What Really Works for Technical Traders

[johnw 10]

Hi Johnw,

 

Thanks for the compliment... Yes, I developed the indicators myself (and to avoid the thought I'm trying to promote them here on this forum....they are not for sale)

 

Í'll give you a brief description what the indicators measure:

 

- Trend Filters (slow/medium/fast): These filters classify each bar with a certain degree of tolerance and measure the related swing length.

 

- Trend Index: This is the leading indicator I use for entering a trade. It measures the trend quality based on a dynamic oscilator length.

 

- Market Heartbeat: This is my version of the ADX.

 

- Market Power: Shows the gear-box of the market (same as a car).

 

very ingenious indeed

[Flex1975 10]

Flex1975, the chart is too small (and can't be enlarged) to see what indicators you are using. Would you care to tell us what indicators and settings for each, you are using? And what time frame are you using? I would like to try to examine your use of these indicators and time frames, also. Thank you.

 

Hi Ricastein,

 

Please see my reply to Johnw for a description of the indicators. The settings of the indicators are all dynamic (inside the code)...so none of the indicators have fixed input parameters.

 

I don't use time frame charts. In my opinion time related charts are way too noisy so I use an alternative chart type. Another reason for using an alternative interval is because I'm a automated trader and writing profitable automated systems on alternative charts is less complex....

[johnw 10]

One of the big decisions a trader must take early on in the game is to decide the frame type and size to be used.

 

Will it be a tick frame, or volume or range or a time frame

And will it be 100 tics or 5,000 contracts, or 4 tics or 5 minutes.

 

These two decisions have at great bearing on the outcome of the game.

 

And then a Trader must ask themself .."will I use the much proclaimed 89 tick frame, or will I take a huge risk and round it out to 90 ticks"

 

Once these decisions are taken, it becomes apparent that frames are synthetic interruptions to the flow of contracts through the Exchange at the Bid or at the Ask, solely at the convenience of the Trader.

 

The Close of each frame is a snapshot of the price at the regular intervals that the Trader has prescribed ... and the high and low of the frame may be untradeable depending upon the next tic, but that tic of course lies within the next frame.

 

This is the foundation that TA is built upon, and yet it invokes less discussion than TA itself ... not unlike architecture really, where the colour of the window frames is the source of much discussion, but the foundations hardly rate a mention.

 

So, let us say imagine for a moment that we are top-down Thinkers ... our primary goal of course is to make oodles and oodles of money on a weekly [ and one day on a daily] basis.

 

We repeat this mantra so many times to ourselves that it is chiseled into our DNA.

 

This is an excellent place to be in the game of Trading ... our hearts and minds are solely focused on making lots and lots of money.

 

Therefore it is perfectly consistent with our goal to ask ourselves at EVERY step of our journey .... "is this Indicator or derivative directly going to help me make big money"

 

It is a simple YES / No question ...just like our trades ... we win / we lose

 

How hard can that be ...

[phantom 16]

I do have a few things to say about technical indicators when the timing is right, but this thread is NOT a forum to display all your favorite indicators, so please do that somewhere else. I'm trying to develop your sense of price action primarily, and I don't want to confuse readers of this thread with "the latest, greatest..."

 

'ppreciate it.

 

 

Luv,

Phantom

[SRspider 10]

Phantom,

I think what you are posting here is great. They way you trade conceptually is very similar to the way I approach the market. I can tell this thread is going to be a good one. I will be following with much interest and am looking forward to it.

Thanks

SRspider

[MightyMouse 12]

I promised to provide info (fodder) such that a previously clueless trader can get profitable; I never promised anyone profitability per se. That, of course, would be in violation of CFTC regs.

 

Please come here to learn, you're not invited if you're here to "stir the pot." Nes pas?

 

Au contraire you are not welcome here if you want to scam.

[BlowFish 10]

hi Phantom,

 

I have just read your narrative with respect to your posted chart.

 

All very clear indeed to the point where even a person like I can follow and clearly understand

your thought process leading into your successful trade.

 

What I struggle with, is why you refer to Bolly Bands, 20 ema, MACD, Hammers etc,

when it is obvious that you can read price behaviour so clearly.

 

My thoughts too (particularly on the 'squigglies') . One doesn't need a BB to see price tightening up. One Doesn't need an MA to detect trend or a reversion to the mean. One doesn't need a MACD to see a new low is on less momentum to the last low.

 

I wonder if they can help as 'training wheels' until you can see these things with plain price bars? I guess they can also help with quantifying the magnitude of a phenomena (for automation or whatever).

[phantom 16]

My thoughts too (particularly on the 'squigglies') . One doesn't need a BB to see price tightening up. One Doesn't need an MA to detect trend or a reversion to the mean. One doesn't need a MACD to see a new low is on less momentum to the last low.

 

One also doesn't need color to watch a movie (as opposed to b&w) but it sure makes the movie more enjoyable...

 

 

Luv,

Phantom

[phantom 16]

Au contraire you are not welcome here if you want to scam.

 

If I ever intend on selling anything, I'll be sure to exclude you from the offer...that way, you won't feel scammed.

[BlowFish 10]

One also doesn't need color to watch a movie (as opposed to b&w) but it sure makes the movie more enjoyable...

 

 

Luv,

Phantom

 

Well assuming price is what we are actually interested in watching it through inidcators is akin to watching a movie through time lapse photography that transforms the image as well Anyway I don't want to derail your thread and will be interested to hear about these crash rails later.

[Flex1975 10]

If I ever intend on selling anything, I'll be sure to exclude you from the offer...that way, you won't feel scammed.

 

And there they are...the true intentions! Why not being honest from the beginning? All you had to say was...."Hello, I am Phantom and I am offering a paid coaching service for beginning traders. This is wat you will learn.........(and you make a reliable case of all information nuggets you're selling)".

 

Clear and honest...

[johnw 10]

hi Phantom,

 

I have just read your narrative with respect to your posted chart.

 

All very clear indeed to the point where even a person like I can follow and clearly understand

your thought process leading into your successful trade.

 

What I struggle with, is why you refer to Bolly Bands, 20 ema, MACD, Hammers etc,

when it is obvious that you can read price behaviour so clearly.

 

Hi Phantom,

 

I made this post because I am interested to know why a person with your understanding of price behaviour, employs Indicators that are clearly derivatives of the price itself

... I am not including hammers because they are just name given to price within a certain frame... a descriptive name I will grant you, but never the less it is just a name.

I say this because if you were to rename "hammer" to say zebra, it would have absolutely no influence over the movement of the next tic.

 

And the movement of the next tic and the after that and the one after that is what we trade ...it is the game we call trading ...n'est-ce pas

 

As I say, I am looking forward with interest to your post concerning "guard rails" although I still cannot imagine how a person who can describe price behaviour so clearly as you, needs a derivative in any shape or form.

 

This is your thread of course Phantom and it must not be derailed, but I have come to learn along the journey, that anything that distracts a Trader from following price is in fact just that ......a distraction.

 

I know Indicators can be regarded as "training wheels" to be discarded at some later date,

but that is akin to giving up drinking tomorrow .... as the song says "tomorrow never comes"

 

I can tell from your subsequent posts that you are very passionate about this subject, which makes me anticipate the "guard rails" even more.

Edited May 18, 2011 by johnw

[phantom 16]

Well assuming price is what we are actually interested in watching it through indcators is akin to watching a movie through time lapse photography that transforms the image as well

 

I, for one, couldn't care less about price...I'm only concerned with price direction, volatility and liquidity.

 

The indicators I use serve the function of amplifying price bar subtleties, when they exist, so I can more easily decide whether or not a market is doing what I want it to do prior to my entry. I don't necessarily use the indicators on every trade, but they are there for when I consult them.

 

Hope that clarifies things. If indicators don't work for you, so be it. I never said I was a "purist."

 

 

Luv,

Phantom

[Flex1975 10]

 

The indicators I use serve the function of amplifying price bar subtleties

 

Please explain in detail what your definition of price bar subtleties are and how Bollinger Bands, an EMA or MACD are capable to highlight these "subtleties"...?

[phantom 16]

Dearest Flex, Mighty Mouse, and anyone else who only visits my thread only to look for inconsistencies and spread quasi-malicious comments,

 

My posts are fully intended to be didactic in nature.

 

If, for whatever reason, my posts offend you, you are all certainly invited to refrain from coming here. I can tell by the sheer numbers of visits that some of the folks who frequent my thread are actually interested in learning something.

 

I just hope that the folks who are well intended are not put off by your comments because I intend to continue teaching in spite of all your off-color comments.

 

Furthermore, I will teach on indicators when I am ready, and refuse to be pushed around by the few of you who don't have the patience to wait, and don't know a good thing when you have it right in your hands.

 

Now go do something constructive with your time and leave us alone if you can't behave yourselves...

 

 

Phantom

[phantom 16]

And there they are...the true intentions! Why not being honest from the beginning? All you had to say was...."Hello, I am Phantom and I am offering a paid coaching service for beginning traders. This is wat you will learn.........(and you make a reliable case of all information nuggets you're selling)".

 

Clear and honest...

 

How's this for clarity and honesty: my "coaching program" is unfolding right before your eyes, and its free of charge!

 

Pretty good deal, huh?

 

 

Luv,

Phantom

 

P.S. I do actually intend on getting back on subject soon. Sometimes a little housekeeping is necessary when running a project of this magnitude...

[BlowFish 10]

I, for one, couldn't care less about price...I'm only concerned with price direction, volatility and liquidity.

 

The indicators I use serve the function of amplifying price bar subtleties, when they exist, so I can more easily decide whether or not a market is doing what I want it to do prior to my entry. I don't necessarily use the indicators on every trade, but they are there for when I consult them.

 

Hope that clarifies things. If indicators don't work for you, so be it. I never said I was a "purist."

 

 

Luv,

Phantom

 

Quite so. Whatever helps one make consistent decisions at the hard right edge. Your thread your rules

 

Don't tell anyone but I usually have an indicator or two on my charts, often ones I have written. Anything that 'frames' price like VWAP & SD bands or gives a proxy for order flow like cumulative delta or trade intensity. sshhh just don't tell.

 

Here is a chart of the DAX from this morning the VWAP SD lines frame price beautifully, great when I am feeling too lazy to hand draw S/R. Of course you still need to look to see what price is telling you at these levels but indicator it is.

[johnw 10]

How's this for clarity and honesty: my "coaching program" is unfolding right before your eyes, and its free of charge!

 

Pretty good deal, huh?

 

 

Luv,

Phantom

 

P.S. I do actually intend on getting back on subject soon.

.

 

Yes please ... at the risk of putting you under pressure, it are the "guard rails" that interest me.

[Flex1975 10]

How's this for clarity and honesty: my "coaching program" is unfolding right before your eyes, and its free of charge!

 

Pretty good deal, huh?

 

 

 

True and fair point...when it's free...a reader cannot complain about the quality...

[BlowFish 10]

True and fair point...when it's free...a reader cannot complain about the quality...

 

Sure you can. Constructive criticism is no bad thing. Of course it would be his prerogative to ignore it. Mind you this is the first mention of 'quality'. Seems to be simply and clearly presented to me. What phantom is presenting is a pretty straight forward approach that is based on 'price action' that demonstrably 'works'. Sure you need some money management and it might be an idea to filter trades (times of the day when you can expect volatility to pick up for example), but at the end of the day its solid TA. Simple concept clearly presented?

 

I was going to comment on your first post. It seems that your approach is pretty radically different from phantoms. (of course I may be wrong) It would certainly seem to merit it's own thread if that is the case? I wonder if any 'criticism' is not really criticism, it's just you do stuff differently?

[phantom 16]

I've never really been someone who spent much time in forums in the past... fact is that this is the first traders' website I've ever become involved with.

 

My background is in nuclear engineering but I've been day trading for a living since 1999.

 

I browse around the various topics and see a whole lot of information being passed that, at least to me, and I'm not the biggest rock on the planet, is very difficult to assimilate.

 

I devoted some of my time to this website and to you fellow traders because after breaking every trading rule in the bag MULTIPLE TIMES I had to create trading methods that were so easy that even a lazy, detached, bored, etc,, etc. guy like me could make money.

 

Please don't be fooled by the simplicity of my approach to trading the futures markets. The simplicity in my methods is paramount to my own ability to make big money, week in, week out. I've got 5 mouths to feed and not much patience for a losing trading program.

 

My hope is that at least some of you traders can relate...

 

 

Luv,

Phantom

[johnw 10]

I've never really been someone who spent much time in forums in the past... fact is that this is the first traders' website I've ever become involved with.

 

My background is in nuclear engineering but I've been day trading for a living since 1999.

 

I browse around the various topics and see a whole lot of information being passed that, at least to me, and I'm not the biggest rock on the planet, is very difficult to assimilate.

 

I devoted some of my time to this website and to you fellow traders because after breaking every trading rule in the bag MULTIPLE TIMES I had to create trading methods that were so easy that even a lazy, detached, bored, etc,, etc. guy like me could make money.

 

Please don't be fooled by the simplicity of my approach to trading the futures markets. The simplicity in my methods is paramount to my own ability to make big money, week in, week out. I've got 5 mouths to feed and not much patience for a losing trading program.

 

My hope is that at least some of you traders can relate...

 

 

Luv,

Phantom

 

Hi Phantom,

 

Why not just stay with your original intent and do not allow yourself to be distracted.

If you quite correctly believe that simplicity is the key and yet you incorporate TA

on some sort of ad hoc basis, then I am as curious to follow your posts as I am to learn of "guard rails"

 

Just push on ahead

[BlowFish 10]

Simple does not mean easy as the old cliché goes. Mind you if one can't make simple work the chances of making complex work are pretty slim. I don't think the problem is just assimilation, if there are too many variables and parameters involved it is much harder to be consistent at trigger time.

 

Edit: Yeah as JohnW says push on...I guess I am as guilty as anyone as decreasing the signal to noise ratio.

[Flex1975 10]

Sure you can. Constructive criticism is no bad thing. Of course it would be his prerogative to ignore it. Mind you this is the first mention of 'quality'. Seems to be simply and clearly presented to me. What phantom is presenting is a pretty straight forward approach that is based on 'price action' that demonstrably 'works'. Sure you need some money management and it might be an idea to filter trades (times of the day when you can expect volatility to pick up for example), but at the end of the day its solid TA. Simple concept clearly presented?

 

I was going to comment on your first post. It seems that your approach is pretty radically different from phantoms. (of course I may be wrong) It would certainly seem to merit it's own thread if that is the case? I wonder if any 'criticism' is not really criticism, it's just you do stuff differently?

 

Hi Blowfish,

 

You're right...my approach is radically different but I also respect the approach of Phantom. The only thing that is important (in my opinion) when you choose to present an trading approach on a forum like this is to specify the conditions when you take the trade or don't trade.

 

For example....Phantom says he looks at volatility...is ATR, standard devation or something else leading...are there minimum volatilty values required....is there a minimum length (in bars, price or time) regarding the breakout before the hammer etc etc.... Only then you have a valid trade setup and that's something a lot of (newbie) traders simply do not understand...

 

If the trade rules are clear I can code a "Phantom strategy" and provide some test results for those who are interested...

[BlowFish 10]

Guess we need to give the poor guy a chance! I hazard a guess that the BB's may well be to do with volatility 'crash barriers'.