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optiontimer

Trend & Momentum - Indicators of Choice II

Which indicator should I use to determine long-term trend for my trading system?  

106 members have voted

  1. 1. Which indicator should I use to determine long-term trend for my trading system?

    • Single Moving Average
      23
    • Dual Moving Averages (Short MA relative to Long MA)
      46
    • MACD
      13
    • Bollinger Bands
      10
    • Donchian Channel
      5
    • Other (Please post your suggestion to the thread when choosing this option)
      9


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When you start the new thread, can you please post a reference to it here just before you close this one, so we get email notification ?

 

Thanks, Max

 

Sure thing ... thanks for that suggestion,

 

-optiontimer

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Hi OT and others. I have been trading for about 4 years (unsuccessfully for about 3.5 years). My accounts (demo and real) are just starting to see some advancements in the last 6 months where previously there was a lot of downward movements. In the past I have done the indicator thing and been burned, probably because I didn't trade correctly with the indicators. For instance MA crosses, or price/close relative to MAs can make money. I guess my biggest mistake was to expect that every trade can turn into a nice big trend and make me rich!!! I have radically altered this to expect only a small targetted profit on each trade (1 lot) using a fibonacci extension target (132%, not 138%) then moving the stop to breakeven+ on the remaining portion (1 lot) to see if it turns into a trend.

 

An MA setup that I have been watching closely for some months now is the 2-3 SMA of the Open vs the 2-3 SMA of the Close - where SMA Close above SMA Open = uptrend and reverse for downtrend. Price crossing down the 2-3 SMA of the High and price crossing up the 2-3 SMA of the Low can be used for efficient entry points. I also enter similar to one of the previous posters with (for long entry) crossup of the previous bear candle's open and (for short entry) crossdown of the previous bull candle's open.

 

I have also been looking at trying to count Elliot Waves for entries and exits and have done some excellent trades when I got the counts correct. Of course, when you get the counts wrong you're stopped out...

 

Just my 2c worth... I have also invented an indicator which seems to indicate trend, but will post on that later with a chart when I am at home. I look forward with interest to the development of this thread.

 

As for instrument, my preferences are for those with the least spread, which for me are EURUSD, GBPUSD, EURGBP, FTSE100. I have spreadbetting accounts where I trade these based in the UK, although I now live and work in Brisbane, Australia.

 

Regards, Chris

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One of my favorite trading books is Futures Trading Strategy by Stanley Kroll. It is out of print, but available used and on the cheap at Amazon and occasionally at ebay. I will be relying on it heavily, implicitly if not explicitly, as this project moves forward. Whether you are going to be following along or not, if you are not where you want to be as a trader, you might find this book worth s good read - or two or three or four.

 

On a side note, I mentioned that I would likely be using stochasticRSI (a stochastic of RSI) rather than RSI itself. Stanley Kroll, along with Tushar Chande, developed and wrote about the stochasticRSI in their collaborative effort The New Technical Trader.

 

Thank you,

 

-optiontimer

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One of my favorite trading books is Futures Trading Strategy by Stanley Kroll. It is out of print, but available used and on the cheap at Amazon and occasionally at ebay. I will be relying on it heavily, implicitly if not explicitly, as this project moves forward...

 

I was poking around traderslaboratory.com and I found that a pdf file of Kroll's bok was posted here by thalestrader in the Reading Charts thread. You can download it by clicking on his quote which I am pasting below.

 

-OT

 

 

Weekend Reading

 

Hi Folks,

 

Here is a nice work by the late Stanley Kroll. I also recommend his earlier book, The Professional Commodity Trader. He is an interesting case in that he moved from being a largely discretionary trader to being systems based trader. What matters, however, is that whether he was trading based upon his discretion or his computerized systems, he knew well the importance of consistent and disciplined application of his method.

 

Best Wishes,

 

Thales

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I am not able to access the computer with CSI UA tonight, so the charts I will be posting as this project gets underway will look a bit different from this one. But I wanted to get this posted now so that any who are interested in following along can get themselves accustomed to the indicators I'll be using. The attached chart is a freebie you can use at Barchart.com - Commodity, stock and forex; quotes, charts & analysis. I will be using the 21 EMA, the 65 EMA, and, for now, a 7 period stochasticRSI. The chart looks like this:

 

attachment.php?attachmentid=25001&stc=1&d=1308968372

 

I have decided that I will trade futures in this account. I will finalize the trading portfolio over the coming days. At this time, I will confirm that the eligible instruments will include US stock index futures (the e-mini's), forex futures (EURUSD, AUDUSD, GBPUSD, and JPYUSD), and the 30 year bond and 10 year note. I will likely include several grains, softs, and meats as well. I still have not decided whether to include energy futures.

 

Once the trading portfolio is finalized, and I confirm with IB the account is ready for trading, I will start the trading thread.

 

I believe if you register at Barchart.com - Commodity, stock and forex; quotes, charts & analysis for free, that you can store your own "chart book" and save the a chart template matching the above chart. This would allow you to follow along on your own without having to rely solely on me and what I decide to post or not post. Also, since Barchart.com - Commodity, stock and forex; quotes, charts & analysis is free, there is no need to subscribe to CSI UA (keep your costs low right now so you can put the $$'s into your trading account rather than someone else's pockets). I will play with it tomorrow myself to see if it can be done there for free. If anyone already knows the answer, let us know here.

 

Thank You,

 

optiontimer

5aa710834e843_TraderslaboratoryProjectTemplate.jpg.9ad7eda06fb6b39660e99858c8db71e1.jpg

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When you start the new thread, can you please post a reference to it here just before you close this one, so we get email notification ?

 

Thanks, Max

 

The new thread may be found here:

 

http://www.traderslaboratory.com/forums/trading-psychology/10158-optiontimers-project.html#post121784

 

More material to follow in the coming hours or days - I want to have a good foundation for us to build upon.

 

Thank you,

 

optiontimer

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