I mentor retirees free of cost as part of a non-profit community organization. I have done a free simple course of buying options for risk-averse investors.
But buying options is like buying lottery tickets.
Elderly traders wanted something more - that can stimulate their brains as well as give them regular income opportunities since banks are no more paying any interest on Savings Bank accounts.
The system is a result of the manual trading done by the elderly traders in a year.
It is for the people who are willing to trade index futures by putting in limited time and monitoring charts during that period. A small risk is involved. But the trading method is relatively not intense and does not put pressure on time. It does not require any kind of elaborate technical analysis or the use of technical indicators.
The only requirement is to avoid trading during economic data release time and stop trading during major geo-political events like the one happening in Europe now.
The simplicity of the system is based on a belief system that trading is all about making assumptions. Some use their brains and some use borrowed brains (indicators). For me the reality is that there is an auction, there is an auctioneer (designated market maker) and there are participants.
Unlike other auctioneers, those managing financial trading don't get paid a fee. They have to earn it and so are not neutral. Sometimes, they join hands with cartels of bidders, sometimes have to use their own pockets to keep the market alive.
Essentially, their task, like a casino operator, is to keep the trading process attractive enough for participants.
I use game theory in day trading (tracking the assumed market makers' moves in terms of size mainly - not timing) using mind and machines.
Mechanical planning is required for spotting assumed favourable trading locations and the machine (EA) is used to execute scalping transactions at those locations.
Essentially, known triggers of volatility matter. Chart reading is required.
Pre-trading needs just 10 minutes of preparation:
1. Note down the data release events that can act as a catalyst for triggering volatility. Forex Factory Calendar provides the information.
2. No analysis of any kind or forecasting is needed.
3. Day trading and short-term scalping will be practised.
4. Attach an indicator that takes a look at the High, Low and Mid-price movements of the previous 2 or 3 days maximum.
5. Attach any dynamic indicator that divides the daily price movements into four quarters to study the mean reversion tendencies of the symbol.
6. Attach two simple Moving Averages indicators for taking a bird's eye view of the High and Low. The Moving Average could be for 10, 20 or 40 periods for short term range and of 200 for high range.
7. Take a look at the statistics generated in the last 1-minute bars of 1440 1 minute. The indicator is attached.
8. A simple sideways detection indicator will help see the early formation of the sideways zone. The indicator is attached.
The system will focus on using skills and lean pockets to generate part-time income by spending not more than 4 hours.
Scalping with non-directional bias needs to keep the brain active and to facilitate spotting locations on the chart which display pricing movements getting exhausted and where the market seems to be taking a breather in terms of momentum and speed of velocity.
The trading system is basically for risk-averse people who can take the small loss for making bigger profits and not spend hours on the screen. It’s a non-directional strategy and requires just watching the charts and waiting for the formation of a sideways zone. Manual trade planning is required.
Entry and exits
Entry size and equity loss are based on the previous 3 days' statistics.
EA will draw pending orders based on those inputs.
Plan like a human, trade like a machine is my core method where I plot trades manually on demand (no preparation is needed) and restrict myself to the role of a machine operator who will start the machine when the brain gives entry signals by identifying suitable consolidation or compressed range spots.
The machine cannot generate entry signals. It is used Only for executing trades rapidly.
The advantage of using a machine is that your mind remains in control of the situation and is free to see how the price action is moving the market and arousing emotions. You will have to thank the machine for affording you the freedom to think and set up a trading plot.
Machines can facilitate capturing a sizable portion of a price range formed by price movements moving in increments of tiny sizes in such a way that unless they reach a size that can be traded in a cost-efficient manner, you can't trade.
Index futures commission for two way trade is costs never more than two ticks of the one contract. You can trade even 8 pips movements. Trading costs are easily covered by this figure.
Retiree learners have been trading manually for a year or so. The results from one year of manual trading of fixed size grids are astounding.
I don't know Excel or any programming language. I have been helped by a wonderful person FF member BlueRain for producing the statistics indicator.
The introduction of the EA will help increase the volume by at least 5 times and ensure income targets are being made in a short time. 80% wins is the goal.
It will help catch Buy Low and Sell High (Buy Limit) and Sell High and buy low (Sell Limit) with Equity loss acting as risk controller. Profit protection will be by trailing stop.
Grid trading is a play on averaging down or averaging up and the risk is substantially lower than that of lots traded in lumpsum at a time.
When you make a count of 1440 bars, each moving in a single minute generates from 0 to 30 points for the DAX index while the daily average ends up open to close with a total of 148 points in 1440 minutes of trading. Amazingly, the length of the one-minute price candle travelled - up, down & sideways - covering 21,265 points while ending the day (1440) minutes at an average return of only 148 points or less than one-quarter per cent of the total of 21,255 points.
It can be compared to the making of homemade condensed milk - thick and creamy where milk is boiled, simmered and reduced to some kind of a thick paste. Volatility is like boiling or simmering milk and the daily average is the condensed milk.
You will be able to visually see how the price levels zig-zag, changing directions at various times, giving no idea whether it is travelling up or down or is lost in the traffic (volume) but the retirees in one year of manual practice were able to catch trades without getting disturbed by so-called random movements of the price.
Trades with smaller sizes that naked eyes may not be able to detect easily and of such smaller ranges that may be termed as "Not worth trading" were being detected by the traders with some effort and strain on eyes. They made a profit in spite of the manual execution of trades being done. Planning pending trades manually and entering very quickly is somewhat strenous.
Only a bot (EA) can help in executing trades rapidly - like a machine gun shooting bullets. It is not martingale trading. Fixed lots are traded. And certainly not with a multiplier effect - doubled or tripled as martingale requires.
But buying options is like buying lottery tickets.
Elderly traders wanted something more - that can stimulate their brains as well as give them regular income opportunities since banks are no more paying any interest on Savings Bank accounts.
The system is a result of the manual trading done by the elderly traders in a year.
It is for the people who are willing to trade index futures by putting in limited time and monitoring charts during that period. A small risk is involved. But the trading method is relatively not intense and does not put pressure on time. It does not require any kind of elaborate technical analysis or the use of technical indicators.
The only requirement is to avoid trading during economic data release time and stop trading during major geo-political events like the one happening in Europe now.
The simplicity of the system is based on a belief system that trading is all about making assumptions. Some use their brains and some use borrowed brains (indicators). For me the reality is that there is an auction, there is an auctioneer (designated market maker) and there are participants.
Unlike other auctioneers, those managing financial trading don't get paid a fee. They have to earn it and so are not neutral. Sometimes, they join hands with cartels of bidders, sometimes have to use their own pockets to keep the market alive.
Essentially, their task, like a casino operator, is to keep the trading process attractive enough for participants.
I use game theory in day trading (tracking the assumed market makers' moves in terms of size mainly - not timing) using mind and machines.
Mechanical planning is required for spotting assumed favourable trading locations and the machine (EA) is used to execute scalping transactions at those locations.
Essentially, known triggers of volatility matter. Chart reading is required.
Pre-trading needs just 10 minutes of preparation:
1. Note down the data release events that can act as a catalyst for triggering volatility. Forex Factory Calendar provides the information.
2. No analysis of any kind or forecasting is needed.
3. Day trading and short-term scalping will be practised.
4. Attach an indicator that takes a look at the High, Low and Mid-price movements of the previous 2 or 3 days maximum.
5. Attach any dynamic indicator that divides the daily price movements into four quarters to study the mean reversion tendencies of the symbol.
6. Attach two simple Moving Averages indicators for taking a bird's eye view of the High and Low. The Moving Average could be for 10, 20 or 40 periods for short term range and of 200 for high range.
7. Take a look at the statistics generated in the last 1-minute bars of 1440 1 minute. The indicator is attached.
8. A simple sideways detection indicator will help see the early formation of the sideways zone. The indicator is attached.
The system will focus on using skills and lean pockets to generate part-time income by spending not more than 4 hours.
Scalping with non-directional bias needs to keep the brain active and to facilitate spotting locations on the chart which display pricing movements getting exhausted and where the market seems to be taking a breather in terms of momentum and speed of velocity.
The trading system is basically for risk-averse people who can take the small loss for making bigger profits and not spend hours on the screen. It’s a non-directional strategy and requires just watching the charts and waiting for the formation of a sideways zone. Manual trade planning is required.
Entry and exits
Entry size and equity loss are based on the previous 3 days' statistics.
EA will draw pending orders based on those inputs.
Plan like a human, trade like a machine is my core method where I plot trades manually on demand (no preparation is needed) and restrict myself to the role of a machine operator who will start the machine when the brain gives entry signals by identifying suitable consolidation or compressed range spots.
The machine cannot generate entry signals. It is used Only for executing trades rapidly.
The advantage of using a machine is that your mind remains in control of the situation and is free to see how the price action is moving the market and arousing emotions. You will have to thank the machine for affording you the freedom to think and set up a trading plot.
Machines can facilitate capturing a sizable portion of a price range formed by price movements moving in increments of tiny sizes in such a way that unless they reach a size that can be traded in a cost-efficient manner, you can't trade.
Index futures commission for two way trade is costs never more than two ticks of the one contract. You can trade even 8 pips movements. Trading costs are easily covered by this figure.
Retiree learners have been trading manually for a year or so. The results from one year of manual trading of fixed size grids are astounding.
I don't know Excel or any programming language. I have been helped by a wonderful person FF member BlueRain for producing the statistics indicator.
The introduction of the EA will help increase the volume by at least 5 times and ensure income targets are being made in a short time. 80% wins is the goal.
It will help catch Buy Low and Sell High (Buy Limit) and Sell High and buy low (Sell Limit) with Equity loss acting as risk controller. Profit protection will be by trailing stop.
Grid trading is a play on averaging down or averaging up and the risk is substantially lower than that of lots traded in lumpsum at a time.
When you make a count of 1440 bars, each moving in a single minute generates from 0 to 30 points for the DAX index while the daily average ends up open to close with a total of 148 points in 1440 minutes of trading. Amazingly, the length of the one-minute price candle travelled - up, down & sideways - covering 21,265 points while ending the day (1440) minutes at an average return of only 148 points or less than one-quarter per cent of the total of 21,255 points.
It can be compared to the making of homemade condensed milk - thick and creamy where milk is boiled, simmered and reduced to some kind of a thick paste. Volatility is like boiling or simmering milk and the daily average is the condensed milk.
You will be able to visually see how the price levels zig-zag, changing directions at various times, giving no idea whether it is travelling up or down or is lost in the traffic (volume) but the retirees in one year of manual practice were able to catch trades without getting disturbed by so-called random movements of the price.
Trades with smaller sizes that naked eyes may not be able to detect easily and of such smaller ranges that may be termed as "Not worth trading" were being detected by the traders with some effort and strain on eyes. They made a profit in spite of the manual execution of trades being done. Planning pending trades manually and entering very quickly is somewhat strenous.
Only a bot (EA) can help in executing trades rapidly - like a machine gun shooting bullets. It is not martingale trading. Fixed lots are traded. And certainly not with a multiplier effect - doubled or tripled as martingale requires.
Practice makes a person perfect
