Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

carltonp

Please Comment On My New Strategy

Recommended Posts

Hello Traders,

 

I have been working on trading strategy that I have been paper trading for a while. I will attempt to explain it in as much detail as I can - if I forget to add some crucial information let me know.

 

Let me start by saying the overall trading style is based on comparative relative analysis.

 

I'm going to first provide some of the detail in bullet point then elaborate.

 

  • I'm trading YM.
  • I am using the components of the Nasdaq 100 for comparative analysis.
  • I use On Balance Volume and Advance / Decline of the 100 stocks mentioned above.
  • I trade on 2 minute interval.
  • I have programmed the stocks into Excel.

 

Now I will explain how I use the information and Excel.

 

As I'm sure you're aware at this stage that I use the 100 stocks to assess the likely direction of YM.

 

The data from the stocks are fed into Excel.

 

I have programmed Excel to compare the OBV values over two intervals - in this case two minutes. So, lets say the value of the OBV for a particular stock was 100 and the price was 20 at the end of one minute. Now, during the following minute Excel would compare the OBV and Price of the stock and if both OBV and Price were increasing for that particular stock Excel would add it to a table. Excel would do that for all 100 stocks individually and if say 85 of the 100 were increasing in both OBV and Price I would use that as indication as to where I think the YM might be going.

 

I have used the same calculation that is used for the NYSE Tick for the 100 stocks. So at any time I can see how many stocks are trading on an uptick vs how many are trading on a down tick over a two minute period. Again, this is achieved by programming Excel to compare stocks trading on an uptick and downtick over a two minute interval.

 

What is a little more tricky is programming Excel to alert me when the price of YM has remained stagnant for 3 seconds. I have no reason why I chose three seconds - it just seemed like a good number to make a decision if the stock has remained at a certain price level for three seconds or more.

 

 

So that is what is set up, now for my style.

 

If say 85 or more of the stocks are increasing in both OBV and Price there will be a pullback. Sometimes the pullback will turn into full reversal, but 8 - 10 times no matter how strong the move there will be some form of pullback/reversal. I won't actually place a trade on YM when I pullback is identified on the chart but I will only trade a pullback when the pullback is accompanied with an increase in OBV and Price on the stocks in my spreadsheet (to be honest I only use a chart for visual affect, not for actual trading)

 

Now once I've decided that the pullback is in full affect as described above I wait to see at what price YM has remained stagnant and how many times it has remained stagnant at a certain price. Let me give you an example:

 

  1. Pullback is in full effect.
  2. OBV and Price on stocks are going in the direction of the pullback.
  3. YM has remained stagnant at say 11000 for three seconds.
  4. After three seconds, the price has moved in the direction of the pullback or the direction of the OBV on stocks and is now 11002 and stays a further three seconds at 11002.
  5. The price then moves to 11004.
  6. I will then place a trade at 11004.

 

While all this is happening the direction of OBV and Price for the stocks are either moving in the direction of the pullback or the price of YM.

 

My exits are far simpler, but we can get into that another time.

 

I'm really sorry for the very long explanation but I think if I want decent feedback then I should provide as much information as possible.

 

It has been suggested that I forget about charts completely I use T&S. I've never used T&S but will learn if more people suggest its the way to go.

 

I'm sure there are aspects that I have missed, but just ask me any questions you like. I just need good honest feedback and suggestions.

 

I look forward to hearing from you all.

 

Cheers

Share this post


Link to post
Share on other sites

Traders,

 

Still no comments.

 

Do you find any benefit in knowing when a price has remained stagnant for a period of time, say 5 seconds? Is there a message in a price that has remained stationary for seconds that you guys use for your trading?

 

Give me something :-)

Share this post


Link to post
Share on other sites
Traders,

 

Still no comments.

 

Do you find any benefit in knowing when a price has remained stagnant for a period of time, say 5 seconds? Is there a message in a price that has remained stationary for seconds that you guys use for your trading?

 

Give me something :-)

 

Didn't we just discuss this in your other thread?

Share this post


Link to post
Share on other sites
Didn't we just discuss this in your other thread?

 

Hi yes we did, and I am looking into T&S as a means of adapting my trading from using OBV or Trade Volume Index.

 

Don't get me wrong I really appreciate the suggestion and as I just mentioned it is something I'm seriously looking into, however, I was just wondering if there were others that agree with you.

 

Cheers

Share this post


Link to post
Share on other sites

you should draw some diagrams to illustrate your thinking/logic.

a picture is worth a thousand words.

on a discussion forum, most people cannot read past the 100th word.

Share this post


Link to post
Share on other sites

What is statistically significant about 3 second pauses? Or pauses at all? Have you measured the significance? Is there a significant probability increase only if you have OBV/Priced in trend? Or in counter trend?

 

Are you trading in line with OBV/Price or against?

 

It sounds like you're using OBV/Price composite (NDX) as your primary indicator. But something to do with YM pauses as a trigger. That doesn't seem very deterministic.

 

I like your OBV/Price composite concept, but would want a couple of price action confirmations on the YM (not just pauses and toggles) to trigger trades.

Share this post


Link to post
Share on other sites

 

Are you trading in line with OBV/Price or against?

 

It sounds like you're using OBV/Price composite (NDX) as your primary indicator. But something to do with YM pauses as a trigger. That doesn't seem very deterministic.

 

.

 

You have made me soooo happy. Apart from a member called 'brownsfan' who kinda got I'm trying do, you are the only person that appears to truly understand what I'm trying to ahieve. I posted this exact thread word-for-word on other forums and no one gets it.

So at last I can have a conversation with someone without having to go through every detail again and again.

 

First, I appreciate your commnets, and at this stage there isn't any significance in a three second pause. The reason I introduced it into my trading because it stopped from going crazy watching price move up/down before I entered - I scalp. So initially I used the pause to give me a focus on when to watch the price. So, if the price paused for 3 or 4 seconds at 11000 I will be notifed with an alert. If after the pause the price moved to 11005 and then sat there for another four seconds I would be notified. After the second pause I would watch to see if the price moved in the direction of the OBV / Price of the majority of the stocks (remember by this time I already know which way the OBV/Price is going) I would enter.

 

I going to continue, I just want to send this thread now, so that you know that I'm here. I've lots more I would like to talk with you about - please stick with me on this.....

Share this post


Link to post
Share on other sites

 

It sounds like you're using OBV/Price composite (NDX) as your primary indicator. But something to do with YM pauses as a trigger. That doesn't seem very deterministic.

 

 

You're 100% correct here. I think the only way to know if the pause has any significance is to do what 'brownsfan' suggested and watch the Tape.....

Share this post


Link to post
Share on other sites

MarketMole / Brownsfan019, are you guys around.

 

I have posted a snapshot of the Time and Sales for YM at the time that YM paused for over 4 seconds. The pause took place 09/08/11 at 11:12:14 to 11:12:20

 

Its this kind of thing that I need a strategy for my stagnation system, but I don't have the knowledge or experience to understand what is going on in T & S to make a judgement.

 

If there is anybody out there that can assist with this one I'll provide more examples - and if you're able to share with me some good strategies I'll happily share with you my Excel spreadsheet with all the formulas (that's if you're interested in it).

 

Cheers

5aa710a2c5aee_09-09-201112-00-52PM.thumb.jpg.2a686100f57b04c1d27b6ce2bee1b8a8.jpg

Share this post


Link to post
Share on other sites

I think I would try to embody the concept of a "pause" into something that could be modeled. For instance, imagine creating 5 second bars. A long pause in price change would be represented by a doji like bar. If a doji was followed by specific sequence of bars, say up and then a down with the close below the doji low, and your OBV/Price confirmed a short trade, then sell short the YM.

 

By packaging the trades as 5 second bars you could also perform statistical analysis on the pattern.

 

As far as watching the actual trade executions during a pause, you could capture that in the volume of the bar. Perhaps on a high volume doji like bar the probability of follow through is higher than on a low volume bar.

Share this post


Link to post
Share on other sites
I think I would try to embody the concept of a "pause" into something that could be modeled. For instance, imagine creating 5 second bars. A long pause in price change would be represented by a doji like bar. If a doji was followed by specific sequence of bars, say up and then a down with the close below the doji low, and your OBV/Price confirmed a short trade, then sell short the YM.

 

By packaging the trades as 5 second bars you could also perform statistical analysis on the pattern.

 

As far as watching the actual trade executions during a pause, you could capture that in the volume of the bar. Perhaps on a high volume doji like bar the probability of follow through is higher than on a low volume bar.

 

Brilliant, absolutely brilliant. That might sound dramatic but that strategy is great not just because its an excellent strategy but it more importantly it opens up so many other ideas in my head.

 

Thanks man.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Be careful who you blame.   I can tell you one thing for sure.   Effective traders don’t blame others when things start to go wrong.   You can hang onto your tendency to play the victim, or the martyr… but if you want to achieve in trading, you have to be prepared to take responsibility.   People assign reasons to outcomes, whether based on internal or external factors.   When traders face losses, it's common for them to blame bad luck, poor advice, or other external factors, rather than reflecting on their own personal attributes like arrogance, fear, or greed.   This is a challenging lesson to grasp in your trading journey, but one that holds immense value.   This is called attribution theory. Taking responsibility for your actions is the key to improving your trading skills. Pause and ask yourself - What role did I play in my financial decisions?   After all, you were the one who listened to that source, and decided to act on that trade based on the rumour. Attributing results solely to external circumstances is what is known as having an ‘external locus of control’.   It's a concept coined by psychologist Julian Rotter in 1954. A trader with an external locus of control might say, "I made a profit because the markets are currently favourable."   Instead, strive to develop an "internal locus of control" and take ownership of your actions.   Assume that all trading results are within your realm of responsibility and actively seek ways to improve your own behaviour.   This is the fastest route to enhancing your trading abilities. A trader with an internal locus of control might proudly state, "My equity curve is rising because I am a disciplined trader who faithfully follows my trading plan." Author: Louise Bedford Source: https://www.tradinggame.com.au/
    • SELF IMPROVEMENT.   The whole self-help industry began when Dale Carnegie published How to Win Friends and Influence People in 1936. Then came other classics like Think And Grow Rich by Napoleon Hill, Awaken the Giant Within by Tony Robbins toward the end of the century.   Today, teaching people how to improve themselves is a business. A pure ruthless business where some people sell utter bullshit.   There are broke Instagrammers and YouTubers with literally no solid background teaching men how to be attractive to women, how to begin a start-up, how to become successful — most of these guys speaking nothing more than hollow motivational words and cliche stuff. They waste your time. Some of these people who present themselves as hugely successful also give talks and write books.   There are so many books on financial advice, self-improvement, love, etc and some people actually try to read them. They are a waste of time, mostly.   When you start reading a dozen books on finance you realize that they all say the same stuff.   You are not going to live forever in the learning phase. Don't procrastinate by reading bull-shit or the same good knowledge in 10 books. What we ought to do is choose wisely.   Yes. A good book can change your life, given you do what it asks you to do.   All the books I have named up to now are worthy of reading. Tim Ferriss, Simon Sinek, Robert Greene — these guys are worthy of reading. These guys teach what others don't. Their books are unique and actually, come from relevant and successful people.   When Richard Branson writes a book about entrepreneurship, go read it. Every line in that book is said by one of the greatest entrepreneurs of our time.   When a Chinese millionaire( he claims to be) Youtuber who releases a video titled “Why reading books keeps you broke” and a year later another one “My recommendation of books for grand success” you should be wise to tell him to jump from Victoria Falls.   These self-improvement gurus sell you delusions.   They say they have those little tricks that only they know that if you use, everything in your life will be perfect. Those little tricks. We are just “making of a to-do-list before sleeping” away from becoming the next Bill Gates.   There are no little tricks.   There is no success-mantra.   Self-improvement is a trap for 99% of the people. You can't do that unless you are very, very strong.   If you are looking for easy ways, you will only keep wasting your time forgetting that your time on this planet is limited, as alive humans that is.   Also, I feel that people who claim to read like a book a day or promote it are idiots. You retain nothing. When you do read a good book, you read slow, sometimes a whole paragraph, again and again, dwelling on it, trying to internalize its knowledge. You try to understand. You think. It takes time.   It's better to read a good book 10 times than 1000 stupid ones.   So be choosy. Read from the guys who actually know something, not some wannabe ‘influencers’.   Edit: Think And Grow Rich was written as a result of a project assigned to Napoleon Hill by Andrew Carnegie(the 2nd richest man in recent history). He was asked to study the most successful people on the planet and document which characteristics made them great. He did extensive work in studying hundreds of the most successful people of that time. The result was that little book.   Nowadays some people just study Instagram algorithms and think of themselves as a Dale Carnegie or Anthony Robbins. By Nupur Nishant, Quora Profits from free accurate cryptos signals: https://www.predictmag.com/    
    • there is no avoiding loses to be honest, its just how the market is. you win some and hopefully more, but u do lose some. 
    • $CSCO Cisco Systems stock, nice top of range breakout, from Stocks to Watch at https://stockconsultant.com/?CSCOSEPN Septerna stock watch for a bottom breakout, good upside price gap
    • $CSCO Cisco Systems stock, nice top of range breakout, from Stocks to Watch at https://stockconsultant.com/?CSCOSEPN Septerna stock watch for a bottom breakout, good upside price gap
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.