Happy Easter.

I haven't been able to trade lately, but that doesn't mean that it hasn't been on my mind. After my failure to blitzkrieg the apex combine, I've felt the need to re-evaluate my plan, to take a hard look at my weakness in trading, and try to do something about it. I know where I am weak- because I had yet to adopt a truly systematic approach to trading, I was unsure of where to enter the market, where to hold my stop loss, and when to take profit. This uncertainty led to fear, fear turned to loss.

I have to admit, I was stumped there for a bit. I felt that I had tried so much, but nothing really felt right, but as luck would have it, I ended up having a conversation the other day that pointed me in a new direction, and actually addresses a majority of my trading issues. The conversation that I had was with the creator of the Zombie Packs that you can download here at Futures IO. I have talked to Frosty before, he Skyped me out of the blue last week and we had a great conversation about everything trading. I was fortunate enough to be able to talk to him at length about his Zombie set-ups. After talking to him, and getting a better idea of how the set-ups work, I realized that by using them, they would give me objective, rules based, entries, stops and targets.

I don't have time to go in-depth right now, I have a house full of family for Easter, but I wanted to mark this moment. In brief summary, this strategy entails taking trades on the 1-hour timeframe, triggered by a zombie set-up, when it correlates with the set-up on the 4-hour chart. The entry and stop-loss are calculated and placed by another Frosty masterpiece- Tick Hunter. Finally Take profit is dynamic, I hold for what Frosty calls the Zombie flip- when another zombie signal is printed in the opposite direction. Here's how it looks.





Next week is not a good week for trading for me, I work the first 4 days, but I'll be watching. Lastly, Tick Hunter does provide an ability to take trades for me, albeit in a planned, limited fashion, so if I feel like I have a good enough grasp on where the market is going, that I am able to anticipate a move, I just might. Regardless, I'll be in SIM a bit so I can iron out the kinks.

BT January

BT February

BT March

BT April

Foward testing

After a good back test this weekend, I started forward testing the 1-hour zombie strategy. Forgot to pick a signal type yesterday, but today I caught this move with the auto pilot. ZP9 and TH worked flawlessly. I have some concerns about how close my stop loss is, using Snap8bar puts me closer to the action than I initially thought I wanted to be, but it seems to have worked today. from my back test I would be willing to take $1,000 damage per loss, but half that means that I could take 4x the loss and still be really profitable, so I'll be leaving it for the time being. I turned it off like a coward tonight, but I was on the wrong side of the 4-hour trend, and that's what I'm supposed to do, although I now suspect that some of the Zombie magic comes from getting in the action when the signal prints and managing it from there.



Interesting, the results from today closely match results from the back test. with a slightly higher W/L ratio. I have it shut off right now in the interest of perverting capital. $3478, 173 points, 699 ticks, for the day, much less the week is great, but my back test indicates that I should expect more.



Right now, the 4-hour chart is telling me that we are in an uptrend with an active zombie set-up to the upside. Now, I am looking for a pullback that leads to another move higher, so I think that my next move is going to me turn it back on later tonight, but only to the upside per my strategy. I'll look at it tomorrow before work and see where the NQ is at then.

A market can only trade sideways for so long, I think

Tonight, I turned the Zombie machine back on, both ways. The chart looks flat and the MA's pinched, but after today's Netflix move, the range has expanded to 13950-14300 and we're right in the middle of the range at 14080'sh. That's a lot of room for profit. At some point the NQ is going to test one of these extremes and I would very much like to catch the move, so I've turned on AP both ways and am demoing the Snap1bar to see if that will give me the stop loss that I want.

Purposeful Banger

What I noticed last night is the NQ was trying to push above 14300 but had failed 5 times since April 11th. What this was setting up on the chart was a head and shoulders, and the NQ was forming the right shoulder today. I don't really trade patterns, but it was a confluence none the less. Another thing that I noticed was that the zombies on the 4-hour chart had changed bearish- even though price as still technically above my short-term MA which was rising. This is the same length as proscribed for shorter time frames by Frosty. I find this one REALLY interesting because it actually forecasted the move that took place.



My back test informed me that I should expect 1-3 zombie signals in a day, with 2 being the average number of signals per day. Seeing that I got a signal early that I didn't take, and that most other factors were pointing to a move down, my gut told me we were going to sell, but as I suck at knowing the future, I took both sides. One thing I think that I have learned so far is you have to take risks to profit.



The last thing that I was looking at for today was the Econoday calendar. With the current state of the economy, I was thinking that today's talk by the Fed's Jerome Powell would have an impact on the market, again, my gut was that this would in turn create selling pressure, especially on the heels of the Netflix earnings report. All in all it was a good day and if I can make more days like this in the Market, then being profitable should be possible.



I don't know if I'll trade tomorrow, this week I broke the 10K/week barrier in less trades than ever before. For the first time I did so with what is arguably becoming a complete system that fully describes when I enter, where my stop loss is, and how I exit trades. For the first time I've back and forward tested the strategy and was able to use those results AND follow the strategy live, albeit in SIM. All this is creating the expectancy that I can do so fully live in the near future.



2158 ticks this week might seem impressive, but according to my back testing, it is actually the upper end of the average week for year to date. I don't have the average, but I do now have all the data that I need to calculate it. I might do that tonight. Final thoughts here before I shove off- a lot of this was made possible by Frosty's awesome ZP and TH, so Thanks Frosty! That said, ZP/TH gave me a great scaffold for me to build, and keep building on.

Based Caveman

It was a pretty good week. I was able to forward test my strategy despite having to work 4 of the 5 trading days this week. I was able to accomplish this with Tick Hunter's super-handy 'auto-pilot feature', which will take a trade from a Zombie Pack 9 buy or sell signal. MY strategy is pretty simple- take the trade using Tick hunter (TH) autopilot (AP) from the 1-hour chart, when it's in the same direction as the zombie pack 9 (ZP9) trend from the 4-hour chart. Stop loss is calculated by TH using its Snap1Bar setting which puts it at the top of the signal candle, or 450 ticks. Profit is taken on the 'zombie flip', i.e. a signal in the opposite direction.

Truth be told, from my current back test- 2022 YTD, a person could take all signals both directions and most likely be some-what profitable. You'd probably want to leave the week when you were 'profitable enough', or not losing too badly, but that's the rub- I'm trying to take as much ambiguity off the table as I possibly can. If this year of trying to trade has taught me anything, I'm my own worst enemy when it comes to trading. Ambiguity leads to doubt, doubt to fear, fear to a lack of action- not taking trades or closing them too early. The key now is optimization.

This weekend I'll be back testing 2021 using this strategy. I'm thinking about trading a lot differently these days, that trading isn't just something you do in the moment but is something done both forward and backward in time. That by expanding the data set ever farther backwards for validation, when the moment comes, I simply execute, knowing that the next trade will either win or lose, but over time the strategy should continue to prove profitable.

This is how I quite possibly have defeated my own fear. I've proven in the language of math that losses will defiantly happen, but so will greater gains.

January 2021









results

16 wins
8 losses
24 total trades
$30220 gross win
$6600 gross loss
$23,620 profit less fees/commission
50% win rate
4.5 profit factor
$1259 average win
$275 average loss
$984 average trade