CFDs - Eric Kratzer S/T Method

[nizar]

BOOO!

So after a total of a few weeks trading a 'system' yourself, and with less than 20 trades under your belt, you are now in a position to refer to people that don't trade the same way as yourself as punters. How funny.

LOL good point Prof

But really thats how I saw it for myself.
I stopped trading for about 3-4 months while i was designing my system. My mates asked me why and I told them because I felt like I had no idea what I was doing and felt like I was punting.

 

[eric35]

Trembling Hand, just a very quick reply about CFD providers. I deal with a provider that gives DMA, no requoting as you have access to the market directly. You see what u get

 

[AMR]

Have been waiting for someone to ask since this thread started.

Throw away one of the MAs. Why does it have to be a MA cross? They are for dummies looking for a holy grail. They get so wound up in looking for an indicator that they forget about the only thing that matters, the PRICE. Why not a Price cross over one MA have a look at the charts better entry and exit every time.

Why use two lagging indicators to give you a signal?? I have a theory on this one but that’s for another time.

I'm quite new to daytrading, but won't a price/MA crossover generate a pile of whipsaws? How would you deal with this?

 

[prawn_86]

Just an update:

No trades today as i was in exams all morning.

 

[Trembling Hand]

I'm quite new to daytrading, but won't a price/MA crossover generate a pile of whipsaws? How would you deal with this?

If you are getting whipped out of trades to soon you are trading a pattern that isn't there to trade. i.e. you enter on a price cross of a MA but it whips back. Fine didn't work this time but if it doesn’t work the next 5 trades your pattern is not there to trade. Learn historical patterns for the market you are trading then try and trade them live.

My comment came from the fact that by the time two lagging MAs cross you are well into the move. Especially if we are talking intraday. If you are day trading you need very small stops IMO. To keep the avg loss to avg win in your favour. When you enter half way thru a move where do you place a stop that is 1 not going to whip you out on a small counter move and 2 is small enough that you don't have to hit home runs to be greater than your avg loss.

 

[>Apocalypto<]

Just an update:

No trades today as i was in exams all morning.

Prawn,

From start till now how has the system done? I am lost in this thread to much banter going on.

Have you traded on any shares or are you sticking to the indexes?

Well done for publicly sharing your project with us and good luck on your exams.

Cheers

 

[Trembling Hand]

Just an update:

No trades today as i was in exams all morning.

Hey Prawn. Even if you miss the days action it may be of use to print out the charts and see if your setups trigged on that day.

If you keep them they may end up as a good resource for reviewing the system.

 

[prawn_86]

Thanks guys, once again no trades today cause of exams.

TH - I do look at the graphs for the set ups, but because the exit is not perfectly defined, i dont like t use those 'what if' scenarios for too much detailed analysis.

Trade It - I have executed 8 trades so far, just on the index, and have made a gain of 11 points. So the $ and % amount profit would depend on each individuals account/margin/brokerage etc etc.

 

[PhoenixXx]

How many times do stocks in the ASX20 halt trading unannounced to release news?

Good point TH. Even if stop loss is set, there's no guarantee that we would get the price close to what the stop loss is. would love to try the 'system', but setting up the stop loss is still too grey for a newbie like me.

 

[prawn_86]

Ok Guys,
No exam for me today so i set myself a target of 10points, which may have ended up a little conservative, as i exited both trades a little early.

Trade 9
Short 6337 Out 6327 Gain 8 points

**this was not done on the criteria. I have noticed that on days when the DOW drops, our index opens down, naturally, but then it seems to fall alittle more. My guess is the panic sellers getting out. One has to remember the index is just a composite of stocks**


Trade 10
Long 6332 Out 6338 Gain 4 points

**entered this one on TH's suggestion, as the price went above both the EMA's. Exited too early as it went as high as 6445, but i was happy with my 12 point gain for the day**

 

[prawn_86]

Ok so just to sum up progress so far.

I have made a total of 10 trades, across 3 days. This has only really been in the morning however, as that is when the index is most volatile.

I am sitting on a gain of 23 points so far, after brokerage.

Average time for a trade to be open is around 8 min.


I am now playing around with a few different suggestions. Such as TH's to just use price rather than cross overs.

I stress once again that this is not a mechanical system so the results would probably never end up the same if it was to be carried out again, but so far i am pleased with my progress.

 

[prawn_86]

Took 3 trades this morning for a total loss of 6 points. The 3rd trade is not listed on the chart as it turned against me straight away.

Trade 11
Short 6357 Out 6350 Gain 5
**this was again working on my opening theory in my post above**

Trade 12
Long 6334 Out 6330 Loss 6
**price above both EMAs. (im still trying to figure this type of entry out. Any clus TH? **

Trade 13
Long 6341 Out 6338 Loss 5


So far 13 trades executed for a gain of 17 points after brokerage.

 

[professor_frink]

Took 3 trades this morning for a total loss of 6 points. The 3rd trade is not listed on the chart as it turned against me straight away.

Trade 11
Short 6357 Out 6350 Gain 5
**this was again working on my opening theory in my post above**

Trade 12
Long 6334 Out 6330 Loss 6
**price above both EMAs. (im still trying to figure this type of entry out. Any clus TH? **

Trade 13
Long 6341 Out 6338 Loss 5


So far 13 trades executed for a gain of 17 points after brokerage.

my take on trade 12- price was above both ma's, but they were both sloping down, price hadn't even come close to printing a higher low or higher high. If you wanted to be aggressive and get long, waiting for some kind of bottoming formation is a good idea. The double bottom on the SPI shortly after(which looks more like a higher low on your chart) would have been a more appropriate place in this instance.

 

[prawn_86]

Thanks Prof,

as usual very insightful/helpful.

I can see why Eric used crossovers, as they are easy to define and see. Next week i will be trying this method on the DOW, which has a bigger point movement, so it will be interesting to see if a crossover can still catch enough of a movement to be profitable.

 

[motorway]

my take on trade 12- price was above both ma's, but they were both sloping down, price hadn't even come close to printing a higher low or higher high. If you wanted to be aggressive and get long, waiting for some kind of bottoming formation is a good idea. The double bottom on the SPI shortly after(which looks more like a higher low on your chart) would have been a more appropriate place in this instance.

Another way of saying that ...

Is with trade 12 you bought resistance...

Concepts of support and resistance are important I think ...
before you worry about the averages..

motorway

 

[prawn_86]

Concepts of support and resistance are important I think ...
before you worry about the averages..

motorway

Hi Motorway,

thanks for you input, always nice to get a range of opinions.

i do have one question, apologies if it is simple, but i am relatively green when it comes to any form of intraday trading.

How do you recognise support and resistance when it is shuch a short time frame? ie - 2 min charts.

Personally it is easy to look back and say "ahh thats where it was" but when its happening live i find it a lot harder to determine.

Input always appreciated

prawn

 

[Trembling Hand]

How do you recognise support and resistance when it is shuch a short time frame? ie - 2 min charts.

Personally it is easy to look back and say "ahh thats where it was" but when its happening live i find it a lot harder to determine.

Input always appreciated

prawn

There is the problem with daytrading you have to be able to trade fast and cover all the possibilities within a short period of time. On a daily basis you have at least the luxury of studying the danger points(support/resistance/retracement etc.) out of hours. Not so when your trades are lasting 10 to 20 min.

With day trading there is another problem. As you are looking at the 2 min chart the big money may be looking at the 5 min/15 min/hourly etc. What setup you enter on the 2 min chart could look to be a fading opportunity on a larger time frame. I think you will find a lot of daytraders trade with multiple time frame charts of the same instrument. A setup presents on a larger time frame and is managed on the smaller time frame.

With that said I think your approach is the correct one. That is trading an idea to test a simple setup and exit to see how it goes. Daytrading is simply pattern recognition it’s just that the patterns are not always simplistic..

 

[prawn_86]

Hit my 'loss limit' in the first 2 trades today so thats it. Try again on the DOW tonight and on ours again tomorrow.

Trade 14
Short 6350 Out 6356 Loss 8 points
**testing my opening theory again. certainly didnt work this time**

Trade 15
Long 6357 Out 6354 Loss 5 points
**previous candle was above both EMAs and then tested support (there you go motorway ). I held this one a bit too long as i was tempted to take a small profit but got greedy (bad me!!)**

 

[motorway]

Hi Motorway,

thanks for you input, always nice to get a range of opinions.

i do have one question, apologies if it is simple, but i am relatively green when it comes to any form of intraday trading.

How do you recognise support and resistance when it is shuch a short time frame? ie - 2 min charts.

Personally it is easy to look back and say "ahh thats where it was" but when its happening live i find it a lot harder to determine.

Input always appreciated

prawn

Trade 12 was at an upside bulge in a downtrend...

Down trends have new highs too ! Just lower ones.

You still have to work within the bounds of the trend.

This is support and resistance

A higher low then followed
So then the behavior changed.

motorway

 

[anthon]

Hit my 'loss limit' in the first 2 trades today so thats it. Try again on the DOW tonight and on ours again tomorrow.

Trade 14
Short 6350 Out 6356 Loss 8 points
**testing my opening theory again. certainly didnt work this time**

Trade 15
Long 6357 Out 6354 Loss 5 points
**previous candle was above both EMAs and then tested support (there you go motorway ). I held this one a bit too long as i was tempted to take a small profit but got greedy (bad me!!)**

Prawn,

I am quite the rookie so take this as you like it but I think your opening trade being based on the US movement overnight is a good idea however I think you should have a closer look at the reasons for the US's fall as sometimes (as what happened on Trade 14 for you) a fall in the US (or an announcement of some data) can be a boon for the ASX, hence the increase from open.

Just a thought.