russellhq

OT, earlier in this thread, you said for longer term trading you expected 2 in 3 trades to be losers. For the one winner, what would you expect the average win to be compared to the initial risk. e.g. You've set the initial risk at $600 (IIRC) per trade, what would be the average profit of the winning trade to be ($1200 is break even)?

I just completed the following trade today: 29/07/11 Oats September Future (ZOU11) sell 1 unit @ 348.50 04/08/11 Oats September Future (ZOU11) buy 1 unit @ 336.00 Profit 50 Pips MAE 5 Pips (I believe it's important to highlight MAE as this illustrates the risk taken) Risk 46 Pips ($575) Finally, the reason I closed this trade was because of the low volume in the market. I was not comfortable with the wide spreads and not being able to close when I wanted (this was only the 4th ever trade I've made i my life!).

I've attached my entry for today which makes my 3rd open position (it's been a quiet week) I've annotated the chart with a number of points which illustrate my entry. First, I looked for Price Action near the 21EMA. Confirmed. Next, looked for the 7sRSI turning down from 1 to give signal to enter the next day. Confirmed Next, I looked for the nearest significant high and measured the Risk, risk was acceptable. Today, following yesterdays signal, I looked for price falling below yesterday's low. Confirmed. Following all the confirmations above, I sold at 56.30

At what point would you consider moving the stop to our entry price? Or is that something you are not considering for this strategy? P.S. No set-ups from me this weekend. But the following look like they could signal tomorrow for entry Tuesday: Canadian Dollar ($1000ish ATR10 range) Euro FX ($2100ish ATR10 range) Heating Oil ($2300ish ATR10 range) E-mini Nasdaq ($900ish ATR10 range)

I have the 10yr Note trade open, would it be possible to describe the exit strategy for this trade?

Looks like the 10 Year note is starting to move! Getting close to the 1 year high back on July 12th.

Barchart.com appears off the mark with Wheat but Oats is showing a signal today. Although with Oat's High high of yesterday, our stop would put the risk up in the $2000 territory.

Reviewing the charts tonight (UK time), Live Cattle shows the EMA lines to be very close but still appears to be a signal: 21EMA < 61EMA, 7sRSI has turned down and the price is between the ema's. Thoughts?

Hi optiontimer, would it be possible to annotate a couple of your charts to show the major and minor trends thus showing how the strategy mantra "Trade with the major trend and against the minor trend" is being followed? As for trading, I'm waiting to get filled on 2 orders (demo account): buy 1 contract @ 126-00 on the ZB buy 1 contract @ 124-130 on the ZN (though I think this may have been filled by now) Stop loss for both contracts is Friday's low minus 0.1ATR10

I find barcharts to be quite a good set-up for quickly reviewing a lot of charts. For instance, I've created a group of charts with all the futures OT had picked out at the start. I then set up a template to add 21EMA, 65EMA & 7sRSI indicators/oscillator. So now when I want to review the charts in the evening, I select the flipchart for the group, apply the template and then it's one mouse click from there on to get to the next chart with all the indicators displayed the way I find it easy to read. This lets me quickly review the charts in a matter of minutes. The signals do seem to be broadly in line with what OT has posted in the past. Maybe OT can post a signalling end of day chart and I'll post the corresponding barchart version.

Looks like the 10-Year T-Note will be tradeable today (depending on price action) given Fridays signal. And if i've calculated it right, the risk (Fridays Low minus 0.1ATR10) should be within the comfort zone too.

As we're discussing risk, stop loss and break even points, I'd like to ask your thoughts about "break even". Previously OT mentioned the strike rate for the system taking long term positions was 33%. Therefore, since 2 occasions out of 3 we will be stopped out at our maximum risk level I would propose the contract margin is not our break even point but 2 times our maximum risk for that trade is. i.e. in the long run our winning trades have to cover our losing trades and in this set-up that's twice our risk plus commissions. Thoughts?

I had a quick flick through the charts, looks like Crude Oil could be signalling today for entry tomorrow.

sdoma, in your example, if you limit the days with more than 4 losing trades, you also limit the days where you turn around and have a number of winning trades turning the day day into a winner. As stated before, if you have a system that has a proven edge, then you should take every trade the system offers unless you dont think you can execute the trade inline with the system. Also, if you stopped after the 4 losing trades, you will likely increase the number of days with 4 losing trades as the system has to balance out.

I think I was a day early with my suggestion that Feeder Cattle were tradeable. I think yesterday was the signal day and today we should be looking to trade if the price goes higher than yesterdays high. Would you agree? Also, if the price doesn't make it today do we wait for the sRSI to fall back to 0 and start again waiting for the signal day? Or do we wait and see if the price breaks the signal day's high and take the trade?

Hi ingot, I'm with youri on this one. The price in both your charts hadn't broken the 21EMA barrier so I don't think this was a valid trade signal. I think it would help if you re-read post #8 and study the chart in that post. I know it's helped me to re-read this thread from start to finish a few times for everything to fully sink in Finally, from your last couple of posts, it sounds like you are starting to second guess the system and second guess yourself and this might have arisen due to your recent run of success. I think it might help you if you focus on working to the system described by OT and you will no longer have to spend time thinking about "what ifs". I mean no malice, only trying to pass on some helpfull advice

Thanks, that's clear up most of it. But the final point where the price must be between the EMA's (or slighly above/below), is that the signal day low price (for short entry) or the signal day close price?

I agree you should take every trade but that's only to make maximum profit. You don't have to take every trade, as like you said, you don't know whether the next will be a winner or loser so if you miss it, no biggie, it'll even out in the long run. And sometimes you shouldn't take every trade. I think there are 3 key factors when executing a trade: 1. follow the rules of the system exactly 2. Your environment allows you to follow the rules exactly (ie nothing is going to get in your way of making the trade as per the system rules e.g you're a scalper and you're waiting on an important call that could come in the middle of a trade and stop you closing at the correct time) 3. You are psychologically fit to make the trade and stick to the system e.g. you've had a run of losers and you're starting to doubt or second guess the system, you're psychologically unfit and shouldn't make the trade as you're unlikely to stick to the system Therefore I don't see a problem with having a stop loss for the day that stops you taking a trade flagged by your system if losing causes you to lose focus and not follow the system.

Hi Optiontimer, I'm not sure exactly what you mean by the points in bold in the quote below and it's leading to me getting a little confused when I'm reviewing the charts: I have extracted the following conditions from the above paragraph and condition 1 & 4 are clear but condition 2 & 3 are not crystal clear for me : 1\ 21EMA > 65EMA 2\ Price is <21EMA or even slightly less than 65EMA 3\ sRSI was at 1 and has retracted 4\ On trading day, Price makes higher high than previous days high In condition 2, when you refer to price are you refering to the days close or high or other? And which day is it, when sRSI is at 1 or when sRSI has retracted? In condition 3, are you saying that on Day 1 the sRSI must be 1, Day 2 the sRSI must turn down and only on Day 3 we enter the trade if conditions 1, 2 & 4 are good and can now ignore the sRSI? Sorry if this is obvious but I'm really not 100% on the system. Thanks again!

Feeder Cattle looked LONG tradeable today: 1\ sRSI turned up from yesterdays 0 2\ 21 EMA > 65 EMA 3\ Price was < 21 EMA 4\ Todays high went higher than yesterdays high See attached chart (2 month)

Hi Optiontimer, I've attached the FOREX chart for GBPAUD from barchart.com with the sRSI, 21EMA & 65EMA. It does indeed look like a short entry: 1\ 21EMA is below 65EMA 2\ sRSI has turned down from value of 1 3\ Price is between the EMAs 4\ Price is lower than previous days low

Hi Optiontimer, I've been trying to replicate your EUR.USD chart over at Barchart.com - Commodity, stock and forex; quotes, charts & analysis as they have the EMA and sRSI indicators but I can't get it to look like the one you posted from MT4 EUR.USD I found the site very useful but just can't get it to tie up with what you've posted Can you see where I'm going wrong?

Hi UB, I was referring to the player and not the game itself. In Poker, only after a large number of hands 100k plus can a player have a high degree of confidence that their winning status is down to skill and not luck. This is primarilly down to the high variance in the game. I was wondering how this correlated to market trading. For example, do you keep a record of your $won per trade and evaluate the standard deviation of your data set?

Hi UB, I used to play a lot of poker online and did quite a lot of research into the subject. I wonder if you can answer a question I have on market trading vs poker playing. In poker (NL Texas Holdem), the win rate standard deviation (variance) is an order of magnitude higher than the win rate, this leads to the possibility of long losing runs even for sucessfull poker players. My question is, how does the variance in trading compare to that of poker e.g. BB/100 hands vs $won/trade and do traders track their win rate standard deviation?

Hi optiontimer, First, thanks for taking the time to create and share this project with the community I wait keenly for each new email alert to appear in my inbox as I'm sure many others do! I would just like to discuss the rational behind the sell coffee alert. Looking at the weekly and monthly continuous charts for coffee it looks to be in a strong bull market and selling would seem to break that strong tenant "the trend is your friend ". I got my chart info from here: Coffee Monthly Commodity Futures Price Chart If I've got something wrong please excuse me as I'm still new to this game!