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carltonp

Stratey Assessment / Review

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Hello Traders,

 

I wonder if someone could shed some light on the following scenario with comments.

 

I trade the mini dow. My executions and exits occur on the 5min interval.

 

My main strategy is to wait until I see a WRB (wide range bar) develop and if there is a pause for say 15 seconds or more before the current interval is about to change then prepare to enter on a pull back. Let me give you an example. Lets say I'm witnessing a bullish WRB and the time is 11:54:40, (the interval will change in 20 seconds and the new interval will be 11:55), however just before the end of the current interval the price has paused at say 11833 for 18 seconds. At the begining of the new interval I will be looking to enter a pullback (a short trade in this instance) at or around 11833.

 

My thoughts are that right up until almost the very end of the current interval there is a huge amount of bullish activity, but just before end of the interval the price pauses - no one will know for sure why the price has suddenly paused but it has.

 

I have found that there appear to be fairly high probability that after the pause the price will pullback in the opposite direction or simply gap up / down in the opposite direction in the new interval.

 

I would love to hear your comments.

 

Cheers

 

Carlton

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Hello Traders,

 

I wonder if someone could shed some light on the following scenario with comments.

 

I trade the mini dow. My executions and exits occur on the 5min interval.

 

My main strategy is to wait until I see a WRB (wide range bar) develop and if there is a pause for say 15 seconds or more before the current interval is about to change then prepare to enter on a pull back. Let me give you an example. Lets say I'm witnessing a bullish WRB and the time is 11:54:40, (the interval will change in 20 seconds and the new interval will be 11:55), however just before the end of the current interval the price has paused at say 11833 for 18 seconds. At the begining of the new interval I will be looking to enter a pullback (a short trade in this instance) at or around 11833.

 

My thoughts are that right up until almost the very end of the current interval there is a huge amount of bullish activity, but just before end of the interval the price pauses - no one will know for sure why the price has suddenly paused but it has.

 

I have found that there appear to be fairly high probability that after the pause the price will pullback in the opposite direction or simply gap up / down in the opposite direction in the new interval.

 

I would love to hear your comments.

 

Cheers

 

Carlton

 

Seems like an interesting observation.

 

Some questions to ask yourself:

Does this phenomenon capture trader behavior that is identifiable?

Does this phenomenon occur in other time intervals?

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Seems like an interesting observation.

 

Some questions to ask yourself:

Does this phenomenon capture trader behavior that is identifiable?

Does this phenomenon occur in other time intervals?

 

MM, thanks for responding. To be honest I don't the answer to your first question. I was hoping that other traders will shed some light on that.

 

I havent' tried other intervals.....

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Seems like an interesting observation.

 

 

Does this phenomenon capture trader behavior that is identifiable?

 

Hi Mighty Mouse

Please explain what you mean by this.

Kind regards

bobc

 

Sure.

 

If it captures a behavior, then it is something that you can hypothesis will occur more often than not and you might find it on other time frames as well. If you properly test it and determine that it does capture a behavior like fear, greed, aggressiveness, weakness, etc then you may want to add it to your trading. If it doesn't capture a behavior, I personally wouldn't do anything with it.

 

As an example, I have never made sense of the 80% rule we have all learned from MP and I will not trade it. It makes no sense to me why it would traverse the balance area if the circumstances set up the 80% rule. On the other hand, there are things that I do that I will do 1000 times out of 1000 times because they make sense to me and they occur with a lot less frequency than 80%.

 

Cabese?

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Sure.

 

If it captures a behavior, then it is something that you can hypothesis will occur more often than not and you might find it on other time frames as well. If you properly test it and determine that it does capture a behavior like fear, greed, aggressiveness, weakness, etc then you may want to add it to your trading. If it doesn't capture a behavior, I personally wouldn't do anything with it.

 

As an example, I have never made sense of the 80% rule we have all learned from MP and I will not trade it. It makes no sense to me why it would traverse the balance area if the circumstances set up the 80% rule. On the other hand, there are things that I do that I will do 1000 times out of 1000 times because they make sense to me and they occur with a lot less frequency than 80%.

 

Cabese?

 

Hi Mighty Mouse

I see exactly the same pause and reversal in my market ,South African ALSI 40

Also 5 minute time span

It has taken me quite a few years to see this on the 5min so I dont know if it occures on other time spans

Somewhere I read that this is programable trading.(Algo)

Now the million dollar question

Would you say algorithmic trading is identifiable trader behaviour?

regards

bobc

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Hi Mighty Mouse

I see exactly the same pause and reversal in my market ,South African ALSI 40

Also 5 minute time span

It has taken me quite a few years to see this on the 5min so I dont know if it occures on other time spans

Somewhere I read that this is programable trading.(Algo)

Now the million dollar question

Would you say algorithmic trading is identifiable trader behaviour?

regards

bobc

 

Sometimes it does capture behavior. You should be able to identify the behavior and if you can, then you have something. Sometimes you are capturing a statistical fluke that will go away over time. Or, it may already have gone away and no one told you. That's the chance you take by trading based solely on backtesting a high probability nothing.

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Hello carlton:

 

Sorry for the late reply but I'm just getting caught up on my reading.

 

I also trade the YM and I'm not sure if this addresses your issue but here is an idea for you.

 

I keep a small chart of the regular sized DOW in the corner of my monitor with Daily Pivots, 80 EMA & 200 EMA. I have noticed that when the YM mysteriously pauses or reverses it occurs when the regular DOW is at one of these S & R areas.

 

If you decide to try this you will notice that the YM trails the DOW by a certain number of points and the two markets pretty much mirror each other but it is impossible to tell which one is leading the other. The data feed for the DOW can also be a lot slower but it's nice to know when that market is approaching one of those areas.

 

Hope this helps.

 

Cheers

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Hello carlton:

 

Sorry for the late reply but I'm just getting caught up on my reading.

 

If you decide to try this you will notice that the YM trails the DOW by a certain number of points and the two markets pretty much mirror each other but it is impossible to tell which one is leading the other.

Hope this helps.

 

Cheers

 

Thanks for responding. This is so true.

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