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swansjr

Five Tick Trading

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I stumbled upon the following site Five Tick Trading. This guy is pushing a trading system that takes tiny profits with a high win/loss ratio.

 

Here are two videos from his site:

Video 1

Video 2

 

 

It looks like bollinger bands are being used and he initiates a trade to fade the move after a trigger bar has fired off. I'm not sure what the indicator is at the lower portion of his screen (value chart?), but I think this is used to set off the trigger bar. Once we have a trigger bar the entry price, initial stop loss and target are mechanical. Kind of interesting.

 

Does anyone have any insight into method? Has someone coded this up as an indicator or even a complete system? I know there are some smart programmers here that may have reversed engineered this method and created EasyLanguage code for it.

 

Thanks.

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And I stumbled upon an archived copy of the $297 course manual via Google.

 

This method applies to the S&P, Dow Jones, and Russell.

We attempt to pick tops and bottoms using a simple indicator and then use the price action

to grab a quick correction against the prevailing trend, often it turns out to be a real top or

bottom and the market takes off in a new trend. We however are long gone. This is not a

trend following method, it’s a grab an opportunity and run for it, method. It works.

The indicator we use is the Commodity Channel Index (CCI) set at 45 periods with the

measurement being the High+Low/2. This is available on pretty well all charting packages.

We look to Sell when this indicator exceeds 200 and Buy when it falls below

-200.

We use a one minute real-time chart and when we get a buy or sell signal from the CCI we

trail an entry order just above or below the market so that we quickly catch a market

reversal when it happens. (Note When not If, no market continues in one direction for very

long, and that’s we’re betting on).

Our profit target is just a small distance away and an order is placed as soon as our first

order is filled. Sometimes if the market starts to move against us a stop-loss order would

be entered but often that’s not required. Usually our profit target will be hit and we have

one of two winning trades for the day in the bag.

 

Nothing about Bollinger Bands in the manual, although I suspect that the videos that accompany the course may address their usage.

 

Good luck.

Edited by Soultrader
Copyright material removed per request from author

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And I stumbled upon an archived copy of the $297 course manual via Google.

 

 

 

Nothing about Bollinger Bands in the manual, although I suspect that the videos that accompany the course may address their usage.

 

Good luck.

 

 

Nice find. Thanks for posting the manual. For $297 it works out to about $17.47 per page.

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I started to trade the eminis.I have an account with Mirus futures and so far so good.I'd like to open a second account with another broker.Any good names out there?

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Sure. How much money you got to fund your account?

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Sorry, but you'll have to do some of the legwork yourself.

 

Did you actually READ the manual?

 

You might find your answer there....

 

-fs

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200 cci readings "may" mean exhaustion as his aproach is ... but you may be cautios as it may also mean momentum... the method is nice and clean, its countertrend... ideal on cycle days climate... the play is refreshing back to the mid band... I would add to it a false break setup (M type) to make it a little more robust...my 2 cents. cheers Walter.

1.png.165e121612825e235785368ffb345565.png

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Walter,

 

Could you elaborate on your statement, below? In short, what is an M type false break setup?

 

I would add to it a false break setup (M type) to make it a little more robust...my 2 cents. cheers Walter.

 

Jeff

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I coded up the basics (I did not include every rule discussed in the manual since my purpose was more a prototype or proof-of-concept. Maybe this is not entirely fair to the setup. Anyway...) of the 5-tick system in tradestation and back tested it and was not happy with the results. With the "small" profit target it appeared to be difficult to overcome slippage and commissions not to mention overcoming losing trades. I'll dig up the results and post them soon.

 

In short, if the basic concept does not test well as an automated system, I don't trade it. However, maybe I should post the code so much brighter programmers can fill in the blanks and/or improve upon the code. Perhaps another filter added to the system will help turn this counter trend strategy into something a little more appealing.

 

Jeff

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The setup is similar to Woodies CCI old setup called hook from extreme. The setup was entry on the passing the 200 line and hooking back across the 200 line. When Woodies room recently switched to range bar charts some testing by room members was done but proved not to be profitable. You can google for the old woodie cci manual

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The setup is similar to Woodies CCI old setup called hook from extreme. The setup was entry on the passing the 200 line and hooking back across the 200 line. When Woodies room recently switched to range bar charts some testing by room members was done but proved not to be profitable. You can google for the old woodie cci manual

 

 

As all setups, they will work 50/50 depending on market climate (congestion/trending) , thats why understanding market climate is the key skill to any trader... cheers Walter.

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As all setups, they will work 50/50 depending on market climate (congestion/trending) , thats why understanding market climate is the key skill to any trader... cheers Walter.

 

 

For example, take a look at a forex chart right now, you will notice some congestion on the eur/usd.... at 8:15 PM bernie will speak, and most probably the climate will become trend and momentum...

Edited by walterw
added pm to 8:15

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I think that the concept behind this "system" is that you only trade in the first hour or so after the RTH market opens while the market is finding its balance. It is at these times that the countertrend trades have the highest probability of success.

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Why would they not have success at say 2pm EST when the market normally takes off again ? The principle is that in any market at some point there will be a retrace and catching it can give a quick few points of profit. It is almost a micro momentum system and I can see that it should be just as effective at any time that it is used.

 

 

Paul

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For example, take a look at a forex chart right now, you will notice some congestion on the eur/usd.... at 8:15 PM bernie will speak, and most probably the climate will become trend and momentum...

 

EURUSD got cloudy an hour or so before the US market open and the temperature drop for some 90-100+ pips. :) Uncle Bernie can do his show tonight and we'll just see and trade how it shows on the chart tomorrow. :cheers:

 

ENJOY!

 

ztrader

5aa70e73cbf76_EURUSDClimateUSmarket.thumb.jpg.2bebd225261255481dc06ab7ecd6e2f5.jpg

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and when the weakness is gone my fxmm 30 starts to make nice divergence... that means we will probably refresh back to mid band...

 

attachment.php?attachmentid=7002&stc=1&d=1213064967

 

 

cheers Walter.

5aa70e7445c60_subsidingweakness.thumb.png.92d7418f226f2a0282f5b53d99bbcce2.png

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And the scalpers version of Bernies momentum efect... aint that nice...

 

 

attachment.php?attachmentid=7003&stc=1&d=1213066982

 

 

gotta love Bernie... he normally injects some nice momentum climate... cheers Walter.

5aa70e7454215_scalperversion.thumb.png.b589c0476dc439ad97b50626ed0eaa9e.png

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and when the weakness is gone my fxmm 30 starts to make nice divergence... that means we will probably refresh back to mid band...

 

 

cheers Walter.

 

Nice catch, Walter. Here is how I grabbed mine minutes ahead of the Bernie Show on a bounce off of HOD. Walter, you may have to start a new thread on forex with your FXMultiMap outside of this Five Tick thread. As always, your analysis is always appreciated.

 

ENJOY!

 

ztrader

5aa70e745b424_EURUSDonBernieShow.thumb.jpg.566b8e9541b983b6fbf7716afba35ef8.jpg

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Sweet short EJ ¡¡ very pipastic as usual ... yes I will start a thread, I am sorry for hijacking this one, basicly I think I wanted to add the market climate consideration previous to the 5 tick setup... so the 5 tick setup is a cycle counter setup, so in order to work you must have a cycle consolidation climate... cheers Walter.

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200 cci readings "may" mean exhaustion as his aproach is ... but you may be cautios as it may also mean momentum... the method is nice and clean, its countertrend... ideal on cycle days climate... the play is refreshing back to the mid band... I would add to it a false break setup (M type) to make it a little more robust...my 2 cents. cheers Walter.

 

The play is not refreshing back to the mid band, he just takes 6 or 7 ticks off the table in profit from whatever price he gets in at and that is it. I tried it today as an experiment with one of my accounts and made 5 trades, (1 was scratch because I accidently hit buy when I intended to sell) and 4 were profitable with a net profit of 18 points after commission. You have to be very quick with this approach as it is a mini counter trend momentum method which can quickly exhaust.

 

Also I don't see how he is making a living out of this because he trades the Emini Dow (YM) which is $5 per tick. He takes two trades a day and then stops and it appears that he makes around 14 to 21 ticks in profit which is 12 to 19 after commissions. So that equates to between $60 and $95 a day (or £30 to £48 as he is UK based) and that is not enough to live on in my view.

 

 

 

Paul

5aa70e74ad319_10thJune.jpg.abe3a2785d105c9f376c26382fe38144.jpg

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The play is not refreshing back to the mid band, he just takes 6 or 7 ticks off the table in profit from whatever price he gets in at and that is it. I tried it today as an experiment with one of my accounts and made 5 trades, (1 was scratch because I accidently hit buy when I intended to sell) and 4 were profitable with a net profit of 18 points after commission. You have to be very quick with this approach as it is a mini counter trend momentum method which can quickly exhaust.

 

Also I don't see how he is making a living out of this because he trades the Emini Dow (YM) which is $5 per tick. He takes two trades a day and then stops and it appears that he makes around 14 to 21 ticks in profit which is 12 to 19 after commissions. So that equates to between $60 and $95 a day (or £30 to £48 as he is UK based) and that is not enough to live on in my view.

 

 

 

Paul

 

well 60 to 95 dollars "per contract" will make it... you can trade 50 contracts very confortable on YM... so that will make you 3000 to 4750 per day... could that be enough ? cheers Walter.

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