Five Tick Trading

[swansjr]

I coded up the basics (I did not include every rule discussed in the manual since my purpose was more a prototype or proof-of-concept. Maybe this is not entirely fair to the setup. Anyway...) of the 5-tick system in tradestation and back tested it and was not happy with the results. With the "small" profit target it appeared to be difficult to overcome slippage and commissions not to mention overcoming losing trades. I'll dig up the results and post them soon.

In short, if the basic concept does not test well as an automated system, I don't trade it. However, maybe I should post the code so much brighter programmers can fill in the blanks and/or improve upon the code. Perhaps another filter added to the system will help turn this counter trend strategy into something a little more appealing.

Jeff

[OAC]

	Quote:	swansjr
	Walter, Could you elaborate on your statement, below? In short, what is an M type false break setup? Jeff

http://www.traderslaboratory.com/for...rade-1994.html

also known as the Gotcha trade.

[markw]

The setup is similar to Woodies CCI old setup called hook from extreme. The setup was entry on the passing the 200 line and hooking back across the 200 line. When Woodies room recently switched to range bar charts some testing by room members was done but proved not to be profitable. You can google for the old woodie cci manual

[walterw]

	Quote:	markw
	The setup is similar to Woodies CCI old setup called hook from extreme. The setup was entry on the passing the 200 line and hooking back across the 200 line. When Woodies room recently switched to range bar charts some testing by room members was done but proved not to be profitable. You can google for the old woodie cci manual

As all setups, they will work 50/50 depending on market climate (congestion/trending) , thats why understanding market climate is the key skill to any trader... cheers Walter.

[walterw]

	Quote:	walterw
	As all setups, they will work 50/50 depending on market climate (congestion/trending) , thats why understanding market climate is the key skill to any trader... cheers Walter.

For example, take a look at a forex chart right now, you will notice some congestion on the eur/usd.... at 8:15 PM bernie will speak, and most probably the climate will become trend and momentum...

[momentom]

I think that the concept behind this "system" is that you only trade in the first hour or so after the RTH market opens while the market is finding its balance. It is at these times that the countertrend trades have the highest probability of success.

[Trader333]

Why would they not have success at say 2pm EST when the market normally takes off again ? The principle is that in any market at some point there will be a retrace and catching it can give a quick few points of profit. It is almost a micro momentum system and I can see that it should be just as effective at any time that it is used.


Paul

[ztrader]

	Quote:	walterw
	For example, take a look at a forex chart right now, you will notice some congestion on the eur/usd.... at 8:15 PM bernie will speak, and most probably the climate will become trend and momentum...

EURUSD got cloudy an hour or so before the US market open and the temperature drop for some 90-100+ pips. Uncle Bernie can do his show tonight and we'll just see and trade how it shows on the chart tomorrow.

ENJOY!

ztrader

[walterw]

and Bernies aftermath...





cheers, The Chimp.

[walterw]

and when the weakness is gone my fxmm 30 starts to make nice divergence... that means we will probably refresh back to mid band...




cheers Walter.