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Combining strategies

  • Post #1
  • Quote
  • First Post: Aug 11, 2005 10:36pm Aug 11, 2005 10:36pm
First of all I would like to thank Merlin, James16 and MB for all of your insight and expertise. I am a very big newb and have barely scratched the surface of trading, but I do see it as a viable solution to becoming a stay-at-home dad, right now my job only allows me to be home 36 hours at a time at most and I am missing precious moments with my little family. My question is this, would it be wise to combine the strategies of james16 and MB as well as use a pivot point calculator, or would this just be waisting time?
Quoting rjwmam
First of all I would like to thank Merlin, James16 and MB for all of your insight and expertise. I am a very big newb and have barely scratched the surface of trading, but I do see it as a viable solution to becoming a stay-at-home dad, right now my job only allows me to be home 36 hours at a time at most and I am missing precious moments with my little family. My question is this, would it be wise to combine the strategies of james16 and MB as well as use a pivot point calculator, or would this just be waisting time?
learning new things is never a waste of time. the main thing is demo and learn before you risk real money. combining what i do with price action, fib confluence and pivot levels with mb's stuff is certainly viable. what i do can be a great filter with a ma cross sytem. i already have systems like mb's that i do just that. learn and practice until you can make money on demo for at least a month or two then give it a whirl with micro lots at fx solutions. oh, and stick around the forum. jim
Quoting rjwmam
First of all I would like to thank Merlin, James16 and MB for all of your insight and expertise. I am a very big newb and have barely scratched the surface of trading, but I do see it as a viable solution to becoming a stay-at-home dad, right now my job only allows me to be home 36 hours at a time at most and I am missing precious moments with my little family. My question is this, would it be wise to combine the strategies of james16 and MB as well as use a pivot point calculator, or would this just be waisting time?
welcome to the forum!

the trading "style" that you end up using down the road will likely be some combination of traders that you read about or meet. at least thats what happened with me, but then again i am not the most creative individual out there. i steal a little bit from everyone, and in the end it becomes my own, something i created.

on the more technical side of combining strategies, watch out for multicollinearity, it can be a fatal flaw.

from investopedia...
Multicollinearity is a statistical term for a problem that is common in technical analysis. That is, when one unknowingly uses the same type of information more than once. Analysts need to be careful and not utilize technical indicators that reveal the same type of information.

Here is how John Bollinger states it: “A cardinal rule for the successful use of technical analysis requires avoiding multicollinearity amid indicators. Multicollinearity is simply the multiple counting of the same information. The use of four different indicators all derived from the same series of closing prices to confirm each other is a perfect example.”

The issue of multicollinearity is a serious issue in technical analysis when your money is at stake. It is a problem because collinear variables contribute redundant information and can cause other variables to appear to be less important than they really are. One of the real problems is that sometimes multicollinearity is difficult to spot.
Relax and be happy.
You heard it here first, playa.

I will definitely have to avoid that as I build my own system. Now, I'd like to put an open question to the forum:

What are the best books to start off with to get me into this game? I'm hungry for information.
Quoting Far From Average
What are the best books to start off with to get me into this game?
ahhh, my favorite question

not long ago FF had a contest where we gave away my 10 favorite books...collectively, i feel they hold the secrets to professional trading.

see http://www.forexfactory.com/index.php?page=contest
and http://www.forexfactory.com/forexfor...ead.php?p=8983

btw, since the contest i was turned on to Fred Gehm. i would now replace Ralph Vince's book with Gehm's.
Relax and be happy.
Looks like I need to hit the books! Thank ya.
Just another newbie and so glad for this good honest info, trying to pick out the nuggets psychologically confusing at times. Also been demoing about 1 year, making all the classic mistakes but beginning to find the kind of trader I am. The book info Merlin direction is just what I needed. Using Robs p/sar though didn't get in at the beginning 28th July!! Still not good at reading the signals, as for backtesting I have no clude. But I take on board that learning not to consider multi signals that give same information was a great tip I'm sure Merlin.... so thanks very much for that!
Blue
Quoting rjwmam
First of all I would like to thank Merlin, James16 and MB for all of your insight and expertise. I am a very big newb and have barely scratched the surface of trading, but I do see it as a viable solution to becoming a stay-at-home dad, right now my job only allows me to be home 36 hours at a time at most and I am missing precious moments with my little family. My question is this, would it be wise to combine the strategies of james16 and MB as well as use a pivot point calculator, or would this just be waisting time?
i have been pondering your question and have some further thoughts. let me give you an example of trading mb's crossover system with some of the things that i use. please understand this is just not fyi it is what i already do. first of all i trade over a dozen personal " systems " developed from different things i learned from different people(just as merlin). a couple of them are ma crossover systems traded with the longer term trend on 30 min charts. if i get a crossover signal to go long and price is 5 pips under a weekly or monthly pivot or fib confluence there is no way i am taking that trade for obvious reasons. now, if i get a crossover signal to go long and price has just ret back to a pivot level or fib ret(support) thats when i get ready to make money. combine this kind of thinking with a knowledge of price action analysis and you are in the drivers seat. if this sounds complicated trust me it is not, it just takes focus and practice, practice, practice. AND REALISING THAT THERE IS ANOTHER PERFECT TRADE RIGHT AROUND THE CORNER IF YOU MISS ONE. rifle shots not shotguns. jim
What would you guys think if we started a thread titled lessons learned? This way we could post the outcomes of trades that we entered and exited, good or bad so that we could critique each other and get some valuable advice. Would this help anyone or would this just waist space on this forum?

Thanks,

Ryan
"combine this kind of thinking with a knowledge of price action analysis and you are in the drivers seat".James whilst your answer was very concise and helpful, this part confused me. Is knowledge of price action analysis separate to the technicals eg. continuing weight of twin trade deficits, lack of foreign investment as the underlying factors keeping the Usd weak. This I am using as an example but could just as easily use the present oil conundrum - which is more fundamentals. Or do you mean price action as in what you know about the pairs underlying nature and differences to others as a alternative view to technicals? Maybe I'm making a meal of this for keep it simple stupid is alway a good back to basics resolve. However having come in over a year ago (and not yet live because I'm just not there yet!!) I have only just learnt that objectives and exits are vital and it seems my personal learning curve is to cover everything I can for a foundation before I can solidify that foundation by picking what works for me - that process has now begun. Any guidance about your understanding of "price action analysis" would be very useful?
Quoting blueslate
"combine this kind of thinking with a knowledge of price action analysis and you are in the drivers seat".James whilst your answer was very concise and helpful, this part confused me. Is knowledge of price action analysis separate to the technicals eg. continuing weight of twin trade deficits, lack of foreign investment as the underlying factors keeping the Usd weak. This I am using as an example but could just as easily use the present oil conundrum - which is more fundamentals. Or do you mean price action as in what you know about the pairs underlying nature and differences to others as a alternative view to technicals? Maybe I'm making a meal of this for keep it simple stupid is alway a good back to basics resolve. However having come in over a year ago (and not yet live because I'm just not there yet!!) I have only just learnt that objectives and exits are vital and it seems my personal learning curve is to cover everything I can for a foundation before I can solidify that foundation by picking what works for me - that process has now begun. Any guidance about your understanding of "price action analysis" would be very useful?
i think i understand your question, price action analysis is technical analysis in a way i guess. for a better understanding see the chart thread. when i refer to price action analysis i am refering to the study, memorization and understanding of what a bar of time on a chart means. it could be any length of time, 1 min to a monthly bar. i use bar charts but some of the many examples in candlesticks would be a doji, hammer etc. it takes time but learning to know the difference between a bullish or bearish bar is critical to anyones trading success in my opinion. every trader should have a general understanding of the major bullish and bearish bars/candlesticks. it also should be noted that price action analysis is not restricted to one bar. after spending a year or so buried in understanding and memorizing these bars and patterns my trading finally went from 50/50 to 70/30 or better if i play by the rules and not get trigger happy. hope that helps. jim
I also thank you for this post. because it can add to my insight.
Make sure you try this. Because indeed quite often there is a situation when a classic strategy does not work in the market. That is, it is impossible to use it at all without some adaptation. And if this approach looks working for you personally and you personally understand which assets it can be applied to, then be sure to take it in your work. The only thing that's important is to work out a new strategy in practice, and of course to avoid unnecessary risk, start with demo trading. If after a couple of weeks of active trading you realize that everything is okay, then you can include it in your real trading and be sure to share your results, because I am always interested in finding some original information, which allows you to look at the market more widely.
  • Post #14
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  • Last Post: Feb 20, 2020 3:00pm Feb 20, 2020 3:00pm
The trading "style" that you end up using down the road will likely be some combination of traders that you read about or meet. at least that's what happened with me, but then again i am not the most creative individual out there. i steal a little bit from everyone, and in the end it becomes my own, something i created.
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