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Over the past few days with the market closed for a long holiday I took advatange of that extended period to educate you on the rules I follow when I am trading. I have been trading for a little over 3 years most of which was a non profitable adventure. My trading did not start to turn the corner until I stopped buying every new indicator and a lot of those make you rich quick trading schemes.
For you to be successful you must come up with a strategy that fits your personality, one that makes sense to you and one that makes money in back testing it and SIM trading it to prove it does work most of the time. If you are able to take my methodology and trade it that's great I am very happy that I was able to help your trading. Perhaps something I have taught you will help your personal style of trading take the next step.
The important thing is your trading approach must be in a written document like I have done so you can review it constantly, make changes if needed, and set goals. After each trade you place win or lose keep a journal of the trade and why you took it. You should be able to tell a perfect stranger why you entered every trade with logical reasons why you did. If I was to ask you why you took this trade and your response was "It looked like the market was going up" then I would tell you that you need a plan to trade before you trade anymore.
I took on this adventure of teaching you my methodology because I knew that I had finally found a system that works for me most of the time and I wanted to share it. I wish there was someone that did this for me and maybe there was and I didn't know where to find it 3 years ago. Starting tomorrow I will continue to post on this forum at least 1 trade a day that I take with my live account to reinforce this strategy and help you see the signals.
Additional help for those that decide to follow this strategy is available by asking questions here on the forum, sending an email to [email protected] , or you can find me on Skype at "lazytrader53". A note on Skype - I do not talk on it while trading my live account as I must stay focused and disciplined to follow my rules, although by email request I will talk with you during the slow or off trading hours if you need or want some 1 on 1 free coaching with me.
I encourage that your question be asked here on the forum so other traders can learn from it as well
Have a great Memorial Day and I will resume trading post on Tuesday
Can you help answer these questions from other members on NexusFi?
Charles I have really been enjoying the explanation of your method, nice work, not only in the method that you came up with, but in the easy way you have shown and explained it. I was wondering, if after using this method, have you found that the 1508/377 tick chart combo to be the best? Have you ever experimented with other combos? Minute bars or say range bars, volume bars etc. I did notice you made mention to someone else that the larger time frame needs to be 4 times greater than the smaller one, so have you tried other combos, i.e. say a 600/150 tick or would that be too small?
Thanks,
thanks for the comments/question. Actually yes a very big part of my learning curve was to determine the best times frames to trade this method. Which in turn was a hinderance to stabilizing my strategy, I think every trader has gone through the "Well crap this doesn't work either" mode and they start changing time frames and indicators until they finally decide that the Holy Grail really doesn't exist and they need to come up with something that will work more times than not
As far as the different time frames I don't like range bars because you never have any idea when the bar will close, you know where they will close but don't know when, as far as minute (time based) bars they work well say using a 3 &12 minute chart but you get fewer trades from a risk perspective - many times as you see the trade coming the bar you want to get in on runs 25 ticks and kills the entry from a risk stand point.
I stuck with tick charts and have always liked the 377 as it is a Fib #, I personally don't know if that has value or not but I do know a lot of traders look at it. Volume charts are good but when you start playing with them you will notice an 1100 volume chart looks almost identical to the 377 tick. To go down to a smaller tick chart say the 600/150 as you asked you will get in my opinion way too trades that result in false signals.
I am a strong believer in less is better, on a humurous note my trading goal is not to make my broker rich by trading too much and paying him/her commissions
Very nice thread. I like how you lay out, and explain the methodology. On the subject of chart examples, in addition to the specific trades you show to explain the concepts, I think it would be beneficial for us to also see all your signals for the day, winners, losers, scratches, and trades skipped by discretion. That will give a clearer view of the performance of the method, and add a glimpse of the statistical aspect, and expectancy of the methodology.
excellent point monpere, I will post all trades I take everyday - I may not post all of them with chart pictures but will post each trade with text and the results of each. trades I show with chart pictures is for further education purposes
What distinguish this system from the other various systems published here that use a set of moving averages on a higher time frame but uses a lower time frame to finetune the entry ? Also, why using a target of 21 ticks ? Why not use 20 ticks or 19 ticks ?
I am not sure what distingush this sytem from others, but my methodology is not based on trading MA's it is based on trading buying dips and selling rallies at support and resistance levels. If the other strategies posted in the forum are based on this type of trading I have not seen them, not to imply that they don't exist
My profit target is in the sense actually 20 ticks - I add 1 more tick if I can get it to cover the commission
I might have misjudged but you seem to rely heavily on the IchiCloud to determine your support and resistance levels. If this is the case then you are indeed using a form of moving average. You could just as well use the TriggerLines[80,20] and get almost the same type of approximation. You did not explain why 20 ticks as target, is it based on some stats or is it because it corresponds to about 2 times your risk on average ?
you are correct I do rely heavily on the IchiCloud indicator for S&R levels, actually I have used the trigger lines at 80/20 and as a personal decision I did not like it - the 80/20 trigger lines did not provide a sound enough system for me - but again that is my personal decision not to say it would not work for somebody else.
Yes the 20 ticks is generally twice the risk, with that in mind you would have to be successful less than 40% of the time to lose money with this system