Is There a Strategy Wins 90%

[DbPhoenix 42]

If you are talking about testing your plan with old data, then sure you can test it. If that gives you confidence that your plan will work, then I suppose it is helpful.

 

There are times when you can be consistently profitable and times when you can't, given an account size. Frequently the best trade is no trade. No trade means no loss or profit. Other times you may still be able to profit, but the profits are very small. Other times your account is just to small to trade, given the market conditions. Etc, etc.

 

The question, though, had nothing to do with profits but with win rate. Whether or not it should also address profits is another issue.

 

A plan and the testing of a plan will not assist us in dealing with the stream of unknown data that the market throws at us every day.

 

Depends on the plan and the basis for the plan.

 

I speak from practical experience.

 

As do I.

 

Sorry for responding to the OP. I should have known better .

 

Db

[wrbtrader 10]

...Please could you provide some more explanation?

 

The ES is retracing, say, and I want to buy this pullback because I think the trend will resume - what are the 10 year notes going to tell me that will help me to time my entry, or decide whether or not to trade?

 

Cheers,

 

BlueHorseshoe

 

Looks like the thread is evolving into intermarket analysis. So you want some clues to trade via swing trades or position trades like some of the big boys ?

[Colonel B 10]

Hi Colonel B,

I find your words very interesting and yes I would appreciate you showing me how to incorporate the 10 year note into my ES intraday trading.

many thanks

 

Sure. Have you ever bought a car? What did you use to to help you decide if you were getting a good deal or not? Did you use a moving adverage? Did you use a stochastic? What do you use to find out if you are over paying for airline tickets? Dojies or wedgies? No chances are you use some corolated market. You go to the Honda dealership and check out what they have and then go to the Toyota dealership and look at what is comparable then you compare price. Same thing with airline tickets. You look at 2 differnt airlines that are leaving and going to the same area and you buy the cheepest. Same thing with the ES or any other market you trade.

 

Now a bit of information on bonds. The ticker symbol is ZN. The 10 year cash opens at a different time. It is about 15.60 per tick. And most of the time is goes in the opposite direction as the ES. At 5 PM -3AM N.Y. time there isn't much going on in those markets most of the time. So don't look to trade it like about to show you at that time. However it could still work at that time. I use a 2 tick stop out on the ZN but some times I have to exit quickly and I hit the market button and get filled for 3. Its just the nature of market orders.

 

So you are looking for structure with in 2 ticks. I am not sure what you use or how you trade but I saw in an earlier post that you look at daily,weekly,monthly levels or highs and lows. Ill basically just use that in my examples so you get the idea. For now just bring what ever you use along and lets see if we can build on it. The thing with the bonds is that they don't trade exactly like the ES. For example the ranges are different. They are opposite but when the ES sells off and the ZN goes up they don't go up in the same amounts. So the ES may sell off 8 ticks where the ZN only rallys 3 ticks. This will become important later.

 

Some times the ES will open close to say the weekly highs. If you are only trading the ES and you see it open close to the weekly high or a range high that it has been trading in for a while you naturally want to short it. Lets say its still a few points above us and we are going to get in right at the high. Now in this scenario a few things can happen which you are aware but lets list a few.

#1 It could open go straight south and have a big sell off. Nothing big, it did what we expected and sold off at resistance but left us with our limit order waiting and we don't get into the trade.

#2 It could rally and just go straight up. Who hasn't had this happen to them?

#3 It could spike up through the resistance say 3 1/2 points then sell off. So you get the direction right but you get stopped out before it goes in your direction. Who hasn't had this happen to them either?

 

These things are common no matter the time frame you trade so how can the 10 year help with this? What if the bonds opened close to a high also? Lets say that around the time when the ES is opening the bonds have rallied a bit and are close to an overnight high, previous day high, or a weekly/range high. If this is the case and you know that the bonds move opposite to the ES one of them is going to break out. Both usually wont rally at the same time. There are rare occasions when this happens but lets say this isn't one of those times. If the bonds start to sell off (should be easier to tell because of the smaller range) then watch out with the ES short because chances are that the ES is going to break out or at least spike. Now the short on the ES might work for a little bit but don't hold it for longer then a few minutes and don't let it go against you (take a scratch) and absolultly don't add.

 

Lets say that the ES is still at its highs close to the open but the bonds are close to a low. However the bonds aren't opening as close to its lows as the ES is opening to its highs. This could be a huge spike tip off. Lets say the bonds want to sell off to the exact number. This happens often on the bonds (remember 2 tick structure). Then there is a good chance people are going to get run over in the ES. Maybe in this situation you wait for it to go through your price and come back. Or maybe you wait for it to go 2 -3 points above the resistance. No harm in that considering we have identified some potential slop at our price. Its the reverse of catching a falling knife. We are selling into the sell off at a certain price. This works really well because we know that there are other players getting long per the break out so we can get filled even on the way back down. As long as the bonds stay above the rejected lows then you should be all good. However there is a chance that the bonds will go through the lows and the ES will go through the highs. This can and does happen as you can imagine but you don't have to wait for a full blow stop out. If it doesn't pay out in 10 secs or less then scratch it. If the bonds hit the bid 3 ticks below then pull the plug on the ES. There are alot of other intuitive things that the ES does to signal that the short isnt going to work but there are lots of tip off in the bonds too.

 

The ES is opening in the middle of a range so no support or resistance close. A few things can happen here as well.

#1 We could chop around

#2 We could go up

#3 We could go down

 

Hard to say what exactly is going to happen and often times its just best to wait and see.

However if the bonds are close to a low and reject then you can eliminate in the ES getting long. This is a big part of the equation because if the bonds are going up then the ES is going down. So if it chops around for a bit you are going to want to get short over getting long. The odds are better that the ES is going to sell off and you are going to want to sell it as close to a what ever high that you can. ESPECIALLY if you see longs get in at the top of the chop. When I see 2000 or more get long in the ES when this is happening I get short and put my 2 tick stop above where that volume got let out. This is more common situation then the previous just because of the nature of the ES. You have every one trying to do the same thing so it cant go. Its so head fakey and this will help with some or most of the head fakeyness depending on what you are using.

[MightyMouse 12]

The question, though, had nothing to do with profits but with win rate. Whether or not it should also address profits is another issue.

 

All that matters is profits.

[Colonel B 10]

My point is that the there are some markets correlated and other markets not correlated. The correlated markets can use the same trade signal strategy and same trading habits (e.g. trading Emini ES or Eurex DJstoxx50 between 0830am - 1100am est). In contrast, markets not correlated can use the same trade signal strategy but not the same trading habits.Thus, the trade results in Emini ES versus Hang Seng HSI futures will be greatly different while using the same trade signal method.

 

. For example, trade signal A produces on average $500 per day while trading Emini ES between 0830am - 1030am est while the same trade signal A produces $1200 per day while trading Hang Seng HSI futures between 1130pm - 0100am est. Therefore, the only reason why that trader will continue trading Emini ES must be due to "personal reasons" (e.g. night time security guard at the hospital that prevents him/her from trading the HSI futures).

 

Yea totally. I think that in actually compared to what I see on this forum I guess trading with correlated markets is I guess its own signal strategy? It doesn't seem that way to me because that is how we all purchase anything retail.

[BlueHorseshoe 10]

Looks like the thread is evolving into intermarket analysis. So you want some clues to trade via swing trades or position trades like some of the big boys ?

 

Hi Wrbtrader,

 

Quite the opposite (confusion was my fault on re-reading) - I used to 'swing trade' (two, three, four day holds) - nicely profitable over 10 months, but rather a rollercoaster on a small account. I'm now trying to develop the methods I used into an approach for daytrading. The 'pullback' scenario I described was hypothetical, not a reference to what the ES is currently doing.

 

As for Colonel B, I just wanted to know whether he was talking claptrap or whether there was more substance to his claims - given his detailed and very helpful post, the latter would seem to be the case. It works for him, so it's probably worth my time to investigate it further.

 

BlueHorseshoe

[johnw 10]

Sure. Have you ever bought a car? ................................................ You have every one trying to do the same thing so it cant go. Its so head fakey and this will help with some or most of the head fakeyness depending on what you are using.

 

gm Colonel B,

 

Many thanks for your efforts and your time.

I will look into ES/ZN relationship over the weekend.

 

However, I would value your opinion on this question .....

 

Given that the vast majority of ES daily volume is traded by Large Players

each of whom have their own system of trading (including no doubt intermarket

correlations) ... these systems clash as you well know.

However, no matter how the Large Boys trade, their trades are going to appear on my price screen as a buy/sell at the ask/bid.

Since trade-able price waves are preceded by congestion or by supply/demand zones,

I now have a trigger and a direction at these occurrences, and so all that remains is to insert a price into an OCO order.

 

So my question is......

'Why would I bother learning what the Big Boys already know'

 

Actually, I would value all opinions from Posters who have pondered on this one.

[gianno 10]

As described Title

I want a strategic win at least 90%

And are not an old thought And be simple and easy and uncomplicated

awaited your responses:helloooo:

 

Read this fresh blog and you see that 90% is a candidate for a reversed system:

 

Developing Mean Reverting Systems with Price Action Lab | Price Action Lab Blog

 

In other words, if you can find one with 90% up to time t, then that is possibly unsustainable in the near future and you can reverse the system and profit.

[MightyMouse 12]

The term Consistent gets thrown around like a cheap suit. I would like to know what some of you guys consider to be consistent when used in conjunction with profit.

 

As far as a strategy that wins 90% of the time, the win/loss targets and tick size, and liquidity of the market you are choosing will have to be considered before you choose to employ such a strategy.

[wrbtrader 10]

...

 

Given that the vast majority of ES daily volume is traded by Large Players

each of whom have their own system of trading (including no doubt intermarket

correlations) ... these systems clash as you well know.

However, no matter how the Large Boys trade, their trades are going to appear on my price screen as a buy/sell at the ask/bid.

Since trade-able price waves are preceded by congestion or by supply/demand zones,

I now have a trigger and a direction at these occurrences, and so all that remains is to insert a price into an OCO order.

 

So my question is......

'Why would I bother learning what the Big Boys already know'

 

Actually, I would value all opinions from Posters who have pondered on this one.

 

Hi,

 

It's very simple. If you believe learning what the Big Boys are doing will not improve your trading...ignore the information. Yet, if you think your trading will improve with such knowledge, research it to see if there's any merits to it for your trading purposes.

 

By the way, its not just the Big Boys. I've seen the same question about other things that's market related.

 

"Why would I bother learning how FED actions impact markets"

 

"Why would I bother learning how Global Crisis impact markets"

[tommot 10]

Why are we wasting time? If the trader asking the question is Jack Francisco, and the search returns - "No such user could be found! : Jack-Francisco"

Explanation?

[goodoboy 10]

As described Title

I want a strategic win at least 90%

And are not an old thought And be simple and easy and uncomplicated

awaited your responses:helloooo:

 

If I had a system that work 90% of time, I would let you know buddy.

 

I think you may have to be like me and just start from the bottom and learning the basic. Find you a method to trade first and go from there. Try DBPhoneix thread or Steve's Basic System thread to get through the basics and figure out how you want to trade.

 

I can't answer your question cause I don't have enough experience to know if a system that works 90% of the time exit. but for myself I am developing a Entry and Trade Management that fit what I like.

[BlueHorseshoe 10]

The term Consistent gets thrown around like a cheap suit. I would like to know what some of you guys consider to be consistent when used in conjunction with profit.

 

 

I like to print out a screenshot of the equity curve and then hold a ruler up against it - if I can tell the EC from the ruler then something's very wrong and I have to start over

 

BlueHorseshoe

[Mr_You 10]

I would like to know what some of you guys consider to be consistent when used in conjunction with profit.

 

Right now I'm only developing automated trading strategies. I'm just about to start forward testing my first strategy on small tick value instrument(s) using real money. It meets the requirements below. Its taken me along time to get here, but my confidence is growing.

 

I've learned from an experienced retail/institutional trader that a usable (consistent) strategy must be profitable across multiple timeframes and multiple instruments and have an equity curve with no major drawdowns (no major cliffs).

 

Meaning it can't be profitable on the 60M timeframe and blowup on a 59M timeframe and it needs to be profitable for ES, 6E, CL, etc.

 

Like BlueHorseshoe says, if there is a perfect diagonal curve then something is wrong.

 

PM me if you want to be pointed to a webinar from the automated trader mentioned above.

[johnw 10]

Hi,

 

It's very simple. If you believe learning what the Big Boys are doing will not improve your trading...ignore the information. Yet, if you think your trading will improve with such knowledge, research it to see if there's any merits to it for your trading purposes.

 

By the way, its not just the Big Boys. I've seen the same question about other things that's market related.

 

"Why would I bother learning how FED actions impact markets"

 

"Why would I bother learning how Global Crisis impact markets"

 

gm wrbtrader

 

I totally agree with your comments and many thanks for posting them.

My post, if you didn't pick it up, was slightly leading, in that I am interested

to know what you have garnered from tracking the Big Boys behaviour and methods.

 

If you would prefer not to share this info for any reason, I quite understand.

[Colonel B 10]

gm wrbtrader

 

I totally agree with your comments and many thanks for posting them.

My post, if you didn't pick it up, was slightly leading, in that I am interested

to know what you have garnered from tracking the Big Boys behavior and methods.

 

If you would prefer not to share this info for any reason, I quite understand.

 

My bad John. From your last post I thought you were saying that you were NOT interested in trading like the big boys. Hard for me to tell in text what people mean sometimes.

 

In any event all that stuff I posted is how firm traders trade. There are slight variations but basically those are the main parts. If you got a B.S. in finance from a real 4 year university and went to Chicago or New York and started to trade for a large bank or a large firm then this is most likely what you will learn to trade the ES.

[windsurfer 10]

I traded a system with more than 90% wins. I sold GC call and put options 120 points OTM. I averaged $500/day with it. It averaged this 60 days in a row. Then, the day of the European debt crisis, this happened overnight:

 

"Gold prices exploded Wednesday-posting the biggest one-day gain ever in dollar terms-as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying. Gold for December delivery rose $90.40."

 

I lost $40k that morning.

 

btw, I still trade something like this system (I've built in offsets), but don't advise that anyone else do it.

 

Bottom line:

 

Percent wins is a ridiculous test. You need to know the net profit, but also the drawdown.*

 

Good luck!

 

==

 

* In my case, the drawdown was bearable, although on that day, it was double the maximum my testing had indicated could happen. (which leads to another learning).

[steve46 12]

I traded a system with more than 90% wins. I sold GC call and put options 120 points OTM. I averaged $500/day with it. It averaged this 60 days in a row. Then, the day of the European debt crisis, this happened overnight:

 

"Gold prices exploded Wednesday-posting the biggest one-day gain ever in dollar terms-as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying. Gold for December delivery rose $90.40."

 

I lost $40k that morning.

 

btw, I still trade something like this system (I've built in offsets), but don't advise that anyone else do it.

 

Bottom line:

 

Percent wins is a ridiculous test. You need to know the net profit, but also the drawdown.*

 

Good luck!

 

==

 

* In my case, the drawdown was bearable, although on that day, it was double the maximum my testing had indicated could happen. (which leads to another learning).

 

 

Finally some common sense....for the gentleman posting, I was taught to figure about 1.5-2x the expected system drawdown as a "realistic" figure....which could be expected to occur at any point in time.....cash on hand had to be above that line in the sand at all times....until recently I maintained that amount on deposit with my broker in bonds...

[gianno 10]

I traded a system with more than 90% wins. I sold GC call and put options 120 points OTM. I averaged $500/day with it. It averaged this 60 days in a row. Then, the day of the European debt crisis, this happened overnight:

 

"Gold prices exploded Wednesday-posting the biggest one-day gain ever in dollar terms-as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying. Gold for December delivery rose $90.40."

 

I lost $40k that morning.

 

btw, I still trade something like this system (I've built in offsets), but don't advise that anyone else do it.

 

Bottom line:

 

Percent wins is a ridiculous test. You need to know the net profit, but also the drawdown.*

 

Good luck!

 

==

 

* In my case, the drawdown was bearable, although on that day, it was double the maximum my testing had indicated could happen. (which leads to another learning).

 

Thanks for a good, honest and informative post.

[mickro 10]

Percent wins is a ridiculous test. You need to know the net profit, but also the drawdown.*

 

Agree.

 

 

Seriously, who cares about percentages?... You shouldn't.

 

Are you trading to make money, or win a lot of trades? .... THEY ARE NOT THE SAME THING!

[Obsidian 10]

I traded a system with more than 90% wins. I sold GC call and put options 120 points OTM. I averaged $500/day with it. It averaged this 60 days in a row. Then, the day of the European debt crisis, this happened overnight:

 

"Gold prices exploded Wednesday-posting the biggest one-day gain ever in dollar terms-as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying. Gold for December delivery rose $90.40."

 

I lost $40k that morning.

 

btw, I still trade something like this system (I've built in offsets), but don't advise that anyone else do it.

 

Bottom line:

 

Percent wins is a ridiculous test. You need to know the net profit, but also the drawdown.*

 

Good luck!

 

==

 

* In my case, the drawdown was bearable, although on that day, it was double the maximum my testing had indicated could happen. (which leads to another learning).

 

I guess all traders who stayed long time in the markets had such bitter experiences. This is something you can't learn from books.

[SIUYA 11]

I guess all traders who stayed long time in the markets had such bitter experiences. This is something you can't learn from books.

 

actually you can.....

it is repeated time and time and time again.

 

It is often referred to as picking up pennies in front of steamrollers - at some stage you trip and get taken out.

Selling options is certainly one way to do this......and no matter how many times people are told this, they will still choose to ignore it.

(not to say selling options is not a valid strategy - however you have to expect hiccups, and if you dont then it wont matter how many times you read it - you are living in denial)

[Raleigh Lee 10]

I can show you a lot of strategies that win 90% of the time, but they don't make money. A good, solid system that has a positive expectation of .5 or better usually wins 45% - 65% of the time - no more.

[Obsidian 10]

actually you can.....

it is repeated time and time and time again.

 

It is often referred to as picking up pennies in front of steamrollers - at some stage you trip and get taken out.

Selling options is certainly one way to do this......and no matter how many times people are told this, they will still choose to ignore it.

(not to say selling options is not a valid strategy - however you have to expect hiccups, and if you dont then it wont matter how many times you read it - you are living in denial)

 

of course "learning" and "applying" are different things...we tend to forget what we read. but once that mistake teaches you a "good" lesson, you be careful next time

[SpecTrade 10]

As described Title

I want a strategic win at least 90%

And are not an old thought And be simple and easy and uncomplicated

awaited your responses:helloooo:

 

At least 90%? Of the time or 90% profit per...what? Year? Month? Week? 5 years?

 

helloooo :crap:

 

And I want a platinum Xmas tree from a scarlet Santa. And under the tree i want 3 gifts: Porsche, Merc, and Jaguar. And each gift wrapped in thick golden (physical) paper. And in each car i want 2 hot chicks singing not necessarily carols ("and are not too old though"). And with these chicks all at once I want nice relationships ("simple and easy and uncomplicated"). And each chick must be holding 10million dollars on a sliver (physical) plate. oh, oh, and I "awaited" no "responses" from tax dpt.

 

Yes, I am a sarcastic bastard when it comes to sarcastic (or stupid) requests from kids. :helloooo: