[mitsubishi]

Here is a new idea i'm working on at the moment.All input is welcome.
I think the basic idea lends itself well to many styles of trading with plenty of scope to develop your own rules.A couple of charts to kick off.

[pbylina]

Hows it going so far?

[MightyMouse]

Originally Posted by mitsubishi »

Here is a new idea i'm working on at the moment.All input is welcome.
I think the basic idea lends itself well to many styles of trading with plenty of scope to develop your own rules.A couple of charts to kick off.

You might want to read the Taylor Trading Technique. It involves a 3 day cycle and has plenty rules. It seems similar to what you are attempting.

[mitsubishi]

Originally Posted by pbylina »

Hows it going so far?

You want the absolute truth? Simple is best.This thread is about the right side.I cannot beat discretionary trading.I done my 10k hours and the result is my subconscious is a far better trader than i am.If generally,you are on 'the right side' of the market,exact entries/exits are relegated below money management.Basically i don't look to win every battle,i look to win each campaign.
I saw 'Panorama' the other night.It was a doc investigating whether the banks had learned the lessons of the recent past. People dont trust financial advisors anymore and there was a woman interviewed who told us she was managing her own investments well enough to earn a living from home.'actually,you get a feel for the markets after a while'
Doesn't mean she wont blow up next week,but if she can avoid buying any books,paying for seminars or spending 10k hours mucking about with indicators,she'll probably be a better trader than 90% of the members of trading forums.
In a league of one you are number one.
Here's why trading is so difficult to learn:
INFORMATION OVERLOAD.

[mitsubishi]

Originally Posted by MightyMouse »

You might want to read the Taylor Trading Technique. It involves a 3 day cycle and has plenty rules. It seems similar to what you are attempting.

I did read it last year.I did get something from that,i like the basic idea.Anything will work if you are on the right side of the market.That's the point i want to make in this thread.
The problem is most traders want an identifiable setup/trigger with tight stops and small targets.For most that will mean death by a 1000 cuts.As Livermore said it is no trick to be right on a market..sittin tight is what makes money.Taylor has it right the basic idea .You attempt to sell/short sell the upswings and buy/cover the downswings.That is the natural rythmn/cycle of markets.The problems start as soon as you try to apply a set of rules to any strategy.This is where your 10k hrs goes.This is where the probability of driving yourself nuts is quite high.By default probably,you've watched the market so intensely and for so long that your instinct is better than any setup.How many traders tell us i have rules but i know when to break them? I know this particular setup wont work today?.
That is instinct,experience, whatever.So if you have that,then you probably dont need a mechanical system.
So really your only problem is at any given time knowing which is the right side and at what points you should be long short or flat.You dont need to time it perfectly-that gets better over time.Whereas beginners focus on perfect setups,being undercapitalised gives you too little leeway.
So i took from the book what i needed but i dont worry about identifying a 3 day cycle or 5 day cycle or 13 hour cycle.

[Tradewinds]

Your second chart states:

"Repair the sequence as soon as possible after a false signal."

Do you have rules for confirmation and/or failure of a signal? If so, I'm interested in what the criteria are.

[mitsubishi]

Originally Posted by Tradewinds »

Your second chart states:

"Repair the sequence as soon as possible after a false signal."

Do you have rules for confirmation and/or failure of a signal? If so, I'm interested in what the criteria are.

Well your tag line regarding precision is at odds with my approach if you read my prev 2 posts.So the short answer is no.
In fact, i would guess you would be far better at devising a set of rules and sticking to them than me.I pretty much have given up on rule based /mechanical systems.What do you want a rule to do for you?- tell you exactly when to enter/exit?
I already know the price zone i want to enter/exit before the market opens.
Protect you from loss?
I will know when my trade is wrong and act accordingly
The parameters for deciding where these zones are reliable or invalidated depend on the market;range volatility etc.
What i'm suggesting is that there is a possibility that mechanical systems will ultimately underperform and in many cases reqiure constant modification/fail altogether.Well in my hands they will anyway

[mitsubishi]

I'll take another stab at answering your question.To give this some context regarding the idea illustrated in the charts,any idea/strategy i design doesn't need a complex set of rules.Thats the beauty of the basic idea.Its based on simple observation.In the first instance- observation of the past.Let's take that first.
If on monday the market opens up what will you do? Based on past observation there are only 5 scenarios possible.
Assume the trend (right side) is long:

1- Mon-gap up and go day in which case the low is made first.
If i am already long from prev day i will take profit right now and i am done today.
if i have no position i will wait for a low made first on tues to buy if the trend is still long.If we closed at or near the high prev day i would have closed out most of my position and i'm closing the rest on this gap up.The beauty is the market has gifted me so there is no need to figure out how the rest of the day plays out and risk giving a penny back,if it spends rest of day reversing off this high (scenario-2) The system has inbuilt protection and decision making is purely based on what the market offers.The result tends to be less losing trades in exchange for being flat more often.It's also designed to prevent you buying highs and selling lows

3-Tues- If mon was a gap and go day and tues opens up i would short a resistance level
for countertrend trade if my instinct tells me there is weakness at this point.I would be aiming for the gap to close and no further.But i would prefer to buy a low.I would never ave
into a short position but i'm happy to scale into longs.My shorts are always smaller than longs in a long trend.My experience is i tend to lose on the short side more than long.If this 3rd scenario plays out (open up/reverse closing gap/continuation of long trend) i can buy around the gap close for a continuation of the main trend otherwise scenario 2 is playing out and as soon as i think that is the case i will get stopped out.In this scenario i will have 1 profit 1 loss Obviously if i shorted in scenario 1 thats a losing trade -but it will always come back to being long in an uptrend,attempting to stay on the right side.

4) Weds- market opens flat and spends day consolidating .If i am already holding a profit i will take it as soon as i spot its a consolidation day.If i opened a trade today,again i will close it if its going nowhere .I aim to be neutral in consolidation areas. Otherwise i am forced to watch the market all day,and i'd rather not these days.

5) Thurs- flat/mixed open,trend develops later in day.This is the hardest type of day for me
and the most discretionary.The overiding factor is whether i am already holding from prev day.Either i've decided its a consolidation and i'm out before trend develops or i'm lucky and i'm on the right side when it breaks out.Or i've entered early if market went briefly in red and luckily i catch the breakout.If that happens i want to hold more (if not all) of my position after the close than i did in scenario 1. In scenario 5 the market shows its hand when it takes out either the opening range high/low.If i am long and it takes out opening range low that's an exit signal.

Reverse all the above in a downtrend.ie sell rallies:attempt to sell highs made first,cover at lows made first

Now,you might surmise from this that,actually i am using a set of rules and maybe that's true.But there is no spaghetti on my chart,no trendlines not even candles.As far as technicals go- simple horizontal lines marked where resistance has become support (or vice versa) on a line chart.
Also,i have no rules on what is a profit target/stoploss-it's discretionary.Time is an important factor rather than just price.
So using the above system i would not be looking to drill down to the 1min chart waiting for an oscillator or ma crossover etc to signal an entry for example.
I'm sure if we both traded this for a week starting on mon our entries/exits results would be very different,which is what would happen even if we had precision rules in place.
Bottom line is you maybe want precision and i am content to paint in broad strokes-and we all tend to gravitate to our comfort zones.