Trade setups - 3

Reference: for this site is from CssAnalytics , which is part of Mr. K list


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Short Quicker from Steve Kicker ( candle stick book guy )

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Rob Hanna had a post Tuesday on what's happend with the SPX after 2 days up for the past few months.
( asr: he gets ideas from quantifable edges etc..)

24 trades in 12 months = avg 1 every 2 weeks. . .and with and avg holding time of 7 days, this is an active system for short timers

Inputs: Len1(9);
If Close > High[1] and High[1] > High[2]
Then Sell This Bar at Close;
If BarsSinceEntry = Len1
Then ExitShort This Bar at Close;

As usual, I've put my little twist on things and required the entry trigger to reflect 2 consecutive higher high closes.

Exit is a fixed length. . .9 days. You can test other exits at your convenience.
And for something completely different, I've turned on the "entry pyramid" function so the system entry can trigger again within the 9 day trade period, while still exiting on the original 9th day. Using the pyramid entry almost doubles the number of trades for the year and also doubles the net return, so it works very well in this setup.



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asr: 1/ WOW!!!!! 10 + 10 systems with profit factor from 3 to 5 with TS code ready and Forum to help
2/ we can use these signals on OIL and SPY as double confirmation for our 'VP' systems.
3/ if our VP is coded in Tradesation ( reading .csv files) , we can combine VP with this BZBTrader systems.

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asr: 1/ I think we can use this GSC system as one of Second Confirmation for our VP based system. since the concept is based on OS/OB ( which is confirms truning points of VP Medium/LOng term Diff signal lines )
2/ this GSC should be applied to all stocks

Grand Slam Cross (GSC)
I recently profiled a system I called the Grand Slam Cross (GSC) which was based on the CROSS OVER (cross back over) of overbought and oversold CCI and RSI levels

I tried testing this on a few other instruments (ES, YM, etc.) over longer timeframes. The short trades continue to perform well, but the long trades seems to degrade quickly. This is probably typical behavior of overbought/oversold based systems, but I was wondering if you noticed the same thing

What Does Pyramiding Mean?
A method of increasing a position size by using unrealized profits from successful trades to increase margin

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engulfing-system for QQQ
- Exposure time is a comfortable 5 days (for me).
- Not a lot of trades over the past 16 months but, as with most of the Dirty Dozen systems, the trick is to just sit tight until the systems fire before putting any dollars at risk.
asr note: 1/ simple systems with Profit factor range from 3 to 5
2/ engulfing candle pattern coded and tested free code
3/ see the short trade of it , profit factor 100 ,
4/ avarage trade opperutnity may be 1 in month, but having 10 systems gives 2 trades/week.
5/ this is much beeter ( code ready) than that 'profitable strategies' book


http://bzbtrader.blogspot.com/2009/03/qs-macd-signal-line.html
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GSC system codes

nputs: RSILength(2), OverSold(28), Overbought(86), Oversold2(20), Overbought2(86), CCILen(8), OverSold3(21), OverBought3(100), OverSold4(23), OverBought4(100);
If RSI(Close, RSILength) Crosses Below Overbought
and CCI(CCILen) Crosses Below Overbought2
Then Sell This Bar on Close;
If RSI(Close, RSILength) < Oversold
and CCI(CCILen) < Oversold2
Then ExitShort on Close;
If RSI(Close, RSILength) Crosses Above OverSold3
and CCI(CCILen) Crosses Above OverSold4
Then Buy at Market;
If RSI(Close, RSILength) > OverBought3
and CCI(CCILen) > OverBought4
Then Exitlong at Market;

Inputs: RSILength(2), OverSold(32), Overbought(90), Oversold2(32), Overbought2(98),CCILen(8), OverSold3(32), OverBought3(78), OverSold4(32), OverBought4(86);
If Currentbar > 1 AND RSI(Close, RSILength) > Overbought
and CCI(CCILen) > Overbought2
Then Sell This Bar on Close;
If RSI(Close, RSILength) < Oversold
and CCI(CCILen) < Oversold2
Then ExitShort at Close;
If Currentbar > 1 AND RSI(Close, RSILength) < Oversold 3
and CCI(CCILen) < Oversold 4
Then Buy This Bar on Close;
If RSI(Close, RSILength) > OverBought3
and CCI(CCILen) > OverBought4
Then Exitlong at Market;

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Veteran trader experiences

Local Traders Meetup

Before proceeding further I need to clarify that my own trading timeframe is very short. I prefer daytrading and swing trades of 10 days or less as a means to manage my risk exposure. I also employ longer term option premium decay strategies for a large portion of my account, but these are basically market neutral positions, heavily hedged and yielding a slow but steady rate of return. That's just my comfort level.

Just to put things in perspective I've been trading now for 25 years, with over 35,000 hours sitting in front of my monitors, putting on some 30,000 trades and sucking up about 4000 hours just programming TradeStation code. I've tried most trading platforms and brokers, quite a few of which are no longer in business. I've bought thousands of dollars of trading software, attended seminars, workshops and trade shows and read some 200+ books on trading. I'm old and I'm tired, but I still go at it almost every day for most of the day. And my trading style today is substantially different from the one that I used 2 years ago.

Find a local trader support group. Not someone trying to sell a $2000 seminar. Telechart (Worden Bros.), Metastock, Tradestation, IB, CME, and many others (including Forex brokers)have local user groups and/or offer periodic free seminars and workshops. These are great opportunities to network and get ideas. One nugget of trading wisdom can change your whole trading perspective and maybe even improve your bottom line. A search of meetup.com should provide a quick check for what's available in your area for non-affiliated trading groups.

I use a quantitative approach to trading because my education is grounded in mathematics and economics and my brain is hard wired to favor pattern recognition. It's a curse, but I think in algorithms. I pay little attention to fundamentals because I believe price reflects fundamentals, news and sentiment better than any other indicator and there are lots of folks out there with a lot of expensive infrastructure that have access to that intel much quicker than I could ever hope to attain. I've never met a PE that I didn't like.

Recent articles in the popular press (Active Trader magazine, Futures, SFO, and Stocks & Commodities) have noted the failure of many popular trading setups such as naked put selling, trend following, consolidation breakdowns, inside day breakouts, moving average crossovers, MACD zero line crosses, etc.
My reaction . . . So what ???

If you expect market mechanics and market dynamics to remain constant you've got a rude and expensive awakening coming soon. David Varadi had a great timely post on this topic and I recommend every serious trader read it several times. David isn't a daytrader, but the points he makes are salient regardless of your trading timeframe.
Adaptability is the key . . and that implies a willingness to be open to adaptive opportunities.

That can translate into finding your own niche away from the daily tsunami of momentum, finding a few stocks/ ETFs that you track and trade in various time frames (my preference), trading different markets, trading a basket, diversifying your tactical approach, trading multiple time frames, joining a prop shop and scalping pennies and nickels with other people's money, OR ???? Adapting is a process. . . an ongoing learning process.

For several years I was on the board of directors of the largest trader support group in SoCal with a rotating membership of about 400 traders. The group was mixed and traded a variety of platforms and a variety of products - Forex, futures, options, stocks. Some traded million dollar accounts while others traded with $10,000 or less. It really didn't matter, the idea was to network, share war stories and learn from each other. We had well known speakers come in every month and deliver their perspective on trading. Most of them also sold books, educational CDs, training workshops, etc. We always endeavored to vet speakers before inviting them to assure that we weren't part of a snake oil promotion.

That group has now disbanded and the reasons can mostly be traced to lack of commitment, disillusion with realities of trading for a living and an almost universe feeling of ennui. I'm still in contact with a core of about 20 traders from that group who are still plugging away, but that's a pretty high attrition rate.

ad to report, but over the past two years I've seen more than a few skilled and experienced traders either blow up their accounts, become so scared of the markets that they could no longer pull the trigger and/or decide they really couldn't make a living trading. The collateral emotional damage including personal anxiety, frustration and feelings of inadequacy and failure that accompany such reversals should not be underestimated. Such fallout can seriously damage a psyche and threaten a marriage and family ties. I've seen it close up.
I've often heard it said that one year of daytrading is the equivalent of 3 years of intensive psychoanalysis. Believe it.

Trading ain't easy and anybody that tells you otherwise is a liar (probably trying to sell you something packaged as an edge). There are a few nuggets out there . . finding the ones that fit with your mindset, capital resources and risk tolerance is a very complicated and time consuming dance. Expect a few missteps and falls along the way.