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drm7
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Posts posted by drm7
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I currently have a full-time job as an engineer and would like to consider position trading on a longer time frame. I plan on using the daily charts mainly for my analysis. Does anyone know what type of trading strategy I should start studying?I would appreciate any comments and advices. Thanks in advance.
Regards,
Chris
Depends a lot on some specific factors:
1. Equities, futures, forex?
2. Amount of captial?
3. Risk tolerance?
If you have at least $100,000, you can look into some trendfollowing systems on futures/forex. Seemingly simplistic systems like MA crossovers can make a lot of money over time, if you are diversified and can handle drawdowns. If you have less capital, you can trade ETFs and/or forex (Oanda allows trade sizes as low as $1.)
Books that were helpful to me:
Market Wizards, by Jack Schwager
Trade your Way to Financial Freedom, by Van Tharp
Way of the Turtle, by Curtis Faith
These books should get you started.
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This morning's trades. EUR/USD spot, 1m, 34EMA.34EMA seems like an unusual number. How did you come up with that?
Also, where did you close out your trades? Do you have fixed profit targets?
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Exits:
Stop placed just outside of entry bar.
Profit target 2x ATR of current time frame.
(Optional - needs more work) move stop to breakeven on 1 to 1.5x ATR move in your favor.
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A couple of good opportunities on the ES 5 minute. CL was also good on the 1 minute chart, if you were selective and waited for a rejection of the 100 EMA.
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How do you find it compared to Trading Blox? The Blox "Builder" version seems to have similar functionality at a lower price. However, I'm not up to date on the latest and greatest version of Mechanica (didn't it used to be called Trading Recipes?), so I may be talking out of school.
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Exits.Any other ideas for exits?
Disclaimer: NOT trading live at this time
I'm pretty early in this process, but what seems to work is an initial stop loss one tick below/(above) the entry bar for a long/(short) position entered one tick above/(below) the signal bar.
The profit target would be a limit order 2 ATRs above/(below) the entry point (your choice between the trigger point or the actual fill point.)
Another optional rule would be to move stop to breakeven on a 1 to 1.5 ATR move. My eyeball testing shows this to save many, many losing trades without cutting into nearly as many winners.
Size your positions based on 1 ATR.
ATR defined as a 14 bar EMA of the last 14 high-low. Your platform most likely has this as a built-in indicator.
What you'll find is that you won't capture the "epic" moves, but your win % should stay around 50%. If you use 5 min or 1 min bars, you get several trades per day.
A consistent 50% win rate with a 1.8/1 (don't forget commissions/slippage) return/risk ratio and 2-3 trades per day would result in pretty huge gains in a year.
I'll try to post some screenshots next week to see how this system performs. It would have made huge $$ on Friday in CL or ES, but Friday was an ideal day.
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I agree, this is an excellent thread. It's been tough finding an intraday setup that doesn't have you trading the noise. I think the best aspect of this type of trade is that it limits you to a few, "high-powered" trades per day.
From my experience, you can almost always find 2 or 3 great trade entries at the EMA almost every day. Problem is, like with any method, there are also entries that either get run over and/or turn out to be losers. Though I'm still trying to get consistently profitable with this method, I believe there really is an edge here. Maybe it just takes time to develop a feel for what entries to take, and which ones to avoid?
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Regarding your particular version of this setup (100 min EMA), a one minute chart should give you ample opportunity to look for confirmation rather than just entering a buy limit at the EMA. Enter on a stop at the high of the candle that pierced the EMA or something like that.
Also - this is a more general comment - the willingness to scratch trades may also help profitability. If the trade goes, say, 50% to 75% of the way to your profit target move your stop to breakeven. If you scratch, then just wait for the next opportunity.
One of the best price action traders I've seen is NoDoji on EliteTrader. She uses similar setups and scratches an ungodly number of trades every day. (I think she did 20 in a row one day.) She is also profitable almost every day.
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I think SierraCharts has a sim and/or market replay mode. You can sign up for a free trial and see if it fits you needs. I've never used it, but I remember seeing something about it when I researched it.
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9:30am to 4:00pm, Eastern U.S. time. There is no liquidity after hours (unlike the ES). Sometimes, an economic report comes out at 8:30am, which will bring in some volume.
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Do you currently trade futures? Many brokers have Market Profile as an indicator in their charting packages. Third-party data providers (ESignal, IQFeed, etc.) have it as an add-on to their service.
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Open Ecry has a pretty good demo platform. They have their own feed, so you can review past charts (to some limit.)
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Do you have a business relationship with protrader? You have a similar post on Elitetrader and I suspect you are a hired shill.
Any Bond Futures Traders Around?
in Day Trading and Scalping
Posted
In this environment, longer-term bonds (10, 30 years) are inversely correlated with equities (ES, YM, NQ).