waveslider

This is a pretty convincing WW on the daily timeframe. #2 point is a major high 4-5 move is quick and violent I'm sure many other chartists are seeing this as a head and shoulders breakdown on the weekly chart. Do people still use H&S patterns to trade? Do they use the 50/200 day MA? It's there built into their psychology.

Urmablume, Thank you for weighing in and we appreciate any examples of practical applications of NN with existing "non-forecasting" studies. Also, are there any retail products that you would prefer for NN processing?

could you recommend some which are easier to follow? I do not have a higher mathematics background and I fell asleep in class most of calculus. thanks

I too am looking at NN technology. I trade end of day successfully using proprietary algorithms. My systems are somewhat adaptive, but I am looking for multiple and diverse levels of confirmations. I don't know if NN is a path I should be following. Can anyone recommend a good starting point? thanks

Indicators to determine trending nature of a market: ADX - directional index, whether bars are overlapping Autocorrelation - whether the next bar tends to follow through or reverse Fractal indices - not totally clear on how these work, but higher readings demonstrate trending.

I am surprised no one has mentioned stratasearch. I have been looking at this software for a while and it appears to be the evolution of what many other software providers have aimed at. I still use TS because I am addicted to easylanguage. I have tried tradersstudio and find it a bit buggy and difficult to implement. For me, system trading is the only way to go. My strategies are simple, a few lines of code which generate a large sample of trades. I am trading probabilities. No matter what my gut or instinct, even after many years of trading, I take the trades my systems tell me. So yes it's boring and mechanical. When I have enough cash available to have a "play account" I look forward to trading futures with discretion, but I see that as more than fun than anything else. Using discretion to day trade brings me too many psychological hang ups to consider as a source of consistent income. Besides it's way too much work sitting around waiting for a trade. Any opinions on Stratasearch, those who have tried it?

"The amount of money I allow a Robot EA to trade depends on the amount of money which is in my accounts. " sorry ericbubb you betray your ignorance here. Learn about percent risk and percent volatility position sizing and you will understand what blowfish is talking about. Just google it and take some time to understand, it may not be easy to grasp at first. This information is absolutely critical to system trading and likely the reason that the robots blow up.

Thanks Brownsfan, that is long buried I think. sandbags- I don't trade anything I can't quantify. But I love charts and obscure patterns that demonstrate balance in a market. To make this idea more usable I would use something objective like the VWAP as a "flip level" and find times that price is oscillating around that.

in your picture above, the wolfe wave would actually be bearish target line going from 1-4. That assumes the 5 point is a false break. I don't trade WW as I can't quantify me but it always fascinates me how often these patterns work (although my mind probably discards the ones that don't)

I see what you are saying, in this case subtract 2 from 3 and then add that amount to 3. So the next step would be to define a flip level. Is it a double, triple test of a level? The initial break of level 3 seems high risk/low reward. It would frequently be a false breakout. Probably the first re-test is the best entry from the opposite side of the flip-level. Have you read the old posts by the chimp on the flip trade? http://www.traderslaboratory.com/forums/34/flip-trade-support-resistance-changing-roles-1714-5.html

Welcome sandbagless, Unfortunate about the bickering. so you'd see the 1-3 line as balance for a mean reversion type trade. I can see that. The prob might lie when you examine volatility, if it is expanding then likely the #5 target would be over shot and the 1-3 line might not even be revisited. Where would you have seen entries?

FWIW, here's my idea of the best method of futures arbitrage - - (the original topic of the thread - now my post appears off topic) Get a room full of beginning traders, give them some stochastics and MACD and do the exact opposite of what they do. If 90% of traders go broke, then that should be a slam dunk. My real point should be that making $ in the markets doesn't need to be rocket science, it just takes thinking creatively. Strategies with only a few lines of code can make $, and if they do, who is to say that they are "for fools". If I get laughed out of the room (cave) by the secret quants, who cares? Still made $. My message is that newbies, don't get to discouraged or intimidated by the quants. You can do it if you are dedicated and creative.

Hi - I just don't have the programming skills to make this work for me. TS is VERY powerful if you have the ability to program well, it can do anything you want. Designed by Murray Ruggerio, a legit figure in the industry, for his own use. They ask $500 for it, I will sell for $300 - an opportunity cost I can afford to lose.

are you talking about spreading between contract months? or between two different markets?

Tresor, what you are posting doesn't help too much since they are posted in hind sight. Let's do this in real time. I would have posted mine in real time but I was trying to start a discussion and didn't want to influence other's pattern analysis. I'm sure we value your contribution, but want to see how your version works in real time.

This has gotten pretty ugly... I would once again like to ask participants in this thread to stick to call out "their version" of wolfe waves.. I was hoping to engage you all in identifying a wave in the S&P (see my post date a week or 2 ago).. While all of this bickering was going on there was a nice 40-50pt move that just completed...

Tresor - The prob. I see is that if you draw 2 straight lines then you have a "pattern". You could do this all day and your mind would trick you into seeing patterns all day. There needs to be more solid criteria here if you are going to trade in a systematic way (as opposed to intuition). It sounds like you trade with a bit more intuition, and since you have traded "your" pattern (I think we settled it that it's not wolfe's pattern, not that it matters anyway) for so long, you know the in's and out's of it. How about drawing up a PDF with some more "strict" and definable rules, then saying what you like to see in a pattern. Maybe you could start a new thread. Otherwise I don't see what this thread is doing anymore. It was begun so that people could post patterns "in progress" and has degraded.

I'd like to do a little experiment with you WW'ers or those following this thread - - Let's all look at the S&P via SPY and submit charts on where (if any) a wolfe wave exists. Start with most recent history. Use the daily chart so we're all on the same page, and please try to explain WHY you chose the points you did. We can all learn from this, and see how it turns out!

how about posting some live examples instead of just hind sight. Should be easy enough for you to find one we can all watch play out. PS I think you should call your pattern something else since it is not a WW as Wolfe himself taught.

Hmmm you would think that an order like that would have moved the market more, it absorbed it well, so there was some conviction on the part of the other side of the trade. Thanks fulcrumtrader. I wonder how the algo programs responded to this unusual activity.

I have never seen anything like that volume go down - 224k contracts traded in one minute! This should be interesting. Anyone have any comments on that price action in ES?

You are correct that the pattern should converge. Also, the lesson I have learned that is most valuable is that volatility should be high, and the move to point five should be a very fast move. The chart you posted (don't know what to call you with that user name!) seems to be grinding higher, I doubt it's a WW, though your point one and two look excellent.

OKNIFD= ok now I feel dumb...! Thanks again for your experience zdo. For anyone who is in the same boat as me here, it looks like what I am trying to do would be considered a "QEP EXEMPT POOL" QEP= Qualified Eligible person" You have to submit a letter to the NFA saying that's what you are doing and the # of the exemption you are filing.

ZDO, that is very helpful hearing your experience. Being a CTA does seem like a lot of potential paperwork/bureaucracy, not to mention fees. By OPM do you mean some type of portfolio management? I don't know what an OPM is. Currently I am structured in the standard way, a LP managed by an LLC. Sep34- You can't hold yourself out to the public as an advisor. There are strict regs. about marketing material, etc. The way I raised money was via friends and family. If you do well, the money finds you - to a certain extent. It's hard to get to $10 million, but once you do - it goes really quickly. (this is for the US)

Brownsfan is right, weekly is not the best metric, and this is all off topic. To manage a fund you don't need certifications, series 7, etc. until you are up over 30 mil. or 100 partners I believe. They are changing these requirements as the SEC looks dumb after the Madoffs and Petters walked all over them. My systems trade about 8 times a month, are in the market an average of 3 days. The futures trading is up about 10% this month and historically returns about 87% annually (not compounding). I guess I posted this question in the wrong forum...