CFDs - Eric Kratzer S/T Method

[prawn_86]

I tried paper trading the ASX200 index via CFDs using this method as Prof suggested and came out break even after 3 trades.

I will continue today using both 2 and 5 min charts to see if that makes any difference, and when my exams are over i might spend a few late nights and try it on the DOW as that tends to have wider point swings, which means the brokerage wont eat into profits as much.

Anyone else out there been playing around with this method?

 

[nizar]

I tried paper trading the ASX200 index via CFDs using this method as Prof suggested and came out break even after 3 trades.

I will continue today using both 2 and 5 min charts to see if that makes any difference, and when my exams are over i might spend a few late nights and try it on the DOW as that tends to have wider point swings, which means the brokerage wont eat into profits as much.

Anyone else out there been playing around with this method?

Prawn,

In my opinion leverage should be used to boost the returns of an already sound method.

Don't expect it to turn a break even system into a very profitable one.

Is 3 trades enough to come to any sort of conclusion?
How many trades is enough?

 

[professor_frink]

I tried paper trading the ASX200 index via CFDs using this method as Prof suggested and came out break even after 3 trades.

I will continue today using both 2 and 5 min charts to see if that makes any difference, and when my exams are over i might spend a few late nights and try it on the DOW as that tends to have wider point swings, which means the brokerage wont eat into profits as much.

Anyone else out there been playing around with this method?

Do you have a screenshot of the chart with trades marked on it? If you do, post it up for some opinions. If you don't, it might be time to start

 

[prawn_86]

Prawn,

In my opinion leverage should be used to boost the returns of an already sound method.

Don't expect it to turn a break even system into a very profitable one.

Is 3 trades enough to come to any sort of conclusion?
How many trades is enough?

It was only the first (half) day of paper trading Nizar.

I will prob paper trade for a month whenever i am at home and not studying and see how it goes after that and decide to pursue it further or not.

Prof - i will work on some screenshots

 

[prawn_86]

Ok here is my first 2 trades from this morning. I have kept the chart big so entrys and exits can be shown clearly.

Remember this is not a mechanical system and is just a guideline not a set rule. The brokerage fees cmc charge are just the spread which is always 2 points during the day, so this has been subtracted/added to the profit and loss figures i will post.

Trade 1:
Short @ 6486 Out @ 6472 Profit = $12
Exited this based on 'gut feel'

Trade 2:
Long @ 6486 Out @ 6496 Profit = $8
Exited this as i was worried about 6500 acting as resistance

Feel free to ask any questions.

 

[professor_frink]

Ok here is my first 2 trades from this morning. I have kept the chart big so entrys and exits can be shown clearly.

Remember this is not a mechanical system and is just a guideline not a set rule. The brokerage fees cmc charge are just the spread which is always 2 points during the day, so this has been subtracted/added to the profit and loss figures i will post.

Trade 1:
Short @ 6486 Out @ 6472 Profit = $12
Exited this based on 'gut feel'

Trade 2:
Long @ 6486 Out @ 6496 Profit = $8
Exited this as i was worried about 6500 acting as resistance

Feel free to ask any questions.

Does the index you are trading have the night session Prawn?

 

[prawn_86]

Yeh it does, but the spreads are usually about 5 - 8 points so you get slugged a lot more in brokerage.

 

[Trembling Hand]

Trade 1:
Short @ 6486 Out @ 6472 Profit = $12
Exited this based on 'gut feel'

Trade 2:
Long @ 6486 Out @ 6496 Profit = $8
Exited this as i was worried about 6500 acting as resistance

Feel free to ask any questions.

Here is the problem with a system that is not a system. You have a 'rule' for entry yet gut feel for exit? Your Method then becomes a discretionary one. And I would think if you are trading by using discretion you can do a lot better than MA crossovers. If you had rules for exit like close position after a bar crosses the slower MA as you can see the result would of been diff. If you are going to use discretion why didn't your gut get locked up at the point I have put ??? on the chart and you exit?

 

[prawn_86]

I have to admit at the '???' point i was very close to closing the trade.

This system was never meant to be mechanical, even Eric has stated in his website that if he feels a price has risen (or dropped) too fast then he will exit the trade to preserve profits.

 

[professor_frink]

Yeh it does, but the spreads are usually about 5 - 8 points so you get slugged a lot more in brokerage.

Na, I wasn't going to mention trading the night session, I was more curious as to whether it was in your chart or not. On the futs, there wasn't a cross on the 2 min at the open, it was more of a continuation play on the downward move. But it was your exit that got me interested- you got out right at the o/n lows as they were being rejected. A little early, I would have waited for some kind of a reversal pattern at that level before exiting, just in case it was just pausing before carrying on lower, which happened a couple of minutes after you exited. But the result would have been pretty well the same in this case.

All looks good though prawn Even with the spread on the index, you've probably done a whole lot better than if you had of taken a couple of swings at a large cap and had to pay 4 lots of brokerage.

 

[prawn_86]

Thanks Prof,

The point about waiting for a reversal is a valid one, as i tend to lock in profits a bit too early. I did it yesterday with one of my short trades, only to see it keep falling.

I guess thats why you paper trade, to iron out these problems/details.

 

[prawn_86]

next 2 trades wern't too good.

Trade 3
Short 6478 Out 6482 Loss 6
Exited with my own theory; 2 opposite coloured bars.


Trade 4
Long 6488 Out 6482 Loss 8


This is the problem with the ASX200 imo, there is not enough of a daily range. By the time the MA's cross over it is halfway through its range meaning you have to pick the exact top to make any decent profit. Hence why i am going to try it on the DOW when exams are over

 

[professor_frink]

next 2 trades wern't too good.

Trade 3
Short 6478 Out 6482 Loss 6
Exited with my own theory; 2 opposite coloured bars.


Trade 4
Long 6488 Out 6482 Loss 8


This is the problem with the ASX200 imo, there is not enough of a daily range. By the time the MA's cross over it is halfway through its range meaning you have to pick the exact top to make any decent profit. Hence why i am going to try it on the DOW when exams are over

The daily range on our market is fine Prawn! The method just needs a little work

 

[prawn_86]

Ok, perhaps i just get frustrated not knowing things instantly lol.

Im here to learn and practice

 

[Trembling Hand]

Ok, perhaps i just get frustrated not knowing things instantly lol.

Im here to learn and practice

Practice is the best learning so keep at it.

I suspect you will find out that your entry and exit signals are just too slow. You will be entering half way through a new trend . And more often than not just too close to the end of the trend. Have a look at your entry price and see how far away it is from the high or low of that trend. You are getting in at the middle not much move left to pay for mistakes, stopped out trades, bad fills and then pay for a beer and the rent.

 

[prawn_86]

thanks TH,

thats what i alluded to in one of my other posts.

Do you have any suggestions as to how it could be improved?

im open to all ideas. but basically i want a set of intraday rules/guidelines that i can use for those times when i am in front of the computer.

 

[professor_frink]

Ok, perhaps i just get frustrated not knowing things instantly lol.

Im here to learn and practice

You traded the opening 2 swings of the day and got them both right. I would have taken my money and ran! There seems to be a perception that intraday traders are glued to the screen all day trying to pick up every last tick available. It doesn't have to be this way, and IMO opinion shouldn't be. Right now, I'm done with the SPI for the day(I only took 1 trade today). Whilst your paper trading and just looking for something that 'fits' with you, then take all the trades you want, but when(if) you decide to go live, you don't have to trade all day, or even all morning for that matter. My goal for the SPI is to pick something up in the morning whilst it's active and moving quickly, then if I still feel like trading, I'll go and have a look at some other markets in the region. Occasionally, I'll snag a runner and get to hold it for extended gains and clean up, but most of the time, it's about picking up the small moves, making some money and enjoying the rest of my day

 

[CFD]

What are the indicators used in the lowest third of your chart?
For an entry the MACD would normally cross over before two MA. Doesn't help with an exit though.

 

[professor_frink]

Practice is the best learning so keep at it.

I suspect you will find out that your entry and exit signals are just too slow. You will be entering half way through a new trend . And more often than not just too close to the end of the trend. Have a look at your entry price and see how far away it is from the high or low of that trend. You are getting in at the middle not much move left to pay for mistakes, stopped out trades, bad fills and then pay for a beer and the rent.

yep, trading the crossover isn't 100% ideal. There has been a pullback after every crossover this morning that would have provided a better entry price, and a closer stop, which makes a huge difference when it gets choppy.

 

[prawn_86]

CFD - its a MACD and a stochastic. I have noticed the MACD crosses before the MA but havent actioned on it yet.

Prof - i am the same really, i just want to place a couple of trades when im able to, like i said to TH. But since im here today im just seeing how it works across the whole day