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brownsfan019

"Borrowing" trade signals

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I'm with Pivot on this one - I'm only interested in my best setups. I also know that the setups that I trade will be there daily, so I'm not concerned with if/when they show.

 

I can see the concern however if your 'best' setup only appears a few times a week or month. That could be difficult to stick to and be the only thing you trade, even though it's the 'best'. But in a pure daytrading setup, I would think that signals would/should appear daily. Of those, I am only interested in the best of the best and willing to go heavier on those trades vs. trading less contracts on a setup that *might* work.

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A lot of talk to rationalize something so simple. Occam's Razor, perhaps?

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A lot of talk to rationalize something so simple. Occam's Razor, perhaps?

 

Simply, keep doing whatever is working especially if its proven in backtesting and real money trading.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

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I'm sorry guys, I really did not expect this thread to get so complex and such. I was just curious how/if other traders use charts of highly correlated markets to trade.

 

My apologies that it dragged out.

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I'm sorry guys, I really did not expect this thread to get so complex and such. I was just curious how/if other traders use charts of highly correlated markets to trade.

 

My apologies that it dragged out.

 

Hi brownsfan019,

 

My apologies for getting off topic and the other discussion has concluded.

 

Getting back to your question when you asked the following...

 

For those that trade multiple markets, do you exclusively look for your setups on each respective market or do you initiate a position if one of your correlated markets shows a trade?

 

As I mention before, I've traded this way in the past and backtested it.

 

It's a very profitable way to trade but requires a lot more work.

 

In fact, it was more profitable than when I was only trading just one trading instrument.

 

The backtesting showed such and the real money trading showed such.

 

What turned me off from it was that it was too stressful and overwhelming at times.

 

I remember telling other traders at the time that by 11am est I was done trading for the day because I was mentally exhausted from this type of trading.

 

However, here's the key, I was doing it all manually without any fancy order system.

 

That's the reason why I eventually settle on sister trading.

 

It's much easier for me to watch multiple markets to help with trades in the particular one trading instrument I'm trading in comparison to actually placing trades in multiple correlated markets.

 

Yet, maybe trading multiple markets at the same time via the same trading stle (ex. daytrading) it wouldn't have been as stressful nor overwhelming if such can be more automated via something like when a trade is initiated in ES for example...

 

It automatically opens a position in the other trading instruments that has been checked for such.

 

It'll be interesting to know if anybody knows a trading platform or add-on that allows for such a trade execution and I admit that at the time when I was trading multiple markets at the same time...I didn't look for such a trading platform.

 

Also, getting back to sister trading...I mainly due it now when I'm concentrating on one pattern signal for whatever reason and if that pattern signal has a low frequency for appearance.

 

For example, you know a lot about the Bullish White Hammer pattern from the Trading Hammer's (revisited) thread.

 

I know some traders that exclusively trades that and nothing else.

 

However, their trading instrument only produces 1-3 daytrading pattern signals per week.

 

Well, that's ok if that's the type of trading you want to do.

 

Yet, if your looking to be more active in trading Bullish White Hammer patterns...you need to do one or several of the following:

 

[*] Follow more than one chart interval and this requires having more than one monitor.

 

 

[*] I've documented over a dozen different types (sub-groups) of Bullish White Hammer patterns and only a few of them are reliable.

 

Therefore, trade more than one type of Bullish White Hammer pattern.

 

 

[*] Your fortunate to be trading with other traders that uses the same pattern signal...

 

Each trader has the task of monitoring a specific correlated trading instrument via a different chart interval in comparison to the other traders in the office.

 

A lot of trust is involved here and this solution works because I did such for three years very profitably when I lived in Seattle, WA.

 

Yet, we weren't trading Hammer patterns and we were trading a different pattern signal that appeared a little more frequently.

 

 

[*] Follow other markets that are highly correlated with your trading instrument.

 

You can either follow other futures, indexes, inverted price actions et cetera.

 

For example, I know one trader that only trades Bullish White Hammers in NQ Emini Futures.

 

He monitors closely the NDX.X Index, Nasdaq Composite Index and Nasdaq Advance Decline Lines.

 

In comparoson, another trader that trades only NQ Emini Futures and that exclusively trades Bullish White Hammer patterns...

 

She monitors, ES/YM/DAX/QQQQ and NDX.X Index

 

[/List]

 

This increases the frequency of the Bullish White Hammer pattern appearences so that a day trader can be getting 1-3 trade signals per day in comparison to only following your trading instrument to get 1-3 trade signals per week.

 

Therefore, sister trading, has many advantages if when trading a pattern signal that doesn't appear as often as you want it to.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

 

"Volatility Analysis opens the door to consistent profits."

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Mark - great reply once again!

 

I think you summed it up - taking one setup and utilizing it on multiple correlated markets can be very profitable. It will also be stressful and require quick execution. For me, that works. I actually enjoy this much more than picking one and staring at that one chart. And as I mentioned, you can actually make MORE money on the trades where you borrowed the signal simply due to your entry price sometimes being much more favorable b/c you did not have to wait for something to confirm. Don't get me wrong, you need confirmation somewhere.

 

As for a trading platform that can do this, I haven't found one either. The best I have been told is to write or pay a programming guy to 'talk' to the trading software to do what you want. The other way to do this would be use of hot keys - where you just hit F1 and something happens based on what you program. That would be an easy workaround.

 

I'm still debating on whether T4 is going to be best for me in this situation to be honest. I love the platform but it has limitations just like anything I guess. I'm wondering if XTrader could handle something like this. Maybe even Ninja. I'll have to contact Mirus and see what they think.

 

If anyone knows of software the allows you to create hot keys or something along those lines, please let us know!

 

Thanks!

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On complexity and stress.

 

A friend of mine was trading one market using market profile and market delta. This is a complex setup with few trades.

 

He's dropped that and moved to an indicator mediated pullback and divergence style of trading that has no premarket analysis and little to watch during markets.

 

He's successful with both. The change means he can do the same amount of work/stress dealing with 6 markets that he previously had on 1 market. The signals have a lower reliability/expectancy but there are a lot more of them to make up for it. Less stress in this case.

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