[edabreu]

Currently I am using a mechanical system. What is does is generate a buy or sell signal, and I chose when or if to enter into a trade. Since I have not taken that last step (left it to place the trades for me) then I think it falls under the heading of mechanical. Would a rule based indicator trade signal that the trader would enter into at their discretion be the same thing?

If it were totally automated, then it would fire the signal and place the trade for me.

The auto scalper system (that's what we call it) is currently about 85%. Its a scalper, so the targets are close - 1, 1.25, 1.75 points on the S&P. I don't trade 3 contracts with it, so for me its a true scalper - 1 point all in all out. The stop is 2.5 points, but in the back testing stats, 85% average negated the occasional full stop out. What's unique is that if it starts to move against you, you can get out before a full stop out (which I often do) and so keep it the stops to about 2 points.

It's not my system, but so far it has performed extremely well in real market trading.

There are a few real market tested systems out there that have performed well consistently, and I have read about them in Futures Truth magazine. The BWT Zones is the main one that comes to mind. It is still in use today.

I am discovering (in my research) that the best automated systems are NOT for sale. They are leased, and run either through strategy runner or some other automatic trade entry software at the broker's host site, and the cost is x amount per contract traded.

[bakrob99]

Originally Posted by edabreu »

The auto scalper system (that's what we call it) is currently about 85%. Its a scalper, so the targets are close - 1, 1.25, 1.75 points on the S&P. I don't trade 3 contracts with it, so for me its a true scalper - 1 point all in all out. The stop is 2.5 points, but in the back testing stats, 85% average negated the occasional full stop out. What's unique is that if it starts to move against you, you can get out before a full stop out (which I often do) and so keep it the stops to about 2 points.

I tried to develop a winning strategy which "scalped" the market - and spent a year doing it... only to realize that scalping was NOT the way to go. A forum poster suggested to me that I trade fewer times and try to get a bigger move. I changed my strategies to concentrate on getting in a move, taking the 1st target off at 13 ticks ES ( which is greater than the stop amount) and moving the stoploss to break even. Then let it run.

That works well for me.

Good luck with the scalping. Frankly - I don't believe you will be able to oversome the costs of slippage, commission and the occasional really bad exit.

Here's another way to look at it. My real profit comes from about 15-20% of the trades, the old 80/20 rule. And the 2nd hald has to run. I mean really let it run. Exit at the close (or 15:40 which proves best for me on the ES).

This runner accounts for all the profit. It earns $2000 - $4000 per month on the ES trading 2 contract. Every month.

But you need an entry which has at least the possibility of getting into a major move. And there are only (usually) 2 of them per day. So don't trade too often. I limit my strat to 2 trades per day.

Use a chart which is a longer timeframe. Forget about 1 minute or 89 ticks... etc... Try a longer time frame.

I have a strat which runs on a 15 minute chart and takes 1 trade per day some days. It is up a little over $25000 on the ES this past year trading 2 contract.

All of these strategies have one thing in common. Their 1st target is greater than their stop loss. And their 2nd target is a lot bigger.