Steve's Basic System for Retail Traders

[SIUYA 11]

I suggest you (and Eqys) point & click yourself to some other thread where the other children play nice....as to whether the "logic" is strange, I think the experience of making money is strange and unusual to many here at TL....and as with the first few posts, there have been many profound pronouncements about how this "cannot" work.....and yet here we are...

 

Personally I find myself with little time or interest, to debate the subject.....

 

Good evening

 

Sorry you feel that way Steve - given this is a public forum and I would have thought about discussion of ideas, questions and the free flow of thoughts its a shame..... plus you do seem to knock a few others around a bit yourself when playing with the kiddies....these would be valid questions.

If there are some inconsistencies that people might like to confirm then this would only be natural to ask. If you choose not to debate them - no problems......we can still ask.

 

I for one, think that it can certainly work and can be valid - and have never suggested otherwise, and think there is certainly some great ideas here.....

I do however find that the "underdevelopment" and the questions about providing data are "premature" clearly means that you dont have proof that it works over the long term or consistently, despite the claims that it works. Instead it might just provide a nice framework for trades.

 

However, the logic that you wont reveal your distribution calculations, and that it wont be up for sale if it proves profitable should someone wish to buy it means no one will every be able to benefit from all your hard work posting here.

 

you are such a tease Steve.......

[steve46 12]

I direct your attention to the first page of the thread where the "free flow of thoughts" and dialogue takes place....

 

Read if you will the profound commentaries by Predictor, Bluehorseshoe, and Onesmith....and the citations from prestigious academic sources (like Wikipedia for example).

 

As we proceed forward page after page, it becomes clear that this "system" such as it is, has some merit, and suddenly there is interest (12,000 page views in a month) where before people were belittling and critical....and then this final phase where those who have apparently missed the boat come in to either offer "help" or to challenge me to prove something.....

 

One can't say at this point whether I have stumbled onto something important (naturally I think I have), however what I can suggest is that you all are a bit late to the party....and personally I find it amusing....

Edited September 25, 2012 by steve46

[SIUYA 11]

I direct your attention to the first page of the thread where the "free flow of thoughts" and dialogue takes place....

 

Read if you will the profound commentaries by Predictor, Bluehorseshoe, and Onesmith....and the citations from prestigious academic sources (like Wikipedia for example).

 

As we proceed forward, it becomes clear that this "system" such as it is, has some merit, and suddenly there is interest where before people were belittling and critical....and this final phase where those who have apparently missed the boat come in to either offer "help" or to challenge me to prove something.....

 

One can't say at this point whether I have stumbled onto something important (naturally I think I have), however what I can suggest is that you all are a bit late to the party....and personally I find it amusing....

 

I can ignore (as can most others I am sure) a lot of that from the first posts in the hope that something worthwhile develops....when it does it may stimulate more probing questions.

(I do often find it hard to ignore your derision of others which is amusing - thanks)

 

Personally - I have zero interest in using distributions to provide supply and demand levels for my own trading, I do have interest in others ideas, and the questions by Eqsys were in my eyes a way to clarify a system that may have some merit - to see if it then fails like so many others when put to the test - or is of great help to others, or any of those folk who have been watching quietly along.

If you are suggesting that those who ask questions at a later date have missed the boat then Sorry folks you may as well stop reading now.

 

Plus I hope you have "stumbled onto something important" - i thought it had more history behind it ----from your first post, and first line "Okay so I have been working on a "simplified" version of the system that I normally use."

 

---.I guess its just a simplified version for the retail trader that will never be made available if profitable......which in my mind is a little cruel

 

Good luck with it Steve, I hope it develops further.

[steve46 12]

Here is an example of today's NQ Trading Screen setup....As can be seen in the attached chart...I am going to try to use the relationship between the ES and NQ...I will also be monitoring the DAX on another screen

[steve46 12]

Here is the opening trade...price tests up just slightly....and then reverses down

 

Entry on the failure to hold the distribution line results in a nice profit right away...

[steve46 12]

and here is the "counter" for today....we did not take it because the vol was excessive...and the setup occurred too close to the low end of the distribution line....

 

What you want to look at is the way that price "travels" from one line to the next creating a channel....the "safe" trade was the open and the retrace (and failure) back down to the lower extremity of the channel....so actually you had two chances to get on board and obtain a favorable short position.

[steve46 12]

Today's final trades both shorts

 

The "logic" that (apparently) some find "a bit strange", seems to work beautifully as price "takes out" each level then retests...and on the retest, you enter...its that simple...

 

I am done for the day,

 

Good luck folks

 

Steve

[steve46 12]

Here's the close of cash market (NYSE)

 

A few observations

 

First, agree with DB Phoenix that this market is easier to trade than the ES, especially on a trending day....you simply get on and "hold on"....therefore for the retail trader with a limited budget, in our opinion, this would be the place to start...

 

The trader would need at to have a least two (preferrably 5 or more) contracts to place for each position, and depending on skill and risk temperment we would suggest scaling in initially until the trader had some confidence as to direction. Once that experience was in place, positions of at least 2 at a time would provide a reasonable level of profit on good days and minimal risk on the adverse day when the trader is unable to get on the right side..

 

$5/tick

$20/point

 

Reasonably liquid, relatively smooth linear moves, displaying less noise than the ES and less automated "excess"....however be aware that all these markets are now strongly correllated so it is manadatory to trade looking at either the DAX or the ES for guidance and confirmation of trend...I think we will continue to trade it since it seems (in our opinion) to be akin to picking up twenty dollar bills off the ground....

Edited September 25, 2012 by steve46

[goodoboy 10]

The trader would need at to have a least two (preferrably 5 or more) contracts

 

Thanks for sharing about NQ, I have heard from other here at TL that NQ is a bit more smoother to trade.

 

Currently, I am trading one contract until I atleast obtain a winning percentage that I like and have confidence to trade my plan and honor it.

 

Trading one contract is tuff, cause I can not let an extra contract run for bigger profits. However, its helping me with trade management and focus. The original plan was to trade one contract until I obtain $3k profits, and then move to two contracts.

[goodoboy 10]

.I think we will continue to trade it since it seems (in our opinion) to be akin to picking up twenty dollar bills off the ground....

 

That's impressive and funny. lol

[steve46 12]

Here are my ES & DAX distributions for tomorrow

Edited September 26, 2012 by steve46

[steve46 12]

Monitoring Euro News this evening I notice a couple of interesting things that will probably have significant impact on trading during the RTH session

 

First, the German Government has approved the ESM...and second they have banned high frequency trading.....I probably will not have additional comments on these subjects because they are part of an edge I don't wish to give up...

 

The attached chart shows the impact on price action as the new breaks about an hour after the London open

[steve46 12]

and continuing the theme of the previous post, this morning the NQ moved down

 

Interestingly the attached chart shows the trending nature of that market even though the DAX is sideways

 

New home sales data was reported at 7am PST and three minutes later we tested a distribution line and then dropped....the "strange" (according to some) logic has us waiting for this retest as price takes out the distribution line, and then entering short on that retest....the move down is worth about $200 per contract (thus far)

 

With the recent comments about "proof" (how much do you need)....and backtesting, we observe that the reason this distribution is valuable to the trader is that it identifies areas where MARKETS ARE LIKELY TO TEST AND THEN TREND SIGNIFICANTLY....thus it provides a framework that a trader can use to initiate a position....once he/she does that it becomes a question of whether or not they can A) hold long enough to obtain a profit, and B) manage risk adequately to avoid (and/or minimize) losses...

 

Thats the kind of "strange" I'll take every day.....

 

Best of luck to all.

 

Steve

Edited September 26, 2012 by steve46

[SIUYA 11]

Steve - (just for clarity as part of the comedy you like) - nothing strange about the logic of the system. it seems quite straight forward really.

 

post 229...i commented what i thought was strange.

"However, the logic that you wont reveal your distribution calculations, and that it wont be up for sale if it proves profitable should someone wish to buy it means no one will every be able to benefit from all your hard work posting here. "

 

IMHO There is something strange about the logic in the rationale behind posting in this thread.

 

It is a system in development, and is too premature to be tested, you are posting levels you will never sell to anyone, the calculations of,- if they are profitable, it seems to still require a fair bit of discretion.

 

I wouldn't want to to draw any conclusions about your motivations, but that is what is strange Steve - not the logic of your ideas which i think are sound.

 

When its profitable - what about the poor guys left hanging on your every word, wanting your continued distribution levels to be posted every day......,

I hope they learn to create their own distributions and understand the good trading tips and hints you offer that form part of the system.

[steve46 12]

"IMHO There is something strange about the logic in the rationale behind posting in this thread."

 

I think there is something strange about YOUR posting in this thread....if you have no interest (as you've mentioned) in this method....why post....?

 

Perhaps because you have put your foot in your mouth and now you are having trouble removing it.....yes?

 

I suggest you present someone else with the gift of your wisdom....

 

thanks

Edited September 26, 2012 by steve46

[steve46 12]

Missed this next opportunity...because I was posting instead of trading..lesson learned

 

The attached chart shows price retesting a distribution line....inside the ellipse notice that price tests and fails twice....since we cannot eliminate risk from the equation, what you have is a simple proposition....is the level going to hold, with price reversing significantly enough to provide a profit, or not.....on an individual trade NO ONE KNOWS.....and we are paid to take (and manage) this risk....

 

I think you take the trade...since the market direction (to this point in time) is still down

[steve46 12]

and here is the follow up to that trade.....I leave it to the reader to decide whether that one was "worth it"...

[steve46 12]

I suspect this will be interesting to some..

 

What we have is the daily chart with trend lines in place AND based experience my projection of where we MIGHT retrace (blue rectangle) if there is a significant news driven negative event.....

 

We'll see

 

This is the area where institutions are likey to be willing to buy again (at a discount) and try to move the market back up in time for end of year bonus action

[steve46 12]

This is a trade that shows itself periodically and when it does, offers an extremely high probability of significant profit...I call it an "equalization trade" because if often signals a balancing process on the part of traders who were on the right side of the market near the close but may not have had the chance to get fully flat on their positions (typically it is the institutional trader who uses the Globex to finish or "equalize" a position taken in RTH).

 

As you look at the attached chart notice at the close of RTH a pattern where price displays a red candle, then immediately following a green up that is taller (wider). Following these two candles you have what we characterize as "excursion" up, then a return and retest of that same low point, usually this occurs right at the close...(the thick blue line marks the pattern).

 

Notice also that the RTH settlement is equal to or higher than the close...

 

As the Globex opens, price starts out below the distribution line...long entry and favorable position is available as soon as price "takes out" the distribution line (as soon as price takes it out)...stop loss can be as small as 1 point...it should trend strongly from the start, providing an immediate profit...depending on local volatility, this should provide 5 points minimum.

[goodoboy 10]

Thank you Steve,

 

I haven't time to read the latest post for today, but thanks for posting. I had to work late today.

 

Do you still plan to open a chat room? I have friend looking for this type of learning. This could be good service for some traders.

 

Thank you.

[goodoboy 10]

Steve - (just for clarity as part of the comedy you like) - nothing strange about the logic of the system. it seems quite straight forward really.

 

post 229...i commented what i thought was strange.

"However, the logic that you wont reveal your distribution calculations, and that it wont be up for sale if it proves profitable should someone wish to buy it means no one will every be able to benefit from all your hard work posting here. "

 

IMHO There is something strange about the logic in the rationale behind posting in this thread.

 

It is a system in development, and is too premature to be tested, you are posting levels you will never sell to anyone, the calculations of,- if they are profitable, it seems to still require a fair bit of discretion.

 

I wouldn't want to to draw any conclusions about your motivations, but that is what is strange Steve - not the logic of your ideas which i think are sound.

 

When its profitable - what about the poor guys left hanging on your every word, wanting your continued distribution levels to be posted every day......,

I hope they learn to create their own distributions and understand the good trading tips and hints you offer that form part of the system.

 

hahahahha, Man, you guys here are funny and enjoy picking with one another. Leave Steve alone and let him continue posting his system results here on his thread. I am enjoying and learning from what I read from the thread.

[steve46 12]

Thank you Steve,

 

I haven't time to read the latest post for today, but thanks for posting. I had to work late today.

 

Do you still plan to open a chat room? I have friend looking for this type of learning. This could be good service for some traders.

 

Thank you.

 

As I mentioned I would love to have a community type room for serious traders. The problem is that I actually make living trading, and every time I try to post and trade, it takes my focus away from what I am supposed to be doing and I end up missing trades...As of now I intend to complete (as much as I can) posting the general concept of how I trade using this distribution, and then I will consider what to do....along the way I hope to post some additional ideas (like the end of session equalization trade) that folks can use at some point in the future...no matter what system they use to trade...

 

Now this will probably piss a few people off, but I won't sell the distribution, instead as soon as I find a way to approximate how I create it, I will give it away to folks that are struggling along and really trying to make it work....(as in contrast to the psychos who post the crap you read in the first few pages)....Ironically as TradeRunner posted, unless you have some skills it probably won't make an incompetent person into a profitable trader (you'll still have to learn the basics)...

 

 

Good luck in the markets

Steve

Edited September 27, 2012 by steve46

[steve46 12]

Interesting how many folks are showing up (at the bottom of my screen) to lurk and presumably read the thread.....also I notice that there are a lot of "guests" reading the thread as well...leads me to believe that people outside TL are visiting to take a look at this system...

 

Mark (MMS) has been very patient letting me post here, so I am hoping this thread brings in new folks interested in becoming members here.

[steve46 12]

Here's tonight's DAX open....the chart on the left is obviously the DAX....when I see it open right at the median's upper boundary, then react down, it encourages me to think that the distribution is doing what it is supposed to do (frame the action)...more importantly it gives me pause to think that there are other traders out there using either this or a similar framework to trade off of....(could be almost anything of course)....whatever the case, one of the goals of using a systematic approach like this is get on the same page as other participants....

[steve46 12]

Here is what the ES was doing when the DAX opened this evening (with our new distribution in place) again as you can see, the ES market reacts to the line....since we drew up this distribution hours ago, how is it that the market "knows" that a line is there, and why does the market react when it tests that price? I have an idea of how & why this happens but I am keeping it to myself for the moment...until I get more data to confirm what I think is happening...