BlueHorseshoe

Hi Optiontimer, For me, the issue with trading shorter timeframes is not whether to trade them differently - the same patterns of trend with corrections offering low-risk entries occur across all timeframes as you suggest - but rather whether the profits associated with them will overcome the cost of paying the spread (and I'm talking about the single tick spreads of liquid futures, not interbank forex). Using limit orders removes the spread cost, but then you have the issue of unfilled orders, which are always would-be winning trades by definition. The fact that you were able to generate such returns using market orders suggests that I am missing something (and I'm pretty certain it has nothing to do with entries - mine would have been virtually identical to those you have shown) . . . BlueHorseshoe

Some charting platforms have a built in "replay" function for this - you can even choose the speed of the replay so that a five minute bar forms, say, every thirty seconds. Sierra charts have this capability, and I'm sure a query in the right section of the forum will get you advice on other platforms that do. In TradeStation (which doesn't have a replay function as far as I am aware), my preferred method is to scroll through the chart a bar at a time using the left and right arrow keys on the keyboard - this means that I can go at my preferred speed and quickly skip through bars that are not of interest to me. Hope that helps, BlueHorseshoe

Hi GMoney, I think this will depend almost totally on your goals. If you're wanting a long-only buy and hold portfolio, then the answer might be several thousand stocks. If you're wanting to swing trade commodities, then you might want to consider ten or so futures contracts, dependent on your capital. And if you want to daytrade then you might like to focus entirely on a single instrument such as the Euro, the ES, or CL. Your goals should lead to an approach, and that approach should lead you to the most appropriate market(s) to trade. Think of an instrument as a tool to help you achieve your financial goals; you want to use the most appropriate tool for the job you have in mind, right? Hope that helps, BlueHorseshoe

Hi Optiontimer, Thanks for the insight! I didn't realise that you were daytrading - hence I couldn't understand how you were finding sufficient trading opportunities in a two month competition without swing-trading a huge portfolio. What sorts of orders are you using to enter and exit these positions? BlueHorseshoe

Hi Suby, When you say "issues" are you just looking for a list of the constituent stocks for each index? Here are some links: S&P500 NASDAQ Composite BlueHorseshoe

I was never successful as a daytrader, but here are three techniques that I found helpful: 1. Cover up the $P&L on your screen with a bit of tape to help you forget about the actual money involved and focus on the trade management instead. 2. Have someone sit with you who knows nothing about trading and is totally dis-interested. Explain to them the rules for what you're doing (specifically, the flaw that you're trying to avoid), and have them slap your hand when you're about to do something you shouldn't. Build good habits. 3. Follow SIUYA's suggestion and trade many times your usual size in SIM. You could even do the opposite of point 1 above in SIM - close your chart and focus on the $P&L alone to manage your trade - once you're watching positions bounce around at thousands of dollars per tick you'll soon gain perspective. The reasons I failed as a daytrader were more to do with poor strategy than lack of discipline - given that you have a strategy that you know you can be consistently profitable with, then it would be a terrific shame if you can't find ways to manage your behaviour to take adavantage of it. Good luck! BlueHorseshoe

Depending on your aims, you could just invest in them all - have a look at some of the commodity ETFs such as DBC. Hope that helps, BlueHorseshoe

The only other explanation of Wolve Waves I have read is in Raschke and Connor's 'Street Smarts'. Your explanation is a hundred times clearer - nice work! It would be interesting to hear here from anyone who trades regularly with these patterns. Attached below is a text file containing easylanguage for a 'Wolfe Wave Indicator' cribbed from an old thread on Trader's Lab. BlueHorseshoe wolfe wave easylanguage.txt

Hi MMS, I see what you mean - I guess some of the statements are confusing because the two elements aren't necessarily mutually exclusive. I'd still be interested to know people's thoughts on this point though, as everyone here who trades for a living has somehow made that decision to remove the 'glass ceiling' - what motivates one type of person compared to the other? Is it purely considerations of wealth? Sorry to bog your lighthearted poll down with heavy psychology! BlueHorseshoe

I wonder what people think of item 3 in the list? Taking yourself out of an environment of relatively modest but steady and reliable income (schoolteacher, dentist, shopkeeper) and putting yourself in an environment of potential but low probability huge income (market speculation, business startups, pop musician etc), seems to me to be about exposing yourself to a lottery of sorts. It's the 'you've got to be in it to win it' adage. You swap the certainty of average wealth for the removal of the 'glass ceiling' and the uncertain possibility of virtual unlimited wealth. What are other people's thoughts on this? BlueHorseshoe

Thanks for your response. Possibly more amazing than your performance is your modesty! And hard lines on the stop-loss . . . BlueHorseshoe

I have only followed this contest and the previous one - is it pretty normal for Optiontimer to rank highly? BlueHorseshoe ps. it's a genuine question to save me trawling the entire thread, not an attempt to antagonize anyone!

Do most traders really have such difficulty sticking to strategies? When the strategy is profitable, then probably not. When the strategy is not profitable, then why stick with it? Maybe the problem isn't so much that traders aren't willing to adhere to a strategy through hell and high water, but that they don't have a sophisticated approach for deserting their strategy (and knowing when to return to it). Trading in and out of one's own equity curve would be one way to approach this. Animal species are very good at the 'adapt to survive' game because the process is neither emotional nor rational - it's controlled by the sophisticated system that we call genetics. Genetic adaptation is not a rational process, it's a recursive, feedback-driven process. BlueHorseshoe

"I tire of going all broken record but, I thankfully believe at some evolutionary point, traders/posters in here on TL will finally realize re scaling: It’s system specific!" ZDO BlueHorseshoe

Aren't Vanguard geared more towards buy and hold investments rather than active traders? BlueHorseshoe

Hi Alan, When trading a pullback in this manner (a sound recommendation in my opinion), would you tend to buy into the pullback using a limit order, or would you wait for a thrust back in the direction of the underlying uptrend? Also, how would you determine your exit - by using fibonacci, or on a re-test of the prior highs, or by some other method? BlueHorseshoe

Hello, That's a very generous gesture, but there's no need to pay me - I get plenty of coding help from others on the forum for free, so it all balances out in the end! I don't have TradeStation installed on the computer I use for the forum, so I haven't tested the code and it may well contain a few bugs that we need to iron out. Regards, BlueHorseshoe

Destiny, Fate, and Doom are all end-of-the-line concepts; in the meantime we're just "riders on the wheel". For more on the subject of the Fates in classical thought, I recommend Boethius's 'The Consolations of Philosophy'. Although there are certainly more interesting ways to pass the time . . . BlueHorseshoe

Open a button factory? BlueHorseshoe

Hello, So my understanding of your aim is now as follows: Bar[0] - set buypossible condition Bar[-1] - set secondary criteria for long entry Bar[-2] - buy this bar on the open if conditions for bars [0] and [-1] are met Is this correct? If so then the problem appears to be that your buypossible criteria in bar[-1] is intended to refer to bar[0] but instead refers to bar[-1]. Does the following code do what you want? Vars: x(0); If C<O and C<C[29] and Range<1.618*Average(Range,80) and MarketStrength>-0.50 then x=1 Else x=0; If MarketPosition<1 and x[1]=1 and C>O+(2*(C-L))+0.05 then Buy next bar at O; Note that marketposition<>1 contained a redundancy; marketposition can never be greater than 1. I have moved this to the bar[-1] criteria as I think this is probably where you want it, but if not then move it back. Also, be aware that although your range calculation would be appropriate for a 24 hour market, you might want to consider using the Average True Range for a cash session only traded instrument such as a mutual or exchange traded fund. Hope that helps - any questions then let me know. BlueHorseshoe

"Destiny" is not a short term concept. BlueHorseshoe

Hi, This might take a few replies before we get to the solution you want . . . I am a little unclear as to precisely what your question is and what your aim is. My understanding of your current code is that if a series of conditions are met today then you a) send text to the print log specifying the level of a buy entry stop order for tomorrow b) write a message specifying the level of a buy entry stop order for tomorrow c) place a buy entry stop at the desired level to potentially be filled during tomorrow's trading Which of these elements of the code do you wish to remove or amend? Are you using tradestation or multicharts? I understand that you just wish to test your idea and that you do not want an actual order to be filled. Do you want to test your idea by getting an onscreen signal the performance for which you then track manually, or by producing a comprehensive backtest report in a sim account? If you can give me a bit more info relating to these questions then I should be able to help you better. BlueHorseshoe

Contact the company marketing the software and ask to see audited accounts showing returns for at least three years. Also, it doesn't matter whether or not the strategy is exhibiting a very high win rate. Consider a strategy that has a 99% win rate and makes $100 per trade, but looses $9900 1% of the time. It would never make (or loose) any money over the long haul. Except that thrading this strategy you would lose money over the long haul because of slippage, spread, commissions, account fees, platform fees, etc. Given that you have seemingly made the exceptionally sensible leap (in my opinion only) towards systematic trading, then why not develop and test a system of your own where you can at least be confident of its historical performance? Hope that helps, and good luck! BlueHorseshoe

Hi Alan, Sorry I only just spotted your reply. I can see exactly what you mean. But it isn't correlation . . . It's anti-correlation. Setting aside the fact that you got your terminology wrong, which is perfectly forgiveable given that you're a trader and not a maths teacher, then this seems to be a useful observation. Anti-correlation does not imply causation, but I am certainly happy to accept your explanation of the cause - as the dollar cheapens it makes perfect sense that interest from buyers of US stocks would increase. I have known others make the same point relating to the dollar index and US commodity futures. For this relationship to be tradeable using directional positions in just one market, however, it is necessary not only that the two instruments be anti-correlated, but that one 'leads' and the other 'lags'. Here is an unassailable example of a perfectly anti-correlated pair with a permanent coefficient of -1: Eur/Usd - vs - Usd/Eur Knowing that when the one is rising then the other is absolutely certain to be falling isn't of any use, as I'm sure you realise. You'd need to know that when one is rising at a time t, the other will be falling at a time t+1. The relationship would then have predictive value. (Note that in this rather silly and extreme example this is mathematically identical to knowing that just one of the crosses has a perfectly negative coefficient of auto-correlation). In simple terms, what we need to know is whether US stock prices today are highly anti-correlated with the value of the dollar yesterday, or vice-versa. Do you want to work out whether or not this is the case, or shall I? BlueHorseshoe

Hi Richard, It would be great if you could provide some sort of statistical information to support the validity of these patterns. Thanks, BlueHorseshoe.