochasticRSI has turned down from yesterday's 100 reading. Entry would be on a sell stop below today's low. Stop loss would be above yesterday's high or a close above the 65 EMA.

Japanese Yen is currently an active long based on our system. Stop loss would either be below the 6/28 low or a close below the 65 EMA.

Gold had triggered a long based on our system earlier this week. With today's price action, any reasonable approach to trade management would have you out with a loss. Gold is still long-biased (21 EMA > 65 EMA) and it is now oversold on a closing basis, so we will be watching to see if the oscillator turns up, triggering an entry order.

This week is a base building week for this project. I want to put together a summary of the markets and their position relative to this system. And I want to post some charts illustrating how the system is to be applied. In effect, the market has been here forever, and we were born yesterday. We need to get into the flow of these markets as they relate to our system. The trades will develop soon enough, but for now we are simply building the foundation. I will post a few charts tonight. This weekend is a long weekend, and I should have time to get a chart of each market posted, along with a brief summary of where that market stands currently in relation to this system. After that, I will simply update the thread each night with any relevant price action that leads our indicators to produce actionable set ups. Thank you for your patience, -optiontimer Today, the now defunct traderslaboratory forex contest for June ends. Here is a chart of the GBPCHF. In both May and June, I took short trades in this pair for the purpose of the forex contest. While I was not using these particular indicators, this system would have had us act in the same manner as I did in the contest. It only takes a few trades each month to do very well. The difficult part is waiting for the proper set-ups: Here is the Aussie Dollar futures, which was shown here last night. This would be a long trade signaled two days ago, and the arket has continued to develop favorably: It occurs to me now that it might help if I were to mark entry and stop loss levels n the chart. Maybe I should adopt thalestrader's blue/red line method from the Reading Charts in Real Time thread. Crude is currently a short, and here it is now overbought, so the next actionable event should be a potential short entry: Here is the 6E EURUSD futures and the US Dollar Index Futures - 6E has given two long entry signals recently. As one would expect from such action, the US Dollar Index is a short, and it has given several short entry signals in recent days and weeks: And the final chart for tonight it Gold, which is on a long signal from earlier this week: I do not have time to post it, but Yen futures triggered a long entry this morning. I will have each market with an updated chart and comments related to this system over the weekend. Thank you, -optiontimer

Ingot, Go back and re-read the explanation of our system: In your example, the stochasticRSI can only give long entry signals on oversold readings. This is because when the 21 EMA is above the 65 EMA, only oversold readings are relevant. In an uptrend, we expect the short term indicator to get periodically oversold - that is our sign that it is time to get ready to enter new longs or add to current longs. The process of getting oversold is not a signal to exit your long. So no, it is not a "false signal," because it is not a signal at all. Remember, we want to be positioned in the direction of the 21/65 alignment. We want to be entering positions against the direction of the short term oscillator. We want to trade with the Major Trend (21/65 EMA) and against the Minor Trend (7stochasticRSI). -optiontimer

I only consider moves to 0/100 for the purpose of this system. I thought the charts were fairly easy to see. Do you have any suggestions for what I could do to make them more clear? The stochasticRSI must turn up from overbought or down from oversold on a closing basis to trigger the set-up. Price must make a higher high or lower low than the set-up day to trigger entry. Stop bracket is for both entry and stop loss. 10 ticks is current general rule I use for currency futures, though support and resistance levels will always dictate the actual parameters for a specific trade. If I were day trading currency futures I would probably use a 1-2 tick stop bracket. I do consider volatility and range when determining the particular bracket I will use, though I admit that I "eyeball" it rather than use a formal calculation. Some markets I use a few as one tick for my stops, others I may use more than 10. You can use a volatility stop. The 21 EMA was suggested by another traderslaboratory member, mrcsidney. I picked the 65 because I wanted the longer term ema to be approx 3X's the shorter, and I know that the 65 ema is popular. The traderslaboratory community selected RSI as the short term indicator in a poll. I felt that the RSI did not give as visually clear a response to price action as I was hoping to illustrate, so I selected the stochastic of RSI as a substitute. The selection of indicators was basically meant to be random. The strategy I am trying to show requires no specific indicator(s), and in fact, with experience, one can learn to trade this way without the use of the indicators. The strategy is simple: identify an ongoing trend, and then position yourself in the direction of that trend after short term reactions against the main trend have occurred. We want to use the indicators to confirm or to clarify what we see price doing. To paraphrase Stanley Kroll, we want to trade with the Major trend (as indicated by the EMA's) and against the minor trend (as indicated by the oscillator). Thank you for sharing your code with those without access to the stochasticRSI. I had assumed, incorrectly, that it is common enough to be part of any mainstream charting package. Thank you your participation. I hope you continue along with me. -optiontimer

Aussie Dollar 6/27/2011: When the 21 EMA is above the 65 EMA, we do not want to be short, and we may be looking for a long entry signal. Only oversold readings of the stochRSI are relevant, and they are relevant if and only if price has retraced back to a level between the EMA's or even slightly below. Aussie Dollar 6/28/2011: A long entry is signaled when stochRSI has turned up on a closing basis, Aussie Dollar 6/29/2011: and entry is made the next day if price makes a higher high than the prior day I like to use 10 ticks as the buffer on these type of currency futures trades - so entry buy stop at 1.0447 and stop loss at 1.0271. This would have been a $2200 risk. But a reasonable objective would be a retest of the 1.0815 high, for a $4400 reward. It is a tough call when trading a small account. We have to be patient. These markets do offer more favorable reward to risk ratios (relative to our starting equity). It is just a matter of waiting for them. -optiontimer

Some Charts, with More to Follow Following this system, crude has been short since 6/13/2011. It is now overbought again, so a possible new short entry signal may be forthcoming. With crude's large daily ranges, it is unlikely that such a signal wold be accompanied by an acceptable risk. Gold would be a new long today, though the stop would have required a $1900 risk, which is higher than the $961 that I am thinking would be appropriate for this account and this system. There will be more on money management soon. The Dow would have gotten us short on 6/23/2011, and we'd have been stopped out today for an approximate $850 loss. The Dow is now overbought again, so a new short signal is possible. Price action is suggesting that a new rally is getting underway, so it is possible that the next signal will be a long. -optiontimer

In options trading time, and timing, is everything, and fundamentals have little to nothing to do with it. I understand what you are trying to do, and I hope you do well with your strategy. I still do not believe that you appreciate the reward to risk ratio with which you are playing. I look forward to following your journal, and I again, I do hope that you do very, very well. -optiontimer

Of course, but he sold it for $0.90, which means he collected $90 less commissions and fees. If the stock declines to $49, how much will it cost him to buy it back? Even on opex he'll pay a dime above intrinsic, plus commission and fees, or $110 + costs. How much will he pay if the stock is at $48? $45? $30? The risk, even on a "safe" company like ABT, is very real. ABT traded as high as $57.36 the week ending 2/13/09. During the week ending 3/13/09, ABT traded as low as $44.10. Had he sold the April $55 for $0.90, he'd have either been buying the stock for $55 while it was $11 lower at the market, or he'd have bought back his $90 put for a cool $1100. That's risk! I know one trader who had sold AMSC April 22.50 puts for $1.25, and with two weeks to expiration the stock closed just below $25. The next day it opened at $13. He hoped the sell-off was over done, and by the time the margin clerk came a calling, he was forced to close them at $11. So he sold them and "collected" $125 less commissions and fees. He bought them back paying $1100, plus commissions and fees. The stock is now $8.62. As SIUYA said, when it comes to being short options, "often people underestimate the risks of selling them." I wish him good luck with his trading, but I think he could benefit from another perspective. -OT

Here is a daily perpetual contract chart of Cotton with the indicators that we selected for our trading system. The Red moving average is the 21 EMA The Black moving average is the 65 EMA The oscillator in the subpane is the 7 period stochasticRSI Here is our system. I would think it should need very little tweaking. I have tried to make it easy and clear to follow. Please, if you have questions, and if anything seems unclear to you, let me know here. As I said in the previous poll threads, I have two goals with this project - 1) Not to lose too much, and 2) to keep it simple, very, very simple. When the 21 EMA is above the 65 EMA, we do not want to be short, and we may be looking for a long entry signal. Only oversold readings of the stochRSI are relevant, and they are relevant if and only if price has retraced back to a level between the EMA's or even slightly below. A long entry is signaled when stochRSI has turned up on a closing basis, and entry is made the next day if price makes a higher high than the prior day. When the 21 EMA is below the 65 EMA, we do not want to be long, and we may be looking for a short entry. Only overbought readings of the stochRSI are relevant, and they are relevant if and only if price has retraced back to a level between the EMA's or even slightly above. A short entry is signaled when stochRSI has turned down on a closing basis, and entry is made the next day if price makes a lower low than the prior day. Here is the same chart, and I have boxed the relevant areas. It may be a good idea for you following along to study this chart and also to apply these indicators to your own chart of a market that you trade or in which you are interested in trading and see if you can identify the signals as they occur on your own. Anyone is welcome to post charts and trades to this thread so long as they are using this system for the purpose of those posts. I will post some more charts myself in the coming hours and days. I am open to comments & questions at anytime. Thank You, -optiontimer

Here is the list of futures that I will be trading as this project progresses. As starting capital is modest, and with little room for error, it will not be possible to take every signal in every commodity/future. Money management and risk assessment will play a large role in determining which trades to take and which to pass. I will have more to say on money management as it relates to this project in an upcoming post. Here is the list: Some of these symbols may not be familiar to all, so I will translate, in order of appearance: Australian Dollar Bean Oil British Pound Corn Cocoa Canadian Dollar Crude Oil Cotton EuroFX Dollar Index ES e-mini Feeder Cattle Gold Copper Heating Oil Japanese Yen Coffee Live Cattle Lean Hogs NQ e-mini Oats Orange Juice Soybeans Sugar Swiss Franc Silver Soybean Meal Ten Year Note 30 Year Bond Wheat YM e-mini Given the small size of the account, it is safe to say that three to four contracts total would be the limit of the current equity. These three to four may be one contract each of three or four markets, or three or four contracts in the same market. While exchange and brokers minimum margins are a guide, given current volatility, I think that $6000-$8000 dollars or the exchange minimum margin, whichever is higher ought to underlie any futures contract. Some of these markets, e.g. silver, cocoa, will be watched, but unless and until equity reaches $50,000, these markets will likely not be traded with this account. I think the selected list should have something for everyone as it includes at least one future from the main groups - Forex, Interest Rates, Energy, Metals, and Stock Index futures, as well as some standard old-time commodity futures from the meats, grains, and softs. If there is any futures market that I have not listed here that someone would like to have me follow (I'll make no commitment to trade it, however), please send me a PM with your request, and I'll let you know if I will include it or not. Thank You, -optiontimer

Unless the stock declines to $45, and it is put to you at $50 - then you will be paying an 9.1% premium, and that doesn't take into account commissions and fees. Its a matter of perspective. Good luck with your trading. -optiontimer

The new thread may be found here: http://www.traderslaboratory.com/forums/trading-psychology/10158-optiontimers-project.html#post121784 More material to follow in the coming hours or days - I want to have a good foundation for us to build upon. Thank you, optiontimer

Optiontimer’s Project: Using Trend, Momentum, & Timing with Strategy, Patience, & Discipline to Trade Well What prompted me to start this project was a series of private messages sent to me by another traderslaboratory forum member. Here, in part, is what he said to me: "Optiontimer, I am not a good trader. I have good setups, and can make money for awhile, but I don't handle all conditions too well…I have many times thought of getting out of trading altogether, because it was not supposed to be like this. I was supposed to learn how to trade…I have been doing this for 7 years now. It is not coming together…Is there anything I can do to improve the way I am trading? I am unsure if it is strategy or choice of market, or the execution of my trades that is the problem. I have tried to trade using Price Action alone, and I have tried to trade using other people's systems. I have also used indicators like MACD, Stochastic, Ehlers Fisher Transform and Inverse Fisher Transform - all designed to get the turning point of trends earlier…Where should I be looking and researching? What are you doing that is different from myself? How am I defeating myself? I know I can do this - else I would have ditched the whole scene after a couple of years. But something is still eluding me, and I don't want to die without finding out what it is." - Traderslaboratory forum member, and in my opinion, a good guy Do you recognize in his words your own experience, either past or present? I do. And having gone through it yourself, could you ignore such an honest plea for help? I couldn’t. And a quick glance at some of the recent threads here at traderslaboratory and elsewhere, show that he and you and I are not alone in these feelings and experiences. In fact, during the course of the above exchange, I had noticed an uptick in threads whose theme is essentially, “What am I doing wrong? How can I have spent this much time, effort, money, sweat, and tears, my whole soul, in fact, on learning to trade, and still I fail, falling far short of my goals?” I remember very well having felt this same way for a long period of my life. Even today, after years of generally successful trading, I still manage, to my ongoing chagrin, to defeat myself on occasion. But in spite of these brief defeats, I think I can nonetheless be of some help to this fellow traderslaboratory member in need, and perhaps a few others also. This project will be my attempt to answer the important questions posed by our fellow struggling forum member: “Where should I be looking and researching? What are you doing that is different from myself? How am I defeating myself?” Toward that end, I am going to construct and trade a trading system that I will use to trade futures. The system is meant to address what I believe to be the key mechanical issue of trading – that of Timing, and it will do so by defining both the long-term Trend and identifying the potential end of short term reactions against that Trend using waning adverse Momentum in order to Time entries and exits. I will start with a limited but reasonable equity of approximately $25,000. As the importance of capital cannot be stressed enough, I will treat this account as though I am a new trader just starting out and wishing to grow his capital. Therefore, in addition to what I hope to be the accrual of trading profits, I will also, from time to time, add small amounts as savings from current income in order to help grow this seed money. In other words, I will manage this account as I would suggest that you manage your own trading account if you are starting fresh with a limited capital. I will trade this account according to what I hope proves to be a well-defined, easily understood, repeatable strategy, and my hope is that neither my discipline nor my patience fail me during the course of this project. This project will be informed and inspired by the teachings of futures trader Stanley Kroll. In his book, Futures Trading Strategy, Kroll wrote that [t]raders who stress accuracy of trade timing, both entry and exit, can start with as little as $15,000 or $20,000. This modest opening equity leaves very little room for error. Nevertheless, the market has always functioned as the great equalizer of wealth, rewarding the patient, disciplined, and able players while punishing the careless and inept ones, regardless of their starting capital. It is possible to rack up a consistent and impressive score from modest starting capital, to which I can attest from personal experience. The annals of finance are replete with true to life stories of powerful and wealthy accumulations that began from small but talented operations in the futures markets (Kroll, Stanley, Futures Trading Strategy, p. 19). So it is with “very little room for error” that I will attempt “to rack up a consistent” score from my “modest starting capital.” At the very least, I hope not to go to ruin. How shall I avoid ruin? Well, there is no way really to ruin-proof your trading other than to stop trading. But I do wish to minimize this risk. As Kroll teaches, “[a] technical approach to commodity investment, coupled with sound money management and a focus on trend following … are really the best ways to operate” (Futures Trading Strategy, p. 21, emphasis in the original). Money management will be addressed shortly. For now, I want to focus on the topic of Timing. My trading breakthrough (perhaps one of several breakthroughs) came when I realized that the key to my being able not to defeat myself laid in my ability to time my trades so as to avoid taking too much initial heat on my winning positions while allowing me a reasonably close, technically correct stopping point for cutting my losing positions. Kroll, in responding to the question, “Why do so many traders lose?” answered that it “is primarily a consequence of inept tactics and timing, rather than a plot by “them” to get you (and me) out of the market with big losses (Kroll, Futures Trading Strategy, p. 22). That is, it is our poor timing, and it is our poor tactics that result in our trading losses. It is not that there is some other trader, a black knight in terrible armor, waiting to strike our equity from our accounts, plundering our meager capital. If you wish not to lose, first take responsibility for your losses. Kroll notes the oft-repeated trader’s lament that “I watch while the market moves in the direction of my analysis … [but] when I take the position, prices abruptly reverse and careen in the opposite direction” (ibid). I am sure I am not the only one here who has taken a position at one time or another only to watch the market turn tail on me. “Look at what they are doing to me!” “They,” indeed! “In fact,” Kroll goes on, “the accumulation of ineptly timed buy or sell orders by under margined speculators … are what makes tops and bottoms … The result of such careless and poorly timed trading is predictable – big losses and small profits, with an overall tendency to red ink” (Kroll, Futures Trading Strategy, p. 23). I will cover the exact timing mechanism I will use in the next section. While I will be using this system to trade futures, I welcome participation by any members of traderslaboratory who wish to trade their own chosen instruments using this system as well to post trades, charts, questions, and comments. Your trades can be real money or paper. I only ask, that for the purpose of this project, you only post charts and trades that you believe you are taking in accordance with the system as I lay it out. This is not because I believe that my way is the best way or the only way - far from it! I ask that we limit this discussion to trade and market analysis in accordance with the system I will be using here because, as Kroll also points out, a good technical system is just half of what we need. The other half is the Discipline to follow that system and the Patience to stick with it and out to stick with our winning positions. I want this project to be comprehensive in its scope – and this requires consistency and clarity throughout. This discipline and patience is a requirement regardless of the system you trade. As Kroll teaches us, You [must] stick to your objective analysis and market projection based on whichever method or technique has proven itself viable to you, and you revise that strategy only on the basis of pragmatic and objective technical evidence. Such evidence could be a signal from your charts, from your computer system, or from your friend the margin clerk, who reminds you that you your position has moved adversely and your account has become under margined (Kroll, Futures Trading Strategy, p. 23 – emphasis added by optiontimer). So we will stick to the system that I will be laying out shortly. That system is composed of indicators that were selected by public polls here at traderslaboratory.com. The long term trend of any market will be determined by the relation of the 21 EMA to the 65 EMA. Our short term timing mechanism with be the RSI, or rather, the stochasticRSI, which is simply an application of the stochastic formula to RSI measurements. I will be using the 7 period stochasticRSI. Once our timing mechanism has identified a potential opportunity, price action will either pull us into a position or not. The full details, as well as a discussion of money management, will follow. For now, I wish to leave this project’s beginnings with the following thought. Douglas A. MacIntyre, former publisher of Financial World Magazine, wrote of Stanley Kroll that when you meet Stanley Kroll, you are immediately impressed by how little this expert on commodities claims to know. This is one of the greatest strengths of most real experts. They do not get overly confident and pretend omniscience. Better constantly to assume that you don’t know enough and investigate your assumptions and numbers (from McIntyre’s forward to Futures Trading Strategy, p. viii). I hope that I never come across as an over-confident, omniscient know-it-all. If I have any pride in myself at all, it is that I tend toward humility – which, as a trader, is good, as the market is a great humiliator! I welcome participation here in this project. In fact, I hardly think this project will go very far or for very long without active participation by forum members other than myself. But let us all participate in the spirit of Kroll, and assume we do not know all, and that we may learn something new and valuable, even from the newest and least successful trader among us. Thank You, Optiontimer PS Once I get all the initial ruminations and details posted in this thread, I will edit and compile them in a single pdf file. I will then ask the moderator to insert that file to this initial post so that anyone who wishes to have a “carry along” hard copy to mark up, question, and take notes on can do so. In the meanwhile, I will use this larger font for any "project foundation" type of material, to make it easier to find and identify, while I will of course use normal traderslaboratory font for the more typical, day to day type of posts. UPDATE: Link: Kroll On Futures Trading Strategy Book Bonus: other goodies from the Reading Charts thread (after window opens search for ".pdf")

I am not able to access the computer with CSI UA tonight, so the charts I will be posting as this project gets underway will look a bit different from this one. But I wanted to get this posted now so that any who are interested in following along can get themselves accustomed to the indicators I'll be using. The attached chart is a freebie you can use at Barchart.com - Commodity, stock and forex; quotes, charts & analysis. I will be using the 21 EMA, the 65 EMA, and, for now, a 7 period stochasticRSI. The chart looks like this: I have decided that I will trade futures in this account. I will finalize the trading portfolio over the coming days. At this time, I will confirm that the eligible instruments will include US stock index futures (the e-mini's), forex futures (EURUSD, AUDUSD, GBPUSD, and JPYUSD), and the 30 year bond and 10 year note. I will likely include several grains, softs, and meats as well. I still have not decided whether to include energy futures. Once the trading portfolio is finalized, and I confirm with IB the account is ready for trading, I will start the trading thread. I believe if you register at Barchart.com - Commodity, stock and forex; quotes, charts & analysis for free, that you can store your own "chart book" and save the a chart template matching the above chart. This would allow you to follow along on your own without having to rely solely on me and what I decide to post or not post. Also, since Barchart.com - Commodity, stock and forex; quotes, charts & analysis is free, there is no need to subscribe to CSI UA (keep your costs low right now so you can put the $$'s into your trading account rather than someone else's pockets). I will play with it tomorrow myself to see if it can be done there for free. If anyone already knows the answer, let us know here. Thank You, optiontimer

I was poking around traderslaboratory.com and I found that a pdf file of Kroll's bok was posted here by thalestrader in the Reading Charts thread. You can download it by clicking on his quote which I am pasting below. -OT

One of my favorite trading books is Futures Trading Strategy by Stanley Kroll. It is out of print, but available used and on the cheap at Amazon and occasionally at ebay. I will be relying on it heavily, implicitly if not explicitly, as this project moves forward. Whether you are going to be following along or not, if you are not where you want to be as a trader, you might find this book worth s good read - or two or three or four. On a side note, I mentioned that I would likely be using stochasticRSI (a stochastic of RSI) rather than RSI itself. Stanley Kroll, along with Tushar Chande, developed and wrote about the stochasticRSI in their collaborative effort The New Technical Trader. Thank you, -optiontimer

Sure thing ... thanks for that suggestion, -optiontimer

I was speaking strictly about a charting, and not atrading platform. I will be trading real dough in an Interactivebrokers account using TWS, so for me the trading platform is settled. Those playing along at home are free to paper trade or trade real dough at the broker of his/her choice. Right now, I have more or less decided to use TC2000 if I decide to trade stocks.stock options, and CSI Data if I decide to trade futures/forex. TC200 is $29.99/month and is available from worden.com with a 14 day free trial. CSI Data's unfair advantage is $36.54/month + $60 one time license, and you can find out more about it at CSI Market Data (Commodity Systems Inc.). They have a "trial offer" that gives you one year of historical data with daily updates for $20. Both also offer a decent discount if you pay up for a year in advance. I subscribe to both. For CSI Data, I pay $500/year for full history. I will be posting screen captures of my own charts in the trading thread once I start it, so no one needs either of these to follow along with what I am doing. Your own charting package is likely fine, so don't run out spending money that could be deposited in your trading account instead. Thank You, -optiontimer

Here is a brief status update on our project: 1) The MA's we will be using to determine the overall, aka long-term trend will be the 21EMA (per mrcsidney's suggestion) and the 65 EMA. 2) I have a problem with the RSI indicator. I want this system to be very easy, clear, and unambiguous. I have been unable to come up with a consistently responsive and clear parameter using RSI. I will continue to do so, but I am also now considering substituting stochasticRSI for RSI (so we will still be based upon RSI, as the community selected, but we will be using (Yikes!) and indicator of an indicator. This may allow me to achieve the clear unambiguity I am seeking while also, potentially, satisfying the desire of some for a more "exotic" indicator. 3) Also, I have yet to decide what will constitute the universe of trading instruments. That will depend, in part, on what charting program I decide to use. I would like to use something that is low-cost, perhaps even free, because in addition to putting together an easy to read system, I also want to demonstrate that you do not need to spend hundreds on data and charting software each month in order to participate in these markets. 4) Finally, I have set up a dedicated account at IB to trade for the purpose of our project, and I have transferred 25020.00USD as starting capital. I received a message from IB this weekend that for some reason the account will be permitted for trading on the 27th of June (a week from tomorrow). I am not sure why the delay, but that is fine, as we are nowhere near ready to place out first trade. I hope to have the main logistical details settled by the end of this week, i.e. the specific RSI or stochasticRSI parameter, the instruments we will trade, and the charting software/platform that we will use. At that time, I will post a screen capture of the chart we will be using, and I will ask the moderator to close this thread, so that the project itself may proceed from a "clean slate." For now, we will keep this thread open, and any communication concerning the project can be made here. Thank You, -optiontimer

Ok, my fellow traderslaboratorians, we now have the two indicator components of our trading system. We will be using two MA's, one short, one long, to determine the overall trend. As we had one individual respond to my request for MA suggestions, I felt it only right to give it the green light. It is the 21 EMA, and for my purposes, it is a suitable short term MA. I will select the longer MA. We will also be using the RSI as out indicator for determining short term momentum, aka overbought/oversold. I will select the RSI interval. I will post a chart of something this weekend once I have selected the remaining indicator parameters in order to display the indicators we will be using to construct our system. Once I post that chart here, I will ask the moderators to close this thread, and I will start the thread where we will "get down to brass tacks" as they say. Thank You, and Happy Father's Day to all the dads among us! -OT

Ok, mrcsidney, since you were the one lone soul to suggest an MA, I'll use it. I'll use the 21 ema as the shorter ema, and I will choose the longer term MA myself. As you are a first time poster here at traderslaboratory.com, please give us some indication (perhaps your second post) that you are indeed following along with us. Thank You, -OT

Max, I hear you, and I feel that you and I would agree on most of the important things. I would like, however, to suggest the following - let us, for the purpose of this project, assume that the problem with indicators is not that they show us what is already visible on the charts, and rather consider that the problem is not indicators at all. Let us consider the problem at hand to be "how does one learn to see the visible?" You and I, Max, can look at a naked chart, and we can see the major trend, the minor trend, and quickly determine whether we want to be long, or short, or flat. But how did that happen? How did we come to be so? And how do we help others get there? This project is not about this or that indicator, nor is it meant as a debate between indicators-based traders versus price-action based traders. My purpose here is to discover a means or mechanism that will allow the one succeeding to help the one struggling to see what is already visible on the charts. I hope you continue to help us as we move forward with this project. Thank You, -OT

I am very much in agreement with you SIUYA, and I thank you for your excellent contributions thus far in support of the project. I hope you continue to help us along. As to the trend following/momentum distinction, I would suggest that it might help some here to think of it this way: Liken "trend following" to what is commonly referred to as "position trading," and liken a momentum strategy to what is commonly referred to as "swing trading." I will attempt to develop and demonstrate a system that can be successfuly traded as either. Hence "Trend & Momentum," and the need for both a short term momentum-type indicator and a longer term trend-determining type indicator. But, as you said, "regardless of indicator"... Thank you, -OT