What Really Works for Technical Traders

[IamJon 10]

Phantom,

 

Unless you are using a custom macd, the standard macd in ninjatrader does not have the selection for the moving average types so the fast, slow, and smooth, would all be EMAs.

 

I do understand all of the other moving average you use are SMA.

 

J.

[phantom 16]

Phantom,

 

Unless you are using a custom macd, the standard macd in ninjatrader does not have the selection for the moving average types so the fast, slow, and smooth, would all be EMAs.

 

I do understand all of the other moving average you use are SMA.

 

J.

 

Alright, you show-off (lol).

 

Just goes to show that even someone who pays very little attention to the details (I'm speaking of me here) can make money in these markets.

 

You are absolutely right on this point; they are EMAs.

 

Now go and show me that you, too can make some money using this stuff.

 

 

Luv,

Phantom

[pat15 10]

Phantom here is a chart of the Fri PM action with the macd 5,13,13 sma now. I have expanded the macd so one cud see the histo well. I have a variable called spread and that control the height of the histo bars. I have reduced the size of these histo bars now [from 5 to 2].

 

Attached chart now shows only 1 L and 1 S setup as per your criteria.

 

Thank you for your comments and encouragement.

 

 

Regards

 

 

Pat

[phantom 16]

Phantom here is a chart of the Fri PM action with the macd 5,13,13 sma now. I have expanded the macd so one cud see the histo well. I have a variable called spread and that control the height of the histo bars. I have reduced the size of these histo bars now [from 5 to 2].

 

Attached chart now shows only 1 L and 1 S setup as per your criteria.

 

 

Now try EMAs on those settings and I think we'll be close?!

Your sell signal is ballpark but the buy signal is off-kilter.

 

Redraw with the new settings and let's have a look.

 

 

Luv,

Phantom

[pat15 10]

phantom here is the CL chart with ema's settings ..and possible S and L setup. You are right data feed etc may also cause some variation in the charts. My datafeed is Zenfire.

 

Thank you for the comments.

 

 

Regards

 

 

pat

[phantom 16]

phantom here is the CL chart with ema's settings ..and possible S and L setup. You are right data feed etc may also cause some variation in the charts. My datafeed is Zenfire.

 

The buy signal is void in my book because the fast and slow lines are below the zero line.

 

Otherwise, looks good.

 

 

Luv,

Phantom

[pat15 10]

yes phantom took a little liberty with the L signal but strictly per criteria it is void. I can see you are pretty strict on the setup criteria and dont stray away from it? Will keep an eye open for the setups on CL ... and see how good I do in seeing the setups in real time.

 

Thank you for your comments and help. I wud hope others wud join in and have any comments or post the charts to see. We cud trade this setup and see what else cud be added or look for to make the trades a bit easier for the struggling traders.

 

 

Regards

 

 

Pat

[amory 10]

hi Phantom .. I have only recently discovered this forum & been spending hours on your invaluable thread.

I have studied your comments on the MACD & tried out the various combinations.

Why is it that I can only ever get one signal-line?

the MAC on this chart is the Linda Raschke, if I understand correctly.

did you say that the lines should cross above/ below the zero line for buy/ sell respectively? that's if one can get the lines!

Thanks for a tiring but very absorbing evening.

[phantom 16]

Why is it that I can only ever get one signal-line?

the MACD on this chart is the Linda Raschke, if I understand correctly.

did you say that the lines should cross above/ below the zero line for buy/ sell respectively?

 

Linda's was a stochastic...

 

I use a 5-13-13 MACD.

 

Don't know what to say about your inability to get the fast, slow and signal numbers to produce a fast line and a slow line.

 

Maybe call your chart broker for help?

 

Zero crossing is NOT the signal for this trade.

 

The signal is a "failed test" of the fast line versus the slow line with the zero line being a filter for buys and sells.

 

Anyway, thanks for joining the thread.

 

 

Luv,

Phantom

[amory 10]

sorry to be dwelling on the MACD which I take it is not of primary importance, but this is what I get when calling up Properties for it:

 

Parameters: Fast EMA, Slow EMA & MACD SMA .. so far so good.

 

Colors: Main & Signal .. with no reference to the parameters.

 

as if to say: Colors is what you asked for, colors is what you get!

forget about Parameters .. although they do work, becoz the display does change in accordance with the input .. with one line missing.

 

it is very strange.

[IamJon 10]

amory,

 

Your macd is showing the signal (fast) as a histogram and the smoothed (slow) as the line. Phantom's macd is showing the signal (fast) as a line, the smoothed (slow) as a line, and the difference between the signal and the smoothed as a histogram. The diff line is not important for this trading method.

 

There are other MT4 macds available that will look more like Phantoms. I can point you to them if you would like.

 

J.

[amory 10]

Thank IamJon .. well that clears that up.

 

Seeing that it's the only additional window on Phantom's charts, it must be of some importance in the general scheme of things.

 

I wonder if I am in close enough touch with the methodology, using mostly the One-hour timeframe?

 

<< Zero crossing is NOT the signal for this trade.

The signal is a "failed test" of the fast line versus the slow line with the zero line being a filter for buys and sells. >>

 

that alone will require a fair bit of comparison & study!

[pat15 10]

"The signal is a "failed test" of the fast line versus the slow line with the zero line being a filter for buys and sells."

 

phantom not sure I understand this statement correctly especially "failed test". Do you mean the same thing that you use in your setup which is not related to CL?

 

here is the 2 locations of CL setup S and L as I understand the CL setup based on Macd. Any comments wud be appreciated..

 

Regards

 

 

Pat

[phantom 16]

"The signal is a "failed test" of the fast line versus the slow line with the zero line being a filter for buys and sells."

 

phantom not sure I understand this statement correctly especially "failed test". Do you mean the same thing that you use in your setup which is not related to CL?

 

here is the 2 locations of CL setup S and L as I understand the CL setup based on Macd. Any comments wud be appreciated..

 

 

Failed test means the fast line tested the slow line, then turned away.

 

You nailed these signals. Great job.

 

 

Luv,

Phantom

[darvasfan 10]

Linda's was a stochastic...

 

I use a 5-13-13 MACD.

 

Don't know what to say about your inability to get the fast, slow and signal numbers to produce a fast line and a slow line.

 

Maybe call your chart broker for help?

 

Zero crossing is NOT the signal for this trade.

 

The signal is a "failed test" of the fast line versus the slow line with the zero line being a filter for buys and sells.

 

Anyway, thanks for joining the thread.

 

 

Luv,

Phantom

 

/

 

The correct time frame for the signals is what works, of course. But, I believe the best, and the one Rashke uses, is a 3/10 with a 16 smoothing. That's based on the old SMR approach that Chick Goslin uses. It's phenomenal what that does. Unfortunately, I still don't trust it enough to avoid second guessing. My person hang-up.

[phantom 16]

/ I believe the best, and the one Rashke uses, is a 3/10 with a 16 smoothing.

 

Darvasfan, you are a bit misleading in your comment...

 

(P.69 STREET SMARTS: "I tinkered with the %K and %D to try and duplicate the 3-10 oscillator. I found that by using the 7%K and a 10%D the "Anti" pattern worked even better than it did with my own tools.")

 

This is, of course, a stochastic.

 

I've found that my macd indicator works even better for me than the stoch.

 

It has stood the test of time.

 

BTW, Mr.Goslin was a self-proclaimed loser in the long run; that's beside the point.

 

I'm just saying...

 

 

Luv,

Phantom

[darvasfan 10]

I don't know about Chick being a self proclaimed loser in the long run. Here's what he says on his bio: "Professional trader since 1979 (trading his own account), during which time he has made well over 10,000 trades, over $100,000 profit in one day, over $200,000 profit in one week and well over $1,000,000 profit in one year; one time turning $100,000 into $1,500,000 in eighteen months. (Note: an accountant's letter verifying this result is available on this Web site.)"

 

As to Rashke, I have an old lecture she gave to the telerate seminars with a workbook. She stated: "The concepts introduced in this workshop are patterns I have been using since 1981 when I originally subscribed to a charting service called Security Market Research. The service plotted a 3-10 simple moving average oscillator with a 16 period moving average of the oscillator." She goes on in the lecture to say that she uses now the MACD with a 3-10/16 which replicates the SMR oscillator. I don't have Street Smarts, so don't know what she says there. But, I think my original statement was very accurate.

[phantom 16]

I don't have Street Smarts, so don't know what she says there. But, I think my original statement was very accurate.

 

Folks, we have another "live one" here...

 

My readers who own the book know I'm telling the truth...

[darvasfan 10]

Folks, we have another "live one" here...

 

My readers who own the book know I'm telling the truth...

 

No need to get your panties in a wad, phantom. I didn't say you weren't telling the truth. I was simply trying to help out based on information I have from Linda R, which is quite accurate. I don't have any axe to grind here. I'm a nobody. I'm not a profitable trader. I'm simply a guy struggling to get it. It's odd that you feel the need to immediately be defensive about a simple, truthful piece of info. I offered. Quite odd, indeed.

[phantom 16]

No need to get your panties in a wad, phantom. I didn't say you weren't telling the truth. I was simply trying to help out based on information I have from Linda R, which is quite accurate. I don't have any axe to grind here. I'm a nobody. I'm not a profitable trader. I'm simply a guy struggling to get it. It's odd that you feel the need to immediately be defensive about a simple, truthful piece of info. I offered. Quite odd, indeed.

 

I'm sorry.

 

I sometimes let my emotions get the best of me.

 

 

Luv,

Phantom

[darvasfan 10]

No worries. It's cool. Apology accepted, and thanks for taking the time to offer your help.

[phantom 16]

No worries. It's cool. Apology accepted, and thanks for taking the time to offer your help.

 

Speaking of offering help, I'm curious...

 

Since I've never taken the time to study Nicolas Darvas, would it be asking too much for you to provide a summary of his methodology for my readers?

 

 

Luv,

Phantom

[darvasfan 10]

I'll do my best on summarizing Darvas.

 

He wrote a great book back in 1960: How I Made $2,000,000 in the Stock Market. He made that money during the late 50s bull market. But, he also went on to use his method successfully until he died sometime in the late 70s. He made several hundred thousand trading National Semiconductor when the bear market of the early 70s was over. He was a true renaissance man.

 

As far as I can tell, Darvas only went long stocks. He never went short. So, when the market was a bear market, he simply stayed out.

 

He was basically a breakout trader. He did not use charts, only stock quotes that he received either from the newspaper, or maybe Barron's. Since he was a professional dancer, he actually made most of his money while he was touring in Europe. However, even though he did not use charts, his method applies very easily, if not more so, to charts.

 

Bill O'Neal, I believe, borrowed heavily from Darvas, who in turn borrowed from his predecessors. Darvas would look for young, explosive growth stocks that were involved in some new or different facet of society. He didn't care for blue chips. This would equate to the N in CANSLIM. For example, he made a huge amount of money in Lorillard, which was the company that came up with the first filtered cigarette.

 

Darvas would then look for substantial volume coming into the stock while, at the same time, the stock was moving up in price. He would then look to buy the stock on a breakout to a new high. Fundamentally, other than the "new" element, he would focus primarily on stocks that had really strong earnings. That is about the only real fundamental he cared about.

 

His technical system involved "boxes". Once a stock broke into a new high, he would buy the breakout. When the move stopped, and price fell from the high for 3 days (or more), he would mark the high as the top of the box. After the pull back, when the stock made a low and then rallied for 3 days (or more), that pivot low would be the bottom of the box. He would move his stop loss a small percentage below the low of the box. Then, it was just a matter of following the stock, and then watching it move up, make new boxes, while trailing the stop below the low of the box.

 

He generally followed that method, but he was not a mechanical trader. There were occasions when the stock was "not acting right" where he actually exited before his stop was hit. It think he was picking up some Wyckoff there but he did not give any credit for that "feel".

 

His method is still sound. Check out Apple and you can see that at certain points applying the Darvas method, one could have made 150 points or more at any one stage of the move. Darvas' method is simple; but, it is not easy.

 

Hope this helps.

[bobcollett 10]

Dear Darvasfan,

Thats a very good synopsis of Darvas

And like Wykoff and Livermore and the rest, they relied on Volume.

Today its called Tape Reading.

The tape read like this...

100 UST @ 158.20

200 UST @ 158.20

1000 UST @ 158.30 hello

500 UST @ 158.20

1000 UST @158.30 hello

BUY

Today the volume is so much higher ,the system is difficult to apply.

Unless you work for Trade Guiders.

Do you trade like Darvas?

Do you make a living?

And if Mighty Mouse reads this, he will ask for your trading statement.

Kind regards

bobc

[phantom 16]

His technical system involved "boxes". Once a stock broke into a new high, he would buy the breakout. When the move stopped, and price fell from the high for 3 days (or more), he would mark the high as the top of the box. After the pull back, when the stock made a low and then rallied for 3 days (or more), that pivot low would be the bottom of the box. He would move his stop loss a small percentage below the low of the box. Then, it was just a matter of following the stock, and then watching it move up, make new boxes, while trailing the stop below the low of the box.

 

Sounds like the Ross hook, also the 3 day ringed high/low breakout system.

 

This is the basis of many a fund manager, very technically sound in a trending market.

 

A little trickier in day trading...

 

Thanks to you for the input!

 

 

Luv,

Phantom