[Dogpile]

waveslide, we should chat a bit more --- I really like this method and sounds like you may have been down the same road as me before you arrived at this...

<<I have an entry method that statistically and logically works. I use discretion, looking at various things to bias myself direction-wise, then use a non-quantitative method of exit that is dictated by the market's reaction to my entry.>>

I would love it if you had time to discuss an example of a trade you did with a few points about what made your 'bias' -- the real important part... but also, what your entry method was... I don't mind chatting about this publicly ( in this forum) if you don't... its really not like some giant institution can possibly emulate our strategies...

[Dogpile]

another nice thing about having a mechanical short-term strategy is that you have a daily benchmark to outperform. you can see the signals it generated and see which ones you took and which ones you didn't and why... you also see when a mechanical trigger is about to go off and have to time to think, do I want to take this signal or not? does the higher timeframe technical structure favor taking this trade? is the location favorable relative to the support/resistance you have identified? is it a really choice set-up consistent with a full-size position or do you see a few reasons for concern and should only take a smaller position? or is the set-up really pretty balanced with no edge whatsoever??

Friday was an example of a difficult day to trade in my opinion... my strategies did not do well on Friday after having perfect signals on thursday. you can see how Friday was not really a good 2-way market. good traders, whether bullish or bearish, had plenty of opportunities to make good money on thursday. I made money on both days but underperfomed my ('dumbed-down') mechanical strategies on Thursday and outperformed on Friday (though I didn't make much on Friday, it was a green day). if I summed the 2 days together, my (single-timeframe) simple mech strategies were basically back to breakeven by the end of Friday...

[darthtrader]

really interesting ideas, please don't take this conversation private.

sounds like a great way to get the best of all worlds trading wise, i had never really thought of things in this way.

dogpile, i take it then that while you will cancel a trade based on the mechanical entry you won't enter without it?

[Dogpile]

<<dogpile, i take it then that while you will cancel a trade based on the mechanical entry you won't enter without it?>>

right. I could try to figure how to program all the usual support/resistance pivots I follow into the strategy and test it --- but I am really a 'pattern guy' so I prefer to have a really simple entry strategy (Keep It Simple doctrine) and try to think hard about the pattern and the 'location' of the trade rather than stick a bunch of filters into the program and have all these offsetting forces in there potentially screwing it up....

I am a believer in finding an indicator that really 'speaks to you' --- something that fits your personality and your style... and most importantly, something that keeps you out of trouble.

[walterw]

Originally Posted by Dogpile »

<<dogpile, i take it then that while you will cancel a trade based on the mechanical entry you won't enter without it?>>

right. I could try to figure how to program all the usual support/resistance pivots I follow into the strategy and test it --- but I am really a 'pattern guy' so I prefer to have a really simple entry strategy (Keep It Simple doctrine) and try to think hard about the pattern and the 'location' of the trade rather than stick a bunch of filters into the program and have all these offsetting forces in there potentially screwing it up....

I am a believer in finding an indicator that really 'speaks to you' --- something that fits your personality and your style... and most importantly, something that keeps you out of trouble.

Wise, wise wise....

[waveslider]

To me, any entry approach that offers :

1. a good number of trades
2. participation in most (all) major moves
3. a good risk/reward profile

is valid for use.

Stand alone, any single time frame mechanical strategy (that we as individual traders are capable of following) is not likely to be successful in the long term.

What brings the odds into the discretionary trader's favor is bias, and I see the most important bias in the higher time frames. Why? Because of what old Newton said, "an object in motion tends to remain in motion". In trading this would mean "a market in a range will tend to remain in a range" or "a trending market will tend to remain trending". Take this information from the higher time frame and bias your entries on the lower time frame.

Dogpile, your parabolic system is just as good as any. If you were on friday to see on the higher time frames a range, or a downward trend, and bias your trades to the short side only, I'm sure the approach would have been successful.

So this is the double edge sword - back to the topic of the thread. By biasing you are manipulating the results of the mechanical system.

The challenge to discretionary traders is to see objectively and recognize things the computer may not. As many have said before, trading is an art more than a science. This is a skill that must be developed and practiced, an understanding must be developed of how markets demonstrate who is in control.

I believe there are some very successful systems out there that trade 100% mechanically, but I don't think they will be as robust over the longer term as the skilled human mind.

Personally I prefer to use just basic trendline analysis. Something as simple as this is really all you need. The way it leads to profitability is through discipline and consistency. The lack of these 2 traits is the true disadvantage to discretionary trading.

ws

[Dogpile]

<<Personally I prefer to use just basic trendline analysis. Something as simple as this is really all you need. The way it leads to profitability is through discipline and consistency. The lack of these 2 traits is the true disadvantage to discretionary trading.>>

yes, I can see how trendlines would make sense. nice thing about trendlines is that you will never get caught fighting a strong move as the entries will simply not trigger when this is the case.

would like to see a recent example of what kind of trendlines you are talking about? can you post a chart with an example of an entry? I would be interested in experimenting with drawn trendlines on YM

[waveslider]

I'll start a new thread..