[jonbig04]

Thanks bro, how long have you been at it?

[daedalus]

Just over 2 years in futures... Started with the ES, now trading the NQ soley.

The ES just backs and fills way to much for my style of trading. The NQ moves and if its gonna go it runs for a bit straight line which allows me to quickly reduce risk and lock in profits in. The same setups in the ES would tend to backfil and stop you out too quickly, etc.

NQ trades nice and smooth most of the time.

So whats the system you're working on here? What problems are you encountering?

I'd like to try and help!

[jonbig04]

Ok I think I am getting somewhere. When I say getting somewhere I don't mean I've necessarily figured out the problem or solved it, just that I'm one step closer.

I think (I'm still testing, I wish there was some kind of computerized way to do this) I've found a way to identify the trend direction, and its strength. This goes a long way towards helping me with 1 and 2. firstly because I of course have to know the direction of the trend, secondly I need to knows its strength so I can assess whether to try to get in with it. This is especially important when trying to trade retracements as hey can of course turn into reversals a good percentage of the time.

Not to get too specific, I'm first watching price only. When price does X (a certain number of times) I then look at a certain momentum indicator. If all is well I wait for a retracement (yet to be defined) and enter hopefully near the bottom (yet to be defined) if and only if the momentum is still on my side. If the probability of a reversal is too high I don't enter. I wait for the reversal or more momentum (from PA and the indicator) to show me the trend is solid for the time being.

[jonbig04]

Right now I'm in the process of studying the actual retracement. One thing I'm doing (not the only thing) is going through chart after chart and numbering with a pen every retracement (and reversal) I see. I then can assign specific attributes to each one and hopefully find some common denominators (and hopefully attributes exclusive to reversals). Now I'm focusing on the retraced amount as a percentage from the trend. So basically I'm looking at these 50 or so RETs (now shorthand for retracement) and calculating the difference between the point it left the trend and the point at which is started back towards trend; then converting that into a percent as to make apples to apples comparisons between RETs, reversals and just small fluctuations in price. This will help me do a couple things hopefully. If a RET has gone way beyond the typical percentage it may actually be a reversal, and I can decided which fluctuations are in fact RETs I can profit on or if they are too small. I havent done this much math since....ever. haha.

[sevensa]

Another way of looking at the retracements is with Fibonacci ratios. Many consider it a trend reversal once it go past 62% where 38% and 50% is considered retracements. I don't really use it, but you might find it useful and saving you some time.

[jonbig04]

Thanks for the info. I've seen them before and essentially it is what I'm doing, I just would rather determine all the information myself. May sound strange but I don't want to attempt any shortcuts and definitely don't want to become indicator dependent. If I detect a pattern myself and find out later that an indicator does the same thing then I'm sure I will use it, but for now I would rather do most (I am using one indicator for momentum) of the work myself. If that makes sense. thanks.

[daedalus]

I trade retracements into a prevailing bigger trend. What platform are you trading with?

[jonbig04]

Originally Posted by daedalus »

I trade retracements into a prevailing bigger trend. What platform are you trading with?

Hey, sorry I didn't see your earlier post.

I'm using NT w/zenfire if that's what you mean?