Are you against trading within a range? A problem with blue sky trading (although it's done very well of late) is that you do not know when you are nearing resistance and the support line has been left too far behind to know if it would hold.
Mechanical System and Pyramiding
- Thread starter Chorlton
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Are you against trading within a range? A problem with blue sky trading (although it's done very well of late) is that you do not know when you are nearing resistance and the support line has been left too far behind to know if it would hold.
tech/a
No Ordinary Duck
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Tech/a,
As an obvious newbie to system development, can I ask why adding a latch would make such a significant improvement? Surely, as already stated there is, initially, no difference between taking a trade in a new stock or another trade in an exisiting one?
So what piece of the jigsaw I'm I missing here??
Sorry for my misunderstanding here.......
Latching returns the FIRST occurence of the conditions of the method/system.
In the systems I trade which are generally triggered by higher highs/ breakouts more so than pull backs,the first occurence if the trade ends up a winner the length of trend will be greatest from the initial trigger.
tech/a
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No not at all.
Can be highly profitable.
Works very well with futures.
This form of trading is more about frequency of winning trades than R/R of a longer term trend folowing method which relys more on R/R than Win ratio.
Wow, great thread guys.
Lots of good info here.
Iv just finished reading Way of the Turtle as well. Some good info there about systems testing and design.
Tech's response to this is almost a carbon copy of what i tell my mates about why i just spent $1520 on tradesim enterprise.
And on another note -- I wander how many of the 95-97% of losing traders have tradesim enterprise? Its a very powerful tool. Serious tools for serious traders.
Lots of good info here.
Iv just finished reading Way of the Turtle as well. Some good info there about systems testing and design.
Tech's response to this is almost a carbon copy of what i tell my mates about why i just spent $1520 on tradesim enterprise.
And on another note -- I wander how many of the 95-97% of losing traders have tradesim enterprise?
Its a very powerful tool. Serious tools for serious traders.
tech/a
No Ordinary Duck
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Wow, great thread guys.
Lots of good info here.
Iv just finished reading Way of the Turtle as well. Some good info there about systems testing and design.
Tech's response to this is almost a carbon copy of what i tell my mates about why i just spent $1520 on tradesim enterprise.
And on another note -- I wander how many of the 95-97% of losing traders have tradesim enterprise?
Software may not = Success.
Like most things only as good as the driver!
LOL true but its a bl00dy good start!
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I would second that........ In my opinion it is a tool which should help us level the "trading" playing field.....
To those that do pyramid, when it comes to either pyramiding a position, or opening a new position, which one do you prefer?
Ie. if 2 entries are triggered on a given day, one a pyramid, and the other, another code, which one do you go for?
Also -- this will have implication for portfolio limits which I have started another thread for.
Ie. if 2 entries are triggered on a given day, one a pyramid, and the other, another code, which one do you go for?
Also -- this will have implication for portfolio limits which I have started another thread for.
tech/a
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Depends (for me) how mature a trend is and how long I have been holding the first purchase.If not long I would probably choose the open position if it was trading strongly in my favor.
If not or a more mature trade then I would look for the one (Eyeball) which I feel had best "Bang for Buck"---likely to bounce into profit.
Again go back to my comments on Montecarlo testing--
If not or a more mature trade then I would look for the one (Eyeball) which I feel had best "Bang for Buck"---likely to bounce into profit.
Again go back to my comments on Montecarlo testing--
I prefer to allow money management to have a great influence in decisions.
ie using a 2% risk per trade, if the R/R is still showing a 2% risk when a second buy(sell) signal comes up on the same trade then let it pass. (You can not say a 4% risk on the same stock has not increased the risk). If the R/R has reduced to 0 or gone positive when a second buy(sell) signal comes up then take it. If the R/R is showing a !% risk, the only enter the second trade with an extra 1% risk.
ie using a 2% risk per trade, if the R/R is still showing a 2% risk when a second buy(sell) signal comes up on the same trade then let it pass. (You can not say a 4% risk on the same stock has not increased the risk). If the R/R has reduced to 0 or gone positive when a second buy(sell) signal comes up then take it. If the R/R is showing a !% risk, the only enter the second trade with an extra 1% risk.
tech/a
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Err well yes I can.
If I risk 2% on each trade then 2 trades x 2% = 4% I'm no worse off than taking another trade.
There are a zillion ways to handle risk allocation on a pyramid trade to ensure risk is not increased.
The whole idea is to maximise R/R and minimising initial risk goes a long way in maximising return to risk.
tech/a
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If I have a 2% stop on the trade taken as a pyramid and leave the stop on the original trade.
Then I havent concentrated risk.
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