CB (count back) Lines & Chart Patterns

[coyotte]

Coyote,
It is nice to know what sort of stats a system produces in actual trading over a long period of time. Testing of things like count back lines and ADX in the past has led them to be rejected by me as a strategy, although CBL's are difficult to code for testing purposes. Testing is also no guarantee that an indicator does or doesn't work - there are so many variables.

Is it possible to put the rules that you use into clear step by step guidelines? For example indicate;

1. The timeframe that you use,
2. the universe of stocks selected,
3. the position sizing strategy,
4. when you would enter a trade
5. and when you would exit a trade.

This would be useful for coding purposes and give a better understanding of the strategy being outlined above. You also mention some statistics (70% plus S/R) - are there other stats available for the methods outlined. My apologies if I missed this info above.

I am a great devotee of backtesting trading strategies - it is difficult to find good systems that are tradeable.

regards
Stevo

drawdown.blogspot.com

The only time I use the D+, D- ,ADX is when trading a Trending Stock which appears to be making a top --- as the stock makes higher HIGHS or is maintaing it's high , if the ADX lines are making a divergence , then this is generally a clear message that the tread is breaking down , (ADX set at 14days ) take this along with UP tails on candles , red candles , compressing price and the stock is sending a clear message ---- You should be out before the C/B stop is hit --- look at the OXR chart as it made its high .

I also find the ADX usefull for confirming if a stock as it rises above a target is going into trend ( 14d ) as the trend develops (ADX 21 ) --- the ADX is a trend tracking tool not a breakout tool .

C/B is only used as a confirmation tool (or STOP ) for Breakout or Rebound Trading -- it is not used on its own as a selection method --- again check the OXR chart , you'll see if C/B did not confirm the move , then it was a dead cat bounce .

The best trading tool I've come across though is the Wormald Grid but this is defintly not a tool for new traders , first you must thoughly understand how to draw accurate Trend Lines and why they are placed where they are .


Apart from intra-day trading , the bulk of my trades are now iniated by either rising triangles or flags , these can and often do turn into Trend Trade --- If it appears that is the case I pick the trade up again.



Both Triangles and Flages can be entered at around the 2/3 development point , if you leave it untill they break the top line you are losing to much percentage -- in the case of LHG theres only around 7% to the target.


Most of these trades are opened and closed in little over a week -- the day of the breakout above the top line is often followed by two UP days , hiting the target then a pull back , before an advance (if any )

Cheers

 

[coyotte]

Wavepicker : Re Post 27

These charts are mearly examples :

The Origninal query was in reference to the abreviation I commonly use for Count Back , -- the early charts are showing what it is, how it is calculated and it's uses --- and no I don,t or rarely use these tools anymore except in a Trend Trade --- As I stated in the post you are reffering to I' m a pattern trader and use the wormald grid -- but that method would be confusing for a beginner .

I came across Bollinger Bands by accident , when I was initally fooling around with intra- day trading and found combined with the stocks I trade and set at Bollinger's recomendations that they worked -- also bought in the mac histrogram --- if the histrogram is concave the current trend (5 min ) seems to continue , if convex the trend generally reverses --- never noticed this before in charts . --- I find Intra day trading is a great learning exercise , simply changing the time frames 5,15, 60 min charts can show entirly different aspects -- but when they all agree it can be a powerfull signal ---- just my obsevations on a form of trading that can be very fast --- you might only have minutes to open or close .


Cheers

 

[tech/a]

Blah blah
Note; Chart one should read set up for a Counter trend trade.

 

[coyotte]

tech
Brokerage with IG is only a $1 per $1,000 position per side


Cheers

 

[Magdoran]

What and destroy my obnoxious #1 rating!!
Technical peanut outstanding achiever award--from Lord Duc.
Enemy#1 from the darkside---the Gann Clan.

Duck turns pussy!!

Its like taking Macenro out of tennis.

Cummmoooonn!!! Present your stuff!

If your going to offer information for public scrutiny then expect to be scrutinised.

I'm fair I'll give credit where its due.

Daffy, you are a funny Duck!


I always wondered who you were modelling yourself on. Now we know. John McEnroe – “super brat”, the model of countenance and decorum during the 80’s...

Geez, Daffy, why are you complaining? Don’t you know it’s open season on ducks? If you’re going to strive to be MR Obnoxious 2006, expect to be roasted on a spit. Sizzle sizzle. We can have a “Smorgas Borg”! Hahahahaha!

Hey, you made some really good points, we all know you know your stuff. I agreed with your questioning of the odd restrictions about what comments could be made on the thread, seemed odd to me too. But despite coyotte’s quirkiness, I believe that his intentions were honourable.

You know, it’s just a little adjustment in tone that would raise the bar. bunyip and wavepicker did a really good job highlighting the inconsistencies, but did so in a positive way. I know that you give credit when it’s due, maybe you can draw from this virtue?

No one expects you to become Mr nice guy on the forum – that’s not in your nature (just kidding). And who’d want you to become a pussy! Not me! Just posting in the style like the post above would make it much more inviting for us mere mortals to post what they think, that’s all.


Regards


“Moggie”

P.S. Hey, are you into tennis? Love the game. Used to play a lot, but not since moving back to Melbourne. Kind of miss it. Mag

 

[Magdoran]

Wavepicker : Re Post 27

These charts are mearly examples :

The Origninal query was in reference to the abreviation I commonly use for Count Back , -- the early charts are showing what it is, how it is calculated and it's uses --- and no I don,t or rarely use these tools anymore except in a Trend Trade --- As I stated in the post you are reffering to I' m a pattern trader and use the wormald grid -- but that method would be confusing for a beginner .

I came across Bollinger Bands by accident , when I was initally fooling around with intra- day trading and found combined with the stocks I trade and set at Bollinger's recomendations that they worked -- also bought in the mac histrogram --- if the histrogram is concave the current trend (5 min ) seems to continue , if convex the trend generally reverses --- never noticed this before in charts . --- I find Intra day trading is a great learning exercise , simply changing the time frames 5,15, 60 min charts can show entirly different aspects -- but when they all agree it can be a powerfull signal ---- just my obsevations on a form of trading that can be very fast --- you might only have minutes to open or close .


Cheers

Hey, coyotte,


Can you please post up some examples of the wormald grid? That would be really interesting.


Regards


Magdoran

 

[coyotte]

Hey, coyotte,


Can you please post up some examples of the wormald grid? That would be really interesting.


Regards


Magdoran

I'll do so , but in another thread --- want to keep this one for what is was intended for.
Will be a while though , am setting up (trying to ) a network and optus doesn,t want to have a bar to do with it --- real great when U have open positions .

Cheers

 

[tech/a]

“Smorgas Borg”! Hahahahaha!

I'm rolling on the floor in Agassi--your so funny!!

Tennis yeh me too.

Played in Glenelg districts with Mark Woodforde.
When he went on the circuit,we all thought it was a big joke.
His Dad Ray sponsored him for 12 mths and told him after that he was on his own.He won the NZ open in mth 11,got a call from another Lefty (McEnro )
soon after---then with Woodbridge.
Guess he had the last laugh well and truely!

 

[barney]

I'm rolling on the floor in Agassi--your so funny!!

Tennis yeh me too.

Played in Glenelg districts with Mark Woodforde.
When he went on the circuit,we all thought it was a big joke.
His Dad Ray sponsored him for 12 mths and told him after that he was on his own.He won the NZ open in mth 11,got a call from another Lefty (McEnro )
soon after---then with Woodbridge.
Guess he had the last laugh well and truely!

Now thats just plain "name dropping" .........thats worse than my "Cold Chisel and Midnight Oil" Actually while we're in the dropping of names mood ....... Our band "Eyes" did the Suzi Quatro support at the Taree RSL on her national tour (many moons ago now!) ..... We had to join the Union for 1 gig otherwise they wouldn't let us do it ......... I reckon they just pocketed our Union fees so they didn't have to pay us as much!!

Come on Tech, we've had Woodbridge ....what else have ya got??

PS Thanks to Mag for calming the waters on this thread, and thanks to Coyotte for dropping back in ............. yeah ....ok ..... and thanks to Tech for his sarcastic sense of humour!! Cheers to all, Barney.

PPS Hey Coyotte, that Wormald stuff sounds very interesting ....Let us know when and where you post it

 

[bunyip]

Hi Bunyip, here's a guide to posting an attachment, it's very easy once you've done it once or twice, happy to help if you need it, just post in the thread linked or pm me or any of the other mods:

https://www.aussiestockforums.com/forums/showthread.php?t=1401&highlight=attachment

QUOTE]

Righto, thanks RK......A picture is worth a thousand words - better by far to include a chart example rather than just use words to describe a chart pattern or setup.
I'll give it a go when I have time.

Bunyip

 

[Magdoran]

I'm rolling on the floor in Agassi--your so funny!!

Tennis yeh me too.

Played in Glenelg districts with Mark Woodforde.
When he went on the circuit,we all thought it was a big joke.
His Dad Ray sponsored him for 12 mths and told him after that he was on his own.He won the NZ open in mth 11,got a call from another Lefty (McEnro )
soon after---then with Woodbridge.
Guess he had the last laugh well and truely!

I’ve been meaning to get back to this Daffy,


So, you were a contemporary of Woodforde! Wow, that would have been an interesting time. I play, but came later when I gave up playing squash (saw a 40+ year old at the time a few years back have a heart attack on court, and decided I didn’t want to follow suit as I got older). Took a while to get the strokes right…

Great game. I tend to play more doubles these days, so the “Woodies” were an inspiration to watch, and the combination of Woodforde and McEnroe was great. Of course there is nothing like the singles matches to watch.

Haven’t played in a while since moving back to Melbourne after a very long absence. Interestingly there are some courts just up the road… Hmmm should dust off the racquet…

How about you?


“Mogge”

 

[It's Snake Pliskin]

What and destroy my obnoxious #1 rating!!
Technical peanut outstanding achiever award--from Lord Duc.
Enemy#1 from the darkside---the Gann Clan.

Duck turns pussy!!

Its like taking Macenro out of tennis.

Cummmoooonn!!! Present your stuff!

If your going to offer information for public scrutiny then expect to be scrutinised.

I'm fair I'll give credit where its due.

Good evening Tech/A.

I must say this is the first time I have seen a poster analyse themselves on the forum. From your analysis what change do you foresee or will nature take care of that? :whip

Coyotte,

It's good to see your posts even if I don't agree. But my opinion is not the point.

Regards
Snake

 

[coyotte]

Coyotte,

It's good to see your posts even if I don't agree. But my opinion is not the point.

Regards
Snake

Snake :

I'm was not asking for anyone to agree or their approval
This thread was not intended for Traders ,it started in the beginners lounge, one only has to observe how often when targets are hit that the stock is sold off to know that quite a lot of traders use this method .

Was simply demonstrating a different type of trading style to what appears to be the norm on this forum .

Short-Term Target Trading :
Both the stocks mentioned at the time hit their Triangle Targets --- probably won't hit their sturrup , but that's a different trade :

It,s not hard to find 5 Tri's or Flags a week , for a steady $200 profit each , with a avg of 1 loss to the max of 3 losses in a week --- if handled right losses are well below the target profit , hence a better than 1/1 bet


Come back to the point that the Anaylist whether they be T/A, F/A,Gann,Elliott or dart throwing are really imaterial in these types of trades .

It's about Trade Management -- After all you can get all the Anaylist's opinions you want -- from the free stuff right through to Fat Profits etc -- Anaylists are a dime a dozen --- But only getting in there and actually Trading will teach you HOW to trade , no one can do that for you.

Also with this style of trading , your not restricted to just the one type of anaylisis , any suitable stock surgested by any form of anaylisis/tippster can be looked at to see if either of these patterns are forming , but I generally found if U stick to much to the text book rules on patterns many a oppurtunity will be lost -- better to have tight STOPS .--- as the days pass, the rising STOP is reducing risk , to the point that there is no risk (except gaps)

Actually a interesting articale in a recent issue of " Your Trading Edge " -- comparing -- " a Formula 1" -- Salesman, Mechanic and Driver , to :
A Stock -- Broker , Analyst and Trader ---- the 3 are worlds apart

Cheers

 

[coyotte]

FXJ --- Live Trade

Thought I'd post a Live Trade :

Using the same KISS principles as I posted with LHG in early Oct.

Trouble was as I was posting my daily thoughts about LHG , I was being shot down by the GURUS , --- Well I'm afraid being human do'es have its baggage of emotion , we are not all Mr Spocks

But the KISS principles did prove the GURUS wrong ! --- not only did LHG hit it's target , using the the same principles it has so again in another 2 out of 2 trades -- not to bad : 3 out of 3 trades in 3 months in profit--- also looks like the " Stirup Trade " setup mentioned back then could still be a goer !


The current trade is FXJ --- no prizes for this one -- just an example of KISS over Complexity :

TRADING PLAN :


FXJ

Entry 1: break of Bull Flag -- Last Wed 29/11
Target 1: Flag Pole depth = 40c , = 5.20 + .40 = $5.60
Stop 1: Count Back level 4.80 -- this is now @ 4.95

Entry 2 : Rising Triangle , after flag -- enter this Mon 4/12
Target 2 : Same as T1
Stop 2 : Rising Stop , based on Target of .40c and following R/T trend line


Entry 3 : If FJX SP dropped below the Tri Trend Line BUT remained above the Tri STOP : then a rise above the Count Back for that Low would signal a 3rd Trade -- The flag trade would have been stopped out and closed.



Notes : High relative Vol during the Flag Pole followed by Low relative Vol during pattern set ups .



So here we have three separate trades in the one stock -- all with the same SP target but different risks (stops ) -- all based on the same KISS principles


Cheers

 

[coyotte]

Count Back - E/W - ILU

The first chart is showing a possible EW count for ILU --- I'm still a rookie with EW but the principle wave pattern appears to there .

ILU in a A,B,C correction from a Wave 1 high ?

If A is completed then C could be completed --- If C is completed then ILU could be starting a Wave 3 high formation .

C/B could be of help in determining whether C has completed.

In the second chart , the 1st setup C has hit the same support level as A and begins what appears to be its Wave 3 impulse move up But fails to close above the count back line -- there would not be a entry .


The 2nd setup has two possible C/B levels the usual one would be the high within the green circle because the two highs in the red circle are not signifintly different -- but the present level is significant in that it is the support for A and has recently been support for a possible C termination and is now forming resistance and could also be forming the top of a ascending triangle .

Note that the trend line under the possible triangle is plotted under Guppy rules ie: where price reacts , price has hit this line and closed up .

Since FXJ was a flop , if ILU closes above the CB , I'll follow it through

Cheers