JB-System

[coyotte]

A Ozz MetaStock Plugin from "Jim Berg"

Cost $au50 to $au150 depending how you buy it.
Download from site ---- sharetradingeducation.com.

I have absolutely no connection with Jim Berg and do not stand to gain financially in any way -- not even a member of the service.

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Came across this plugin early 2007 , whilst looking around for a trading plan (base) unrelated to patterns or trend lines.

It is based on the ATR and RSI indicators.
Suitable for Short/Med/Long term.
XJO Stocks .
Built in Buy/Sell (not expert --- u decide )
Is not subjective -- but as any indicator can be used this way.
Long Only.

Know it's Lagging etc ,etc -- but let's just judge it on it's merits and leave the bias to one side.

Am still building up a "Watch List" for it, as it has a built in search function, so it may take a while for this thread to get mobile.

But early signs seem promising as will be demostrated in the next post.
It could be of use outside the area it's developer intended.


Berg's Rules

Rules of the method are basic:

1: Stock in UP trend.

2: Stock must have made a recent low with the systems RSI setting.

3: Has now risen and CLOSED above the lower red line (trigger).

4: Initial STOP is the recent LOW (no trade if >10%).

5: Exit for short term is a close above the upper green --if > than 10% of entry.

6: Exit for all terms is two consecutive closes below the the lower red line.


Cheers

 

[coyotte]

Graph of XJO -- it is the areas in the rectangles that are being highlighted:

Graph: 01 -- 12 months of the XJO.

Graph: 02 -- April 06 -- the 7 consecutive days -- Breach/Close.

Graph: 03 -- Oct 06 -- 1 minor breach.

Graph: 04 -- Feb 07 -- the 8 consecutive days -- Breach/Close .

May and probably means nothing -- this system is still under TEST -- but maybe there is use for it outside the designed area as a Early Warning, to start tightening STOPS and begin looking for signs of a correction.

Cheers

 

[tech/a]

coyotte

5: Exit for short term is a close above the upper green --if > than 10% of entry.

Isnt this limiting your profit to an R/R of 1:1 perhaps a little over?
From your charts in 2 of the trends this rule would have seen you out well before the end of the trend.

Exit for longterm I presume is a close below the ATR.
So if the close closes above the Green line how would you decide whether to take the short term exit or not---?

 

[coyotte]

Exit for med/term is two consecutive closes below the bottom line. (red)
Exit for short term is a close above the top line (green ) if >10% of entry.
Once underway -- Stop for all terms is the same as the med/long exit.

Initial Stop - the recent low --but Entry not > than 10% of this low.

These are the rules laid down by Berg -- it is these that I had in mind of working upon -- the STOPS & EXITS.

Heaps of stuff -- strike rate vs exit, tighter initial stop, count back, med term exit at above the top line after consecutive breech.

The indicator itself seems ok -- its just the sloppy rules.

Cheers

 

[coyotte]

FLX ---12 mths

You can see the Entries (system's RSI makes a low, followed by the trigger).

The Sept 06 Entry was followed by a ST Exit and a M/L term Exit/Stop.

Another possible Entry (RSI had not bottom though) followed by a all terms Stop.


Then the one where I picked it up (but for totally different reason -- post 249 in the "potential breakouts" thread).

The Feb 14 Entry is still a all term goer -- I dropped out early as I closed all positions.



Cheers

 

[It's Snake Pliskin]

Thanks Coyotte.

 

[tech/a]

Coyotte.

Good to see that the Application of a method and in this case Bergs is being considered.
This is simply the point I have been making relative to any form of analysis,that the analysis itself when used to trade---its application will be the determining factor in CONSISTENT profitability.Something which is harder than it looks.

Once placed and tested in a system,the results of that application (And you can alter the application in many ways) will be seen.When trading in a discretionary manner they wont.

From past experience the lagging nature of these types of methodologies make consistent and satisfactory profit almost impossible.

The R/R are to low and their W/L ratio are not high enough to offset the low R/R.
Observations not critisisms of Coyottes post.

 

[wayneL]

Coyotte.

Good to see that the Application of a method and in this case Bergs is being considered.
This is simply the point I have been making relative to any form of analysis,that the analysis itself when used to trade---its application will be the determining factor in CONSISTENT profitability.Something which is harder than it looks.

Once placed and tested in a system,the results of that application (And you can alter the application in many ways) will be seen.When trading in a discretionary manner they wont.

From past experience the lagging nature of these types of methodologies make consistent and satisfactory profit almost impossible.

The R/R are to low and their W/L ratio are not high enough to offset the low R/R.
Observations not critisisms of Coyottes post.

Not withstanding the comments on R/R and W/L, I was interested in your comments about the "lagging" nature of this system. How is it any more lagging than say... Techtrader?

 

[coyotte]

We know it's lagging --- but it (the indicator) would also appear to be predictive --- the constant breech of the upper line for the XJO before the two medium corrections, in contrast to the minor breech followed by a minor correction --- is the bit that has caught my eye, as a early warning.

If the ST exit ( profit) rule was changed to 20% , it would then be acceptable ??? --- No, a load of rubbish unless you knew the strike rate

As stated I'm looking at refining the trading rules --- and possible use as a predictive tool for indexs.

The next post on BlueScope shows it's possible strength (the indicator) is weakened by one of it's rules:

Cheers

 

[tech/a]

Wayne

Techtrader is a tested system.

From application of the trading conditions, Enrty, Exit, Stops, Position sizing, over the period tested back in 2001 X % was seen as being achieved after 20000 systems tests. Its a fixed set of rules TESTED.
We know that REGARDLESS of trades taken from those triggered that if applied thats what (x% the X being between 18 and 28%) will be returned.

Further improvements in return are made by using leverage (Margin) and reinvesting profit. 4 yrs have returned as expected. In fact to the higher end of X.

For discretionary systems we dont know any of that. Its a huge risk.We dont know how it will perform and on which universe it will perform best, infact wether it CAN return a profit. All we can do is KNOW that we must have a good R/R and as higher W/L ratio as possible even then no guarentees. It MAYBE helpful to discretionary traders to select trades with least Risk and Coyotte has 10% as the max---strangely the exact SET RISK of Techtrader.

My own veiw is to maximise R/R and W/L in a discretionary method,we need analysis which is closer to the price action,yet accurate enough to be able to save us from premature ejeculation!!!

I have been working for sometime with a small group of traders who have shown me that 75% W/L and R/R of 3 to 15:1 is being achieved with a Discretionary trading methodology. It is Systematic as Motorway pointed out but I cannot test it.

Hence my renewed interest in E/W and my introduction to VSA. I'm not prepared to disclose the EXACT aspects I am working with them on. I am the eternal sceptic as many well know here, so even being shown in real time these results---time and again---have me setting myself up and attempting to replicate---and I believe to some degree improve.(I havent been approached for improvement--thats just me). These people dont need the Duck, but is perhaps one of the benefits from posting for so long on forums ---you just dont know whos having a peek---and perhaps the opportunities presented---yet to be proven by the Duck.

Entry AND Exit become very important.
Entry for high W/L and Exit for maximum R/R.
AGET is NOT perfect but it goes way further in the hands of those who are genuine practitioners of Elliot wave (them not me---but learning) than it does in the hands of those who expect software to trade for them.
VSA the same---and the Duck the same---learning.

Supermarket software and analysis just wont cut serious highly profitable (Systematic) discretionary (Systematic---there are clear rules---but try to programme Elliot Wave and VSA analysis into a systems test!! Not to mention Short and long balancing of portfolio along with leverage pyramiding,and profit extraction.) trading.

Few go down the road--cost is one serious reason and understanding or capability to learn ---another. The Duck will be flying North and thats where he will be.

Perhaps this goes a way toward explaining the Ducks percieved changing from X to Y.
No its just another part of the process.Those processes will remain in place until and if something better comes along to work in conjunction with or take the place of accepted practices.

Above all things I need to see APPLICATION---Ive seen it--but not yet from me.
Mind you the "They could be wrong" post does stem from my investigation into the above. The "This is the top" brigade are STILL yet to be disproven.

Sorry Coyotte will now let you continue. Perhaps some of the above will help in some of your research.

 

[coyotte]

BSL:

Defining the TREND:
Using both a 180dma or a 10/40 wma -- would have left us out of the initial move -- the indicator picked it though --- maybe work on defining the TREND is required, if used as a "selection system".
BSL: is still a goer --- do not hold a position.

Cheers

 

[coyotte]

SMM:

Should of interest to a few:

The rules at this early stage as laid down by Berg, seem to be failing this Indicator badly.
There are a couple of ST trades on this chart prior to the first one arrowed.

Of particular note is the action in the rectangle prior to the fall.

Anyone Know how I write a "MS screening formula" for a 7 day RSI that has hit 30???? -- Berg's doesn't seem to work.

After a screen that will bring up -- > $1.00, < $10.00, 7day RSI has recently hit 30.



Cheers

 

[coyotte]

SMM current --- ample warning !!!

Cheers

 

[tech/a]

If(RSI(C,7)<=30,1,0)

Place in indicator builder.

 

[coyotte]

Thank you

Cheers

 

[Fero]

Hi Coyote,

I use bullcharts which has a Jim Berg Volitility Profit taker as one of the included systems. I find it very useful and as you indicate it can be predictive.
It was useful in predicting this last correction and also for the correction in may last year. I look at weekly and daily charts of the different indexes and if they are all starting to line up the probability of a drop is high. I find the "take profit point" is often early. I used to use RSI to confirm but have changed to using SIROC which smooths it out and makes it a bit easier to see, more so on the entry. I exit if the SIROC breeches the 90%. If an berg entry point matches with SIROC lines near 10% and an upward trending crossover it is usually a good entry point. Also look at volumes.


I did trade SMM using this system but missed out on a lot of upward movement but then with other stocks the exit can be right on the money. I try and stick to my rules and only take the trades with the highest probability of succeeding.

Am only a relative beginner so am trying to learn and improve on what i do. What i have been doing is fairly basic but seems to work well for me but irealise this has been a pretty easy market to trade in and that this system only works on an uptrending market. When the market gets tougher i want to try and be prepared.


Hope these charts work, as this is first time tried this.

 

[Fero]

Looks like they didnt, will try again.

Should have used preview post i see. Better but still not brilliant.

 

[coyotte]

Thanks Fero.

Thats the type of input I'm after.

Cheers

 

[tech/a]

Thanks Fero.

Thats the type of input I'm after.

Cheers

And "THEY" said posting your methodology and or ideas wouldn't be of benefit!!!!

What did the Duck tell you and its DAY 1

Enjoy.
Make the effort and "THEY WILL COME"

 

[coyotte]

And "THEY" said posting your methodology and or ideas wouldn't be of benefit!!!!

What did the Duck tell you and its DAY 1

Enjoy.
Make the effort and "THEY WILL COME"

Of course it does --- as it opens up for debate hopefully the thread starter will learn something along with others ---- of those that do pick up on the method 90% will have dropped it by 12mths for various reasons --- so in the long run it ends up back to the status quo.


Cheers