Daytrading - How to make a profit

There seems to bee a bit of scepticism regarding daytrading as a viable and profitable method.

Well let some of us daytraders share what we do, discuss different methods etc.

I'll go through some current charts next week, but here are a couple of videos put out by CBOT showing one guys methods. (you'll need shockwave installed)

http://www.cbot.com/cbot/docs/cbotpivot1.swf

http://www.cbot.com/cbot/docs/cbotpivot2.swf

It is pretty much how most profitable index traders play...i.e. using floor pivots with a couple of pretty coloured lines thrown in for effect.:D

K.I.S.S. principles rule.

Wayne.

Look forward to your posts.

I must admit I'm like Knobby I feel that successful ---longterm (And 5 yrs at $1000+/week is certaintly long term) day traders are like hens teeth.

I,m sure you exist as Ive been talking to you over a year or so and seen your photo---think it was you!

Anyway 2 questions raised from your initial post.

(1) Could you define YOUR definition of Daytrading.
(2) You mention that most succesful daytraders also would have long term stratagies.Do you feel that longterm success hinges on having the longter startagy in place.

There seems to bee a bit of scepticism regarding daytrading as a viable and profitable method.

Well let some of us daytraders share what we do, discuss different methods etc.

I'll go through some current charts next week, but here are a couple of videos put out by CBOT showing one guys methods. (you'll need shockwave installed)

http://www.cbot.com/cbot/docs/cbotpivot1.swf

http://www.cbot.com/cbot/docs/cbotpivot2.swf

It is pretty much how most profitable index traders play...i.e. using floor pivots with a couple of pretty coloured lines thrown in for effect.:D

K.I.S.S. principles rule.

Excellent viewing thanks Wayne,(especially all the lovely coloured bits) :bigthumb: look forward to future posts on the subject.

I think those of us with goals to reach, whether day trading or not will find the information you give invaluable.

Interesting stuff.

That was very interesting. Can not wait for more.
Peter

Tech

(1) Could you define YOUR definition of Daytrading.
(2) You mention that most succesful daytraders also would have long term stratagies.Do you feel that longterm success hinges on having the longter startagy in place.

A.to 1/ Any trade that is entered with the goal of exiting that day before the close of trading is a daytrade in my book. There are still numerous timeframes amongst daytraders.

There are scalpers. (the screen trader version thereof, as opposed to pit scalpers who scalp the difference between bid and ask.) These traders take only a few ticks at a time and trade several times per instrument, per day. e.g. I know an english guy who takes 4 ticks only at a time, trading the euro. He trades 20 lots at a time and does very well.

There are traders who trade between pivots, like the videos above.

Then there are "swing" traders (still within the intraday time frame) who are looking for the larger intraday trends.

These are all still "daytraders"

I'm a bit of a heretic because if I like the pattern on the daily, I will hold overnight...or several days if the market is in the mood for giving away money.

A. to 2/ Depends on the trader. Some people yes, some people no. In my case, I like having my option strategies and swing trades as it takes the pressure off the daytrades. Psychologically, if I were relying only on daytrading, I don't think I would enjoy that pressure.

But some daytraders are the other way round. The income from daytrading takes the pressure off their long term decisions.

As usual, It's all a matter of individual psychology.

A few points about what I post:

1/ I don't want to be the guru here. So please, other daytraders add your thoughts, methods, criticisms etc. Don't leave me on my own here!

2/ I will not post entries/exits real time, as management of positions at busy times of the day will mean i won't usually have the time to do it straight away.

Consequently, I won't make any representations as to whether I have profited or lost. I will just point out the good or bad setups after the fact for educational purposes only. I think we are all a bit sceptical of retropective entries hey.

My view of the price action is just that, my view. All other views most welcome and encouraged.

Later.....

OK here is my screen setup.

The plots on it are the floor traders pivots...standard calculations, standard usage ie support & resistance

The yellow line is a 13ema flipper. It flips from the ema calculated on the lows to the highs and visa versa, as the price action crosses over. This functions a s a trailing stop in certain circumstances

The oscillators are stolen bill williams' profitunity template with a slight change of the parameters. Likewise the bar colours which reflect the oscilator direction. These are largely for decoration purposes or as a crutch if I feel i need one.

I will post the amibroker code in another thread. The pivot code is my work, and I am still amazed at myself that I managed it....code dumbs**t that I am. LOL

Bugger it! I'll just post code here for anyone who wants it.

/* wayneL's intraday template */

GraphXSpace = 3 ;

/* These are the calcs for the oscilator values and plots the paint bars*/
Osc = EMA(C,8) - EMA(C,34);
acc = Osc - EMA(Osc,13);

col = IIf(Osc > Ref(Osc,-1) AND acc > Ref(acc,-1),colorBrightGreen,
IIf(Osc < Ref(Osc,-1) AND acc < Ref(acc,-1),colorRed,colorBlue));
barcolor= 1;// this sets the color of the body of the candlesticks to default
Plot( Close, "Intraday Template" ,col/barcolor, styleBar);

//---------------------------------------------------------------------------------

/* This is the code for the exponential moving average flipper */

mov = 13;
hi = EMA(H,mov);
lo = EMA(L,mov) ;
x1 = IIf(C>Ref(hi,-1),1,IIf(C<Ref(lo,-1),-1,0));
x2 = ValueWhen(x1!=0,x1,1);
st = IIf(x2==-1,Hi,Lo);
Plot(st,"",colorYellow,styleNoLine|styleDots);

//---------------------------------------------------------------------------------

/* This next code calculates the previous days high, low and close */

Hi1 = IIf(Day()!=Ref(Day(),-1),Ref(HighestSince(Day()!=Ref(Day(),-1),H,1),-1),0);
Hi = ValueWhen(Day()!=Ref(Day(),-1),Hi1,1);
Lo1 = IIf(Day()!=Ref(Day(),-1),Ref(LowestSince(Day()!=Ref(Day(),-1),L,1),-1),0);
Lo = ValueWhen(Day()!=Ref(Day(),-1),Lo1,1);
Cl1 = IIf(Day()!=Ref(Day(),-1),Ref(C,-1),0);
Cl = ValueWhen(Day()!=Ref(Day(),-1),Cl1,1);

//---------------------------------------------------------------------------------

/* Calculates and plots the pivots */

rg = (Hi - Lo);
bp = (Hi + Lo + Cl)/3;
r1 = (bp*2)-Lo;
s1 = (bp*2)-Hi;
r2 = bp + r1 - s1;
s2 = bp - r1 + s1;
r3 = bp + r2 - s1;
s3 = bp - r2 + s1;
r4 = bp + r2 - s2;
s4 = bp - r2 + s2;

Plot(bp,"",colorOrange,styleBar|styleNoRescale);
Plot(s1,"",colorTeal,styleBar|styleNoRescale);
Plot(s2,"",colorTeal,styleBar|styleNoRescale);
Plot(s3,"",colorTeal,styleBar|styleNoRescale);
Plot(s4,"",colorTeal,styleBar|styleNoRescale);
Plot(r1,"",colorTeal,styleBar|styleNoRescale);
Plot(r2,"",colorTeal,styleBar|styleNoRescale);
Plot(r3,"",colorTeal,styleBar|styleNoRescale);
Plot(r4,"",colorTeal,styleBar|styleNoRescale);

//--end----------------------------------------------------------------------------

Morning session - Russel emini contract - $10 per tick, $100 per point, per contract.

Now entering deadzone (lunchtime) time to get away from the screen, have some munchies, interact a bit with missus, (who stays up with me God bless her)
etc

I also have s&p, nasdaq and euro up on my screens, plus 1 or 2 stocks that I'm interested in for swings.

But many daytraders stick to one chart only. Other have charts and screens all over the place.

I believe one of our members here even has a screen in the bedroom. :D

Arvo session didn't give too much away...10 or 20 ticks if you took the s1 exit.

But we are at support for this contract established on the 18th july with es also at support.

Longs tommorrow? We'll see.

Wayne,

Great stuff. Unless I am being too personal what is the volatility of your returns like? Do you have a profit every day or do you have up and down days but profit every week or do you have up and down weeks but have a profit every month?

I have done this kind of stuff in demo accounts for forex and seem to make a fortune one month and then give it all back the following month. I am not sure whether I was just impatient and expecting too much or just a lousy day trader getting lucky occassionally.

MIT

Wayne,

Great stuff. Unless I am being too personal what is the volatility of your returns like? Do you have a profit every day or do you have up and down days but profit every week or do you have up and down weeks but have a profit every month?

I have done this kind of stuff in demo accounts for forex and seem to make a fortune one month and then give it all back the following month. I am not sure whether I was just impatient and expecting too much or just a lousy day trader getting lucky occassionally.

MIT

Hi Mit,

Nobody makes a profit everyday. There are some days when you should walk away and not trade at all. People learn to sense these days and the conditions that precipitate them. Generally it will be very unusual not to make a profit every month. If not some serious navel gazing is in order...disipline is the key.

One thing with daytrading, it is VERY EASY to start overtrading and this is when you give money back. Even experienced traders must watch their disipline with this.

Forex is one of those instruments that has definate time frame where you should not trade. I look at currency futures (same thing as forex essentially) ONLY between the hours 2 AM and 4 AM and between 8 AM and 10 AM. (that new york time BTW) Outside of those times I am most definately NOT INTERESTED unless I have taken a trade and am managing it.

cheers

Hi Wayne,
Great charts and explanations, thanks for sharing and I hope more of your fellow daytraders join in the thread to make it even more interesting.

About your post #10- the chart refers to an 'S1', is that some sort of fibonacci level (the dotted horizontal line?). Just wondering; seen some on Rembrandt's XJO charts in the past so thought must be the same. Sorry if it's a dumb question, thought it better to ask in case it's important.

Hi Wayne,
Great charts and explanations, thanks for sharing and I hope more of your fellow daytraders join in the thread to make it even more interesting.

About your post #10- the chart refers to an 'S1', is that some sort of fibonacci level (the dotted horizontal line?). Just wondering; seen some on Rembrandt's XJO charts in the past so thought must be the same. Sorry if it's a dumb question, thought it better to ask in case it's important.

Hey Rk

It is a label for the first level of support of floor traders pivots.

Here is a brief explanation:

http://www.trading-naked.com/Floor_Traders_Pivots.htm

Cheers

Here is another good link on pivots:

http://www.mtrader.com/StuffOnPivots.htm

Anyhow, whilst browsing the trading naked site for the above link i found these articles on daytrading, or rather, the combination of day and position trading, which is what I advocate as well.

The first one is from Linda Bradford Raschke, who is well known as one of the "Market Wizards"

http://www.trading-naked.com/library/Raschke0203SFO.pdf

This second one is a chapter from one of Joe Ross' books on the same topic. Joe's reputation is rather more chequered than Linda's, but it is a good article nevertheless.

http://www.trading-naked.com/library/JoeRossTrading_Manual_C17_127_134.pdf

There is also a wealth of info on this particular site. Here is the link to the "library" from which I found the above:

http://www.trading-naked.com/Articles_and_Reprints.htm

Enjoy!

Mate I am dumder then you, how do you use those codes? I have do not have much knowledge about computers.

Thanks for your help,
Peter

wayneL, I hope you are planning on posting more of your insight. I'm playing with pivots at the moment and with some early prelim testing I can see how one can make pivots work. I plan on looking into them more thoroughly.

Thanks,
Andrew.

wayneL, I hope you are planning on posting more of your insight. I'm playing with pivots at the moment and with some early prelim testing I can see how one can make pivots work. I plan on looking into them more thoroughly.

Thanks,
Andrew.

Andrew,

I'll try and and to this thread as time and opportunity permits.

I have actually modified my template, and using a slightly different caclulation, based on fib numbers, plus a dynamic 3 day pivots, which seems to be working better. A chap called Frank Dilernia has written a book based around these (and other) calcs, which is a useful (but difficult) read.

If you have amibroker professional, I can supply my code.

Cheers

<edit> hmmmmm my actual chart has a black background , but its showing up white on the screen shot....much prettier with the black background. :D

Hi Wayne,

I have read some of Frank's posts on Reef and have just started AFL with Amibroker.

If the offer to provide the code still stands, I would be grateful so I may 1/ understand how you are working with Frank's theories and 2/ see how you have put it together to plot the chart in AFL.

Many thanks,
Peter

Hi Wayne,

I have read some of Frank's posts on Reef and have just started AFL with Amibroker.

If the offer to provide the code still stands, I would be grateful so I may 1/ understand how you are working with Frank's theories and 2/ see how you have put it together to plot the chart in AFL.

Many thanks,
Peter

Hmmm I typed out a long reply and somehow deleted it :( I'll have to come back to this, but here is the code

/* wayneL's Daytrading Template - To be plotted on intraday charts */

GraphXSpace = 1;

/* This plots the price bars. Select whether you want candlesticks or ordinary bars via th "view" menu */

_SECTION_BEGIN("Price");
SetChartOptions(0,chartShowArrows|chartShowDates);
_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));
Plot( C, "Close", ParamColor("Color", colorBlack ), styleNoTitle | ParamStyle("Style") | GetPriceStyle() );
_SECTION_END();

/* The following three codes are the exponential moving average flippers. These can be deleted or modified to suit */

_SECTION_BEGIN("10EMA Flipper");
mov = 10;
hi = EMA(H,mov);
lo = EMA(L,mov) ;
x1 = IIf(C>Ref(hi,-1),1,IIf(C<Ref(lo,-1),-1,0));
x2 = ValueWhen(x1!=0,x1,1);
st = IIf(x2==-1,Hi,Lo);
Plot(Ref(st,-1),"",colorYellow,styleNoLine|styleBar|styleNoLabel);
_SECTION_END();

_SECTION_BEGIN("20EMA Flipper");
mov = 20;
hi = EMA(H,mov);
lo = EMA(L,mov) ;
x1 = IIf(C>Ref(hi,-1),1,IIf(C<Ref(lo,-1),-1,0));
x2 = ValueWhen(x1!=0,x1,1);
st = IIf(x2==-1,Hi,Lo);
Plot(Ref(st,-1),"",colorWhite,styleNoLine|styleBar|styleNoLabel);
_SECTION_END();

_SECTION_BEGIN("34EMA Flipper");
mov = 34;
hi = EMA(H,mov);
lo = EMA(L,mov) ;
x1 = IIf(C>Ref(hi,-1),1,IIf(C<Ref(lo,-1),-1,0));
x2 = ValueWhen(x1!=0,x1,1);
st = IIf(x2==-1,Hi,Lo);
Plot(Ref(st,-1),"",colorRed,styleNoLine|styleBar|styleNoLabel);
_SECTION_END();

/* The next section calculates and plots the dynamic 3 day pivots */

_SECTION_BEGIN("3 Day Pivots");
Hi1 = IIf(Day()!=Ref(Day(),-1),Ref(HighestSince(Day()!=Ref(Day(),-1),H,3),-1),0);
Hi = ValueWhen(Day()!=Ref(Day(),-1),Hi1,1);
Lo1 = IIf(Day()!=Ref(Day(),-1),Ref(LowestSince(Day()!=Ref(Day(),-1),L,3),-1),0);
Lo = ValueWhen(Day()!=Ref(Day(),-1),Lo1,1);
Cl1 = IIf(Day()!=Ref(Day(),-1),Ref(C,-1),0);
Cl = ValueWhen(Day()!=Ref(Day(),-1),Cl1,1);

rg = (Hi - Lo);
bp = (Hi + Lo + Cl)/3;
r1 = (bp*2)-Lo;
s1 = (bp*2)-Hi;
r2 = bp + r1 - s1;
s2 = bp - r1 + s1;

Plot(s2,"",colorRed,styleBar|styleNoRescale|styleNoLabel);
Plot(r2,"",colorRed,styleBar|styleNoRescale|styleNoLabel);
Plot(s1,"",colorBlue,styleBar|styleNoRescale|styleNoLabel);
Plot(r1,"",colorBlue,styleBar|styleNoRescale|styleNoLabel);
_SECTION_END();

/* This next section calculates and plots the daily pivots using fibonacci ranges */

_SECTION_BEGIN("Daily Fib Pivots");
Hi1 = IIf(Day()!=Ref(Day(),-1),Ref(HighestSince(Day()!=Ref(Day(),-1),H,1),-1),0);
Hi = ValueWhen(Day()!=Ref(Day(),-1),Hi1,1);
Lo1 = IIf(Day()!=Ref(Day(),-1),Ref(LowestSince(Day()!=Ref(Day(),-1),L,1),-1),0);
Lo = ValueWhen(Day()!=Ref(Day(),-1),Lo1,1);
Cl1 = IIf(Day()!=Ref(Day(),-1),Ref(C,-1),0);
Cl = ValueWhen(Day()!=Ref(Day(),-1),Cl1,1);

rg = (Hi - Lo);
bp = (Hi + Lo + Cl)/3;
r1 = (bp*2)-Lo;
s1 = (bp*2)-Hi;
r2 = bp + rg;
s2 = bp - rg;
r2o = bp + (1.272*rg);
s2o = bp - (1.272*rg);
rh = bp + (0.5*rg);
rl = bp - (0.5*rg);
rh6 = bp + (0.618*rg);
rl6 = bp - (0.618*rg);

Plot(s2,"",colorCustom12,styleBar|styleNoRescale|styleNoLabe l);
Plot(r2,"",colorCustom12,styleBar|styleNoRescale|styleNoLabe l);
Plot(rh,"",colorCustom12,styleBar|styleNoRescale|styleNoLabe l);
Plot(rl,"",colorCustom12,styleBar|styleNoRescale|styleNoLabe l);
Plot(bp,"",colorYellow,styleThick|styleNoRescale|styleNoLabe l);
Plot(rh6,"",colorWhite,styleBar|styleNoRescale|styleNoLabel);
Plot(rl6,"",colorWhite,styleBar|styleNoRescale|styleNoLabel);
Plot(r2o,"",colorWhite,styleBar|styleNoRescale|styleNoLabel);
Plot(s2o,"",colorWhite,styleBar|styleNoRescale|styleNoLabel);
Plot(s2o,"",colorBlack,styleArea|styleNoRescale|styleNoLabel) ;
Plot(s2,"",colorPlum,styleArea|styleNoRescale|styleNoLabel);
Plot(rl6,"",colorBlack,styleArea|styleNoRescale|styleNoLabel) ;
Plot(rl,"",colorDarkOliveGreen,styleArea|styleNoRescale|styl eNoLabel);
Plot(rh,"",colorBlack,styleArea|styleNoRescale|styleNoLabel) ;
Plot(rh6,"",colorDarkOliveGreen,styleArea|styleNoRescale|styl eNoLabel);
Plot(r2,"",colorBlack,styleArea|styleNoRescale|styleNoLabel) ;
Plot(r2o,"",colorPlum,styleArea|styleNoRescale|styleNoLabel);
_SECTION_END();

//--end----------------------------------------------------------------------------

I have just noticed the forum software has inserted some gaps where they are not wanted.

If anyone is having trouble with this I can email the code.

Also I have pivots for longer time frames if anyone wants them,
ie
dynamic 3 weekly
monthly
dynamic 3 monthly

These are the ones I find useful, but you can plot any time frame if you want to....weekly, yearly, whatever.

Cheers

Can I use it with EOD?
My short term system is FUBAR :microwave

Hehehe. Just like a cat! (kidding RSPCA- I know not to dry my cat this way)

Thanks Wayne! :D

Found those spaces that were inserted.

Off to digest the info..

Wayne,

Lets fire this thread up again.

Wayne,

Lets fire this thread up again.

I'm game, but I don't want to do live trades, but won't "hindsite trade" either. Purely a look at the action like the charts above.

Great thread, only just realised it was here, thanks for reopening snake :) .

There is a perception that very few people make money, im no judge as to the real number but like most forms of trading, people give up too easily when things go bad, I know I was guilty of this in the past!, but too illustrate, most days I lose, most weeks its 50/50 win and lose, most months I win, 10 out of 12 months this year were profitable.

Cheers

Pager

Great thread, only just realised it was here, thanks for reopening snake :) .

There is a perception that very few people make money, im no judge as to the real number but like most forms of trading, people give up too easily when things go bad, I know I was guilty of this in the past!, but too illustrate, most days I lose, most weeks its 50/50 win and lose, most months I win, 10 out of 12 months this year were profitable.

Cheers

Pager

Pager,

Yes the propaganda is so powerful. If only some sheep did what it took to get an understanding.......

Care to contribute some trades?

An Interesting blog article from a bloke with a bit of credibility:

Ernie is a quantitative trader and consultant who helps his clients implement automated, statistical trading strategies. He can be reached through www.epchan.com. Ernie has worked as a quantitative researcher and trader in various investment banks (Morgan Stanley, Credit Suisse First Boston, Maple Securities) and hedge funds (Mapleridge Capital, Millennium Partners, MANE Fund Management) since 1996. He has a Ph.D. in physics from Cornell University.

http://epchan.blogspot.com/2007/02/in-praise-of-day-trading.html

In praise of day-trading

A recent article by Mark Hulbert in the NYTimes talked about the Value Line's rankings, and how this system is under-performing the market index in recent years. Mr. Hulbert asked Professor David Aronson of Baruch College whether this drop in performance means that the system has stopped working. Prof. Aronson says no: he believes that it takes 10 or more years [my emphasis] of under-performance of this strategy before one can say that it has stopped working! This statement, if taken out-of-context, is so manifestly untrue that it warrants some elaboration.

To evaluate whether a strategy has failed bears a lot of resemblance to evaluating whether a particular trade has failed. In my previous article on stop-loss, I outlined a method to determine how long it takes before we should exit a losing trade. This has to do with the historical average holding period of similar trades. This kind of thinking can also be applied to a strategy as a whole. If your strategy, like the Value Line system, holds a position for months or even years before replacing it with others, then yes, it may take many years to find out if the system has finally stopped working. On the other hand, if your system holds a position for just hours, or maybe just minutes, then no, it takes only a few months to find out! Why? Those who are well-versed in statistics know that the larger the sample size (in this case, the number of trades), the smaller the percent deviation from the mean return.

Which brings me to day-trading. In the popular press, day-trading has been given a bad-name. Everyone seems to think that those people who sit in sordid offices buying and selling stocks every minute and never holding over-night positions are no better than gamblers. And we all know how gamblers end up, right? Let me tell you a little secret: in my years working for hedge funds and prop-trading groups in investment banks, I have seen all kinds of trading strategies. In 100% of the cases, traders who have achieved spectacularly high Sharpe ratio (like 6 or higher), with minimal drawdown, are day-traders.

Evening all,

I scalp the spi with a 50 volume chart, and using the 50 cci..
as you can see a safe trade is the x of the zero line of the cci as marked..
I take the trade off at the x of the +/- 100 and wait for another trade if it comes along..but that of course is up to individual traders.. you can take it off at the x of the zero line..

Hope that this is of some help to scalpers.

Have a great evening.

Take care
ac
;)

Evening all,

II scalp the spi with a 50 volume chart, and using the 50 cci..
as you can see a safe trade is the x of the zero line of the cci as marked..
I take the trade off at the x of the +/- 100 and wait for another trade if it comes along..but that of course is up to individual traders.. you can take it off at the x of the zero line..

Hope that this is of some help to scalpers.

Have a great evening.

Take care
ac
;)
Shows how far the SPI has come in terms of liquidity. Not THAT long ago, 6 or 8 50 volume bars would have taken you into lunchtime . LOL

Evening all,

I scalp the spi with a 50 volume chart, and using the 50 cci..
as you can see a safe trade is the x of the zero line of the cci as marked..
I take the trade off at the x of the +/- 100 and wait for another trade if it comes along..but that of course is up to individual traders.. you can take it off at the x of the zero line..

Hope that this is of some help to scalpers.

Have a great evening.

Take care
ac
;)

nice work acouch:)

Feel free to come and post some more charts/talk to the rest of us punters in the other index threads. Always good to see some more index traders showing up:)

Cheers

Way to complicated for your average joe....

Wayne, how long has it taken you to learn all that?

If you get sick of trading you should start running classes and workshops.

Question I have. How many people lose money doing what you do?

Evening all,

I scalp the spi with a 50 volume chart, and using the 50 cci..
as you can see a safe trade is the x of the zero line of the cci as marked..
I take the trade off at the x of the +/- 100 and wait for another trade if it comes along..but that of course is up to individual traders.. you can take it off at the x of the zero line..

Hope that this is of some help to scalpers.

Have a great evening.

Take care
ac
;)

AC

very very impressive! cheers for that post.

Way to complicated for your average joe....

Wayne, how long has it taken you to learn all that?

If you get sick of trading you should start running classes and workshops.

Question I have. How many people lose money doing what you do?

Had some fun wins and lots of losses day trading!

Way to complicated for your average joe....

Wayne, how long has it taken you to learn all that?

If you get sick of trading you should start running classes and workshops.

Question I have. How many people lose money doing what you do?

If someone is making good mo. from the markets,why would they want to show others the pitfalls and the better way.Only if to set them up to knock them down maybe.

The more traders in the market, the bigger the takings for the experienced.
New traders beware.

If someone is making good mo. from the markets,why would they want to show others the pitfalls and the better way.Only if to set them up to knock them down maybe.

The more traders in the market , the bigger the takings for the experienced.

New traders beware.

LoL,

That is a great conspiracy theory!

Let me tell you, anything I post with a chart is designed to show others what I believe is happening, not to trick them!

I don't agree with you at all, I have received wonderful advice and support from many members of ASF and I am constantly learning from reading members posts.

I bet your a glass half empty kind of guy!:D

LoL,

that is a great conspiracy theory!

Let me tell you, anything i post with a chart is designed to show others what I believe is happening, not to trick them!

I don't agree with you at all, I have received wonderful advice and support from many members of ASF and i am constantly learning from reading members posts.

I bet your a glass half empty kind of guy!:D


I was interested in a reply from ken.I don`t recall whistling.:D

This is a two range chart for the er2..

Entry as you can see, if you miss the first entry, you can get the first retrace the next orange arrow..with the test of the zero line on the 50 cci..


Another example of the 50 cci, and why i take it off at the x of the +/-100 line..orange arrow at the +100, or the green arrow exit at the zero line exit..

Good trades for this evening, nearly my bedtime .

ac
;)

ES..another chart with 50 cci..


ac
;)

NQ..last example of the 50 cci for this evening. Promise :-)

night all

ac
;)

NQ..last example of the 50 cci for this evening. Promise :-)

night all

ac
;)

:)

Welcome aboard, Sunshine ... !~!

So good to see you, still in circulation ... :)

happy days

paul

:)

nice chart acouch, cheers for that! looks very useful, nice & simple, clear signals

interesting post of Waynes with the sharpe stat - I guess it has to be that way with day/short term traders, you'd soon be flushed out if you weren't on top of it

I was interested in a reply from ken.I don`t recall whistling.:D

Woof Woof!:silly:

NQ..last example of the 50 cci for this evening. Promise :-)

night all

ac
;)

Keep them coming acouch,

Very neat, clean & simple system whick looks like it does the trick very nicely.

Which software & data source do you use for your charts? What time frame are you trading to?

Cheers
Joseph

NQ..last example of the 50 cci for this evening. Promise :-)

night all

ac
;)

Wow, very impressive.
So its true - the most simple systems are the most profitable.

Joseph,

For those charts i use

www.sierrachart.com

for data , i use

www.interactivebrokers.com

for front end i use

www.bracket-trader.com

hope that is of some help.
have a great day
ac
;)

Joseph,

For those charts i use

www.sierrachart.com

for data , i use

www.interactivebrokers.com

for front end i use

www.bracket-trader.com

hope that is of some help.
have a great day
ac
;)


Cheers for that.

I take it your working to 5 -10 min time frames.

Those charts are very nicely presented. I will check them out. Thanks for the links.

looking like some more short action today.

Regards
Joseph

Joseph,

I dont use time charts very often, either range, volume, or tic is what i tend to use...

if you look on the charts posted you can see what i have used on each chart...
not all trade with the same ..what suits one might not suit another..

enjoy your day

Adriane

;)

Joseph,

I dont use time charts very often, either range, volume, or tic is what i tend to use...

if you look on the charts posted you can see what i have used on each chart...
not all trade with the same ..what suits one might not suit another..

enjoy your day

Adriane

;)


Cheers Adriane :)

Hi Adriane,
Just came across your post. Nice to see someone who uses indicators as a basis for their trading. I've used them for most of my trading life and just could not do without them

I have tried using just price and volume, but it just does not work for me - its much easier ans faster to use an indicator to detect possible trades.

The CCI is one of my core "tool box" indicators, and I personally find its accuracy well above average. (I use a 14 perioid CCI for share trading)

For those who may be interested - here is some information regarding the CCI and how it may be used.

Commodity Channel Index
This measures the variation of a securities price from its statistical mean.
Its greatest value lies in its ability to identify when prices move beyond their normal range and begin trending

Advantages in using the CCI
Cuts out lag.
A powerful characteristic is its responsiveness toprice action, especially at tops and bottoms. Rarely does the indicator turn more than one day after a price turn
Identifies changes in trend
The CCI should confirm price action. When price makes a bottom/top and turns up/down, the CCI should also make a bottom/top and turn up/down. But when price makes a higher high and CCI makes a lower high than its previous peak, it creates a non confirmation between price and indicator (opposite for lows)
These non confirmations are called divergence and may warn of a trend change
Identifies possible peaks in price.
When the indicator gets to extreme levels, this could indicate that the price may be nearing its peak

Trading signals
Aggressive
Buy when CCI crosses up thro -100 and exit when it crosses down below +100

Intermediate
Buy when CCI crosses up thro zero, and sell when it crosses below -100

ConservativeWait until CCI moves outside of its upper channel line - because that is when price has probably shifted from its normal range into a trending mode
Buy when the CCI crosses above the +100 line and exit the long position when the CCI crosses below the +100 line

I hope other readers find the above useful

Have a good day
Peter :)

I made a boob in the above post (rushing for lunch)
Correction
Intermediate
Buy when CCI crosses up thro zero and sell when it crosses below +100 (or zero)
Conservative
Same exit ie when it crosses below 100+ (or zero)

I trade EOD (maybe this post should not be included in this "thread"?)

I use the above as part of my breakout trading setup - it gets me into the market early, I'm usually in a few days before the normal breakout characteristics are evident ie turning up of std dev indicator/expansion of /volume etc. - ie while the market is still non volatile "quiet"

I use the CCI exits as a guide, my normal exit is based on an ATR multiple, trailing stop.

Peter :p:

Afternoon Peter,

I see you use the 14 cci for trading stocks eod.

have you tried the 20 cci for eod stocks, that cuts out some noise.

have a great day

Adriane

;)

Afternoon Peter,

I see you use the 14 cci for trading stocks eod.

have you tried the 20 cci for eod stocks, that cuts out some noise.

have a great day

Adriane

;)

Hi guys, have any of you back tested these CCI methods and if so what are the results?

Cheers,

Afternoon Peter,

I see you use the 14 cci for trading stocks eod.

have you tried the 20 cci for eod stocks, that cuts out some noise.

have a great day

Adriane

;)
Agree AC.

Considering the construction of the CCI is based around the volatility corrected relationship of the typical daily price to a simple moving average, 20 is a more sensible setting.

fwiw

Cheers

Hi guys, have any of you back tested these CCI methods and if so what are the results?

Cheers,
It would be pretty tough to code I reckon CanOz. I'd be interested to see if anyone has done it accurately as well.

It would be pretty tough to code I reckon CanOz. I'd be interested to see if anyone has done it accurately as well.

I only thought to ask because of the EOD use.

Cheers,

I only thought to ask because of the EOD use.

Cheers,
Basically, Indicators used in a mechanical sense suck. There are a few here who have backtested every indicator known to man, mechanically. Nothing works.

Do indicators have a use? In my opinion they do.

1/ They are useful scanning tools to bring up trading candidates based on one or another indicator criteria.

2/ For discretionary (but rule based) traders, they can help to interpret the raw price data. I always have an indicator on my charts. Normally they just add a bit of colour, but sometimes I may look at the indicator as a secondary reference, sometimes as a crutch to make a trading decision. (Yes "a crutch". Know thyself. :eek: )

3/ There are even traders who trade off indicators only without reference to the price at all eg Woodie and some of his minions. But these people have become inventive in interpreting the indicator they use. No "standard" uses.

The upshot of all this is that the trading signals become somewhat arbitrary, even if based on some method or rule set, but makes it impossible to backtest.

Peter and Adriane

what other indicator you have in your toolbox ?

thanx for the CCI, it been great learning from you all.

cheers.

Basically, Indicators used in a mechanical sense suck. There are a few here who have backtested every indicator known to man, mechanically. Nothing works.

Do indicators have a use? In my opinion they do.

1/ They are useful scanning tools to bring up trading candidates based on one or another indicator criteria.

2/ For discretionary (but rule based) traders, they can help to interpret the raw price data. I always have an indicator on my charts. Normally they just add a bit of colour, but sometimes I may look at the indicator as a secondary reference, sometimes as a crutch to make a trading decision. (Yes "a crutch". Know thyself. :eek: )

3/ There are even traders who trade off indicators only without reference to the price at all eg Woodie and some of his minions. But these people have become inventive in interpreting the indicator they use. No "standard" uses.

The upshot of all this is that the trading signals become somewhat arbitrary, even if based on some method or rule set, but makes it impossible to backtest.

Wayne, aside from Pivots, what other tools do you like to use in trading commodities?

Cheers,

Wayne, aside from Pivots, what other tools do you like to use in trading commodities?

Cheers,

I use different tools for different contracts. As I only look at less than 30 charts, I can do that and some contacts behave completely differently to each other.

Also it depends whether I'm trading a swing, or trying to pick up a trend. But basically what you see on my intraday charts in this and the index thread is what I use in higher time frames as well. Just different parameters. I will throw a trendline on and maybe a fib retracement just for fun.

But thats it.

Oh and the ubiquitous oscillator on the bottom as discussed.

Ron1n,

I have always used a stochastic..14/3/3..as in those days i had never heard of cci..and the 34 ema on price for eod charts, as i have found that to be of great use,and as some here who would know me from previous charts posted eod, i use the Andrew's pitchfork, which i find runs true to form with fib nos, never ceases to amaze me really.as it also goes into time.

My futs charts all look the same, even metatrader for fx..i like to keep them all standard

I use sierra chart and fibonacci trader..

I am not as good with ft as frank, but I manage :-)

Hope this is of some help to you.

Enjoy your evening

ac

;)

Hi Canaussieuck
Backtesting:
Why not do some backtesting for yourself?
My current software is Bullcharts, prior to that I used Metastock - they both have a training mode - whereby you can step your charts back in time, then click forward one period at a time - pick off your trading signals as they appear at the right hand edge of the screen and keep clicking forward till you get an exit - be it a stop loss or profit
You can select charts from periods where the overall market was in different phases ie up, down, sideways
Or you can just pick any old chart and check the results which your indicator signals give. The results are there before your eyes, but if you cheat - you are only cheating yourself

I have found my entries to be approx 70% good. I do not buy a full position on initial entry, the stock has to prove itself before I buy the other half. If the stock looks good, I also pyramid some extra capital into the trade.

Why not just bring up a plot of the CCI on yoiur screen and compare it with price action - any stock.
I think you will be pleasently surprised.

ROn1n
Indicators in my toolbox
My core indicators are: RSI(fast), CCI, RO, Stochastic (very slow), MACD, ADX, Std Dev, GMMA's and volume. Most are just used for confirmation
My signals come from CCI and RSI
I primarily trade breakouts and trend continuation following an uptrend correction. I sometimes trend trade.
I trade stocks below $5 and which have a minimum daily traded value of $300,000 - thats the first scan I do each night (2mins). I then do another scan on the results of the previous scan, looking for all my possible entry
signals ((2mins)
This gives me my possible trades for to-morrow. I eyeball the charts, usually around about 20/30 to find what I think offers the best risk / reward. I'm more often right than wrong and my risk/reward ratio is pretty good.

Adriane,
Thank you for the tip, I'll try out the 20 period CCI
I've been using 14 for a l-o-n-g time. I tried a whole range of settings before I settled on 14, but its no big deal to try out the 20 period again. I always try to keep an open mind - nothing is set in concrete.

I use one of my "windows" for oscillators. I display the 14 period CCI and a 63 period Regression Oscillator on it. The Regression oscillator is based around linear regression, and I have my own rules on how I interpret their combination, based on my own observations

Indicators in general - it is always worth looking at indicator extremes (abnormal conditions)

Wayne
Indicators or price action - its our individual choice, what works for one person may not suit another - as they say "they are only tools"

Regards
Peter :)

Hi Adriane,
Have just overlayed a 20 CCI on a 14CCI - looks promising, it certainly filters out some "dodgy" trades, on the other hand sometimes the signal is a bit late

Hi Wayne
How do you come to the conclusion that "20 is a more suitable setting"?
I use a 45 period Stochastic on my EDO data - it gives me what I am looking for.
(Its hard to teach an old dog new tricks)

This posting takes up quite a bit of time, but its back to "work" again to-morrow.

Have a good day
Peter :confused:

Hi Wayne
How do you come to the conclusion that "20 is a more suitable setting"?
I use a 45 period Stochastic on my EDO data - it gives me what I am looking for.
(Its hard to teach an old dog new tricks)

This posting takes up quite a bit of time, but its back to "work" again to-morrow.

Have a good day
Peter :confused:
20 MA (as is 50 & 200) is followed by the bigger players, and CCI is an oscillator based around a moving average.

a lot of u guys have mentioned RSI for buy indicator. Can you eleborate ? like RSI 2 or RSI 15.

Also what criteria must a stock satisfy for you daytraders so that it becomes a buy. What do u use for exit.

Peter and Adriane, I have learned a lot from you thanx a lot to you, and to all the other experienced traders for your input. This forum is gold mine.

Good morning,

This is my spi daily working chart..i always work on a daily chart..

targets and dates on the chart..

green lines are the Andrews pitchfork.

the cci is a 50 with a 14 overlay

stoch is a 14/3/3

the yellow ema on price is a 34

have a great day

ac

;)

Guys excuse me for going off topic,

The CCI is a really great indicator.

I never used it before i read your posts in this topic.

I have found using a 16 period on a daily chart works great in confirming a reversal after a correction with my other price analysis.

Once the price hits over sold and moves back above the -100 it lines up with my entries! Great to have found something that adds to the evidence.

Thanks for introducing this indicator to some of us that had not seen it before.

I will get a chart on later.

WARNING.

Use it CCI or ANY OTHER Oscillator ONLY within an established trend,as a confirmation indicator for a possible resumption of trend after a pullback.

Place it on a non trending stock and You'll see what I mean---particularly if you attempt to trade it realtime.

WARNING.

Use it CCI or ANY OTHER Oscillator ONLY within an established trend,as a confirmation indicator for a possible resumption of trend after a pullback.

Place it on a non trending stock and You'll see what I mean---particularly if you attempt to trade it realtime.


So damn true Tech,

MA's and other indicators do turn into chaos in a sideways market.

Hi R0n1n,
The RSI is my number 1 indicator - it is never off the screen, all other indicators are basically filters which help me decide which stock to trade from my scan candidates

The RSI is ideally suited for providing my scan criteria to locate possible trades.

I do not use it in the conventional way but rather as a derivative of Constance Brown's definition and more recently that of John Hayden

PS if you delve into the RSI theory - you know what? - these famous fibonacci ratios appear!

I will not tell you how I actually trade (thats my beliefs), you have to put in the time experimenting and find what works for you. But what I do not mind telling you is what features I have fouind useful regarding my "toolbox", how you may use them is up to you

Before using any indicator, you should at least have an idea of how it works - then the signals you get will have more meaning.

There will always be sceptics who dismiss a theory/concept because it does not fit in with their beliefs, but if you have an open mind and at least check it out - you never know what you may find useful

When it comes to selecting trading stocks - if they meet your beliefs, then thats what will most likely "work for you" and you should have no problems trading the results

The RSI
The RSI is the ratio of the total daily changes in price in up moves, to the total daily changes in price in down moves, over the selected period
ie it measures the internal strength of a security

RSI=100-[100/1+(U/D)]
Where U=average upward price change over the selected period
D=average downward price change over the selected period

If U and D were equal, then RSI would be 50
If U was greater than D (up move), then RSI would be hIgher than 50
If D was greater than U (down move), then RSI would be less than 50

The RSI can be used to define the state of price action, ie uptrend, consolidation or downtrend

RSI attributes
Very good at defining support and resistance levels*****
Dow theory can be applied to the RSI
Trend lines can be drawn on the RSI
RSI /price divergence

To help you understand the following - it may be of help if you bring up the RSI on your monitor, in a window above the price chart
Set the RSI period to 7
Draw in green dotted lines at the 40 - 80 levels
Draw in red dotted lines at the levels of 60 and 20
Draw in a faint black dotted line at the 50 level
(I would have done this for you but I do not know how to post a chart)

Significant RSI levels
Consolidation(sideways price movement)
RSI 40-60
when the RSI trace is contained within the 40-60 levels, this tends to indicate sideways consolidation. Some indicators do not work in non trending situations, so these levels may be of interest to some traders
RSI 50-60
If the trace is contained within the 50-60 level, this indicates that the probable move following will be up
RSI 40-50
If the trace is contained within the 50-40 level, this indicates that the probable move following will be down

UPTREND
RSI 40+
An existing uptrend can be considered to be still in place as long as the RSI does not fall below 40
A fall below 40 would signal a trend reversal
RSI 40-80
An uptrend exists when the RSI trace is contained within the 40-80 levels
RSI 60-80
When the RSI trades above 60 the price is trending up
RSI 40-60
When the RSI trades in this range - price is trading sideways
RSI 40
If the trace falls below 40, this signals the expected price movement will be down, and thus indicates the start of a down move. This is confirmed when the subsequent trace is contained within the 60-20 levels
RSI 60
If the trace passes up thro 60, this signals the expected price movement will be up, and thus indicates the start of an up move. This is confirmed when the subsequent trace is contained within the 80-40 levels
RSI 80+
When the RSI trades over 80 and trending up, the recent price action up days moves far exceed price down moves, this is an abnormal condition that cannot last too long
This relates to fast explosive moves
When the RSI falls back below 80 - this is a good indication that the max price has been achieved and indicates a good time to exit the trade

Down trend
Follows the same principles as above and I am sure that you can work them out for yourself

I only trade long, but it would be
no big deal to figure out how to trade short

If you want to trade from the RSI on its own then possible buy signals are:
RSI levels rising up thro 40, 60 and 80
Sell signals : RSI levels falling thro 60
RSI 40 levels are usually associated with the comencement of an uptrend following a retracement of an uptrend.
RSI 60 and 80 are associated with uptrends from congestion

Thats it - easy and simple

All our analysis is doing is hopefully increase the probability of our entry being good - the exit is more important!!

Anyway, I hope the above rambling will be of use to you

Keep your position size and RISK small while you are trying out something new

The above works for me - it may not work for you

Posting does not come naturally to me, I hope you can make some sense of the above and that it is something you can make use of

Posting is very time consuming for me - this is my last attempt. I'll leave the good stuff for the more experienced and talented posters

I hope your trading proves to be successful
Have a good day
Peter :)

might be of interest for some,

some notes from a trader a long time ago regarding RSI...

Learn your tools, but don't ignore the laws a physics enroute. There is enormous difference between looking at an adulterated (ie 14 period RSI) and using the raw 28 period cycle. You have the luxury of measuring "angular velocity" vs "angular acceleration" from anywhere on the indicator ..

use the 28 period for better results with a 14 and 55
moving average over it for reference. The RSI was originally
constructed around the biggest oscillation cycle that affects the
earth, that being the moon and its 28 period cycle..

have a great day
ac

;)

I don't use RSI at all but saw this article on using a 2 period RSI:

http://www.tradingmarkets.com/.site/stocks/commentary/editorial/2-Period-RSI.cfm

Quite the opposite of Adriane's comments (and not meant to contradict at all) and for interest sake only.

Cheers

WARNING.

Use it CCI or ANY OTHER Oscillator ONLY within an established trend,as a confirmation indicator for a possible resumption of trend after a pullback.

Place it on a non trending stock and You'll see what I mean---particularly if you attempt to trade it realtime.

Hi Tech,

Did you mean to say that oscillators should be used in a trading range ?? In a strongly trending period, these oscillators take you out of the trade too quickly. Therefore systems like TT should be used for strongly trending markets as they have the ability to capture the bulk of the uptrend. Appreciate your clarification.

ok.. based on the info from a lot of u I created my chart. What do you think ? My reading is that it got some steam in it, but not for long.

Your comments please.
edit : the chart parameters are not clear so I'll explain them
the First one is price with EMA15 (red) and MA 15(blue)
CCI 14
volume
RSI 15
SMI 14,3,3

Hi R0n1n,
I think we are cluttering up this thread - it really is for day trading - I was responsible for the deviation due to a remark I made - I did not think it would lead to this

Sorry Wayne

Anyway, just to complete this EOD stuff and my involvement, I'll answer your question

By the way I use RSI 7 it makes the signal more responsive but not too noisy.

Before you enter a trade you should have a management plan, including the condition (s) under which you will exit. When these conditions exist - you exit!!

"Does the move have some steam left" - depends on your risk level and what time frame you are using, and if you intend exiting on the first available exit signal

My interpretation of this trade would be classified as a breakout from congestion - these trades are great because you can set really tight stops

The 1st confirmed entry is 2nd April - when RSI passed up thro 60 and CCI crossed zero and my other indicators confirmed it.
The 2nd confirmed entry (conservative) was on the 10th April when RSI passed up thro 60 and CCI passed up thro 100+
(PS I never act on a single signal)
Entry signal must correspond to a break above a resistance

Exit
Ist exit signal was to-day - when RSI fell below 60 and CCI fell below 100+
Would I have taken this signal? Probably not, this retracement has been on low volume - probably just profit taking, and my other indicators back this up eg the ADX14 has not turned down

If you look at the big picture - this trade could have good potential

According to the monthly chart - this move is just beginning, and the weekly backs it up

But who knows!!

Thats it - just my interpretation, definately not a buy signal!!!

Over and out
Peter :)

thanx Peter, I didnt mean to hijack this thread, but couldnt resist asking since soo many experienced traders are on this thread.

Your comments have cleared a big cloud. I am actually going to save that jpg with ur comments at the bottom. lol.. for reference.

BTW .. I traded my first cfd today.. was PDN .. made a decent amount. had bought at 9.45 sold at 10.2 . I know I just made about 6% but baby steps for now till I get my confidence through experience.

dont know where this should go, but handy for traders that trade outside oz for times..a free download..very good :-)

http://www.qlock.com/

have a great weekend

ac

;)

some lower targets for the er 2


have a great weekend

ac

;)

oops wrong chart..:-)

next stage..:-)

trying for 836.30

This is a day trading system I am learning at the moment.

Its called Floor Trader System.

you buy off retracements in a trend.

see chart with some entrys

Hi all

I am an intraday spi trader. I'm posting what I’m looking to trade pre-open and then updates during the day on a blog. Been at it full time (trading that is) for 2 years if that means anything??

You can check out what I'm doing at...


http://tremblinghandtrader.typepad.com/