Trend Balance Point System by J. Welles Wilder Jnr.

Hi,

Is anybody trading using this system by J. Welles Wilder Jnr. from his book 'New Concepts In Technical Trading Systems'?

Is so - I'd like an opinion on something (maybe even if you're not trading using any of his systems you'll have an opinion or some insight).

At all three brokers where I have accounts I get a 'Sunday' candle or bar. All of Wilder's systems involve calculations based on the daily open, high, low, and close prices. Amongst other things the True Range, Average True Range, and Momentum Factor (particular to this system) is calculated using these prices.

One thing that has been 'bugging me' since testing these systems is this:

The Dow, Nasdaq 100, and S&P 500 Futures Contracts trade 24 hours a day whereas the Main Indices only trade during the NYSE Session.

In other words - you (I) always get a 'Sunday' candle or bar for the Futures Contracts but, of course, it's not a problem with the Main Indices.

I have a feeling that, although these systems work very well, the 'Sunday' candle or bar should EITHER be excluded TOTALLY OR COMBINED with the 'Monday' candle or bar for the Futures Contracts. It's obviously not a problem with the Main Indices BUT could also be a potential problem when trading forex pairs.

The reason I think that it's a potential problem is because with system you're 'basically' calculating the Momentum and the question is: is movement on a 'Sunday' i.e. between 17h00 on Sunday and 06h00 on Monday (New York Time) 'relative' for calculating Momentum of the Dow, Nasdaq 100, and S&P 500 Futures Contracts.

Opinions???

I suppose the question really is (regardless of system I would imagine):

If you were trading a system that should not be incorporating a 'Sunday' candle or bar would you 'combine' the 'Sunday' and 'Monday' candle or bar (so that you really only had a 'Monday' candle or bar) OR just simply discard the 'Sunday' candle or bar altogether.

Regards,

Dale.

any link at this system? ^^

Hi,

Unfortuanately not - at least not on this site (I have the book).

You can try and search for it on Google (it does come up on one or two sites but from what I can see if you don't have the book you'll never be able to make sense of what the sites are telling you).

Regards,

Dale.

For anyone looking for this, it is pages 53 thru 60 of his book. I must admit I have not looked at this for about 8 years. I think I will go re-read it... thanks for bringing it up. be back.

I think it is better to combine them, because you (we) might have some long candle there (the sunday bar) thus the volatility should be considered.

Thanks for the replies,

I was leaning toward combining them as well.

Although - after I've had time to think about this again - I'm not sure that it's a problem or necessary to combine them or discard them if you're trading forex pairs i.e. they're traded 24 hours anyway it's just when you are trading something like the index futures as I mentioned before where I think it's an issue.

I'm glad to see I'm not the only person in the universe who bought this book. It's helped me tremendously in my trading.

I'll tell you the funny thing: I don't know what's wrong with me i.e. I always revert back to the Volatility System, Trend Balance Point System, and Reaction Trend System when my accounts are either wiped out or close to being wiped out!!! Why I don't use them (especially the Trend Balance Point System) consistently, daily, and without fail I do not know!!! I always get sidetracked with other 'nonsense' and then end up in a bad place!!!

To be honest I set up spreadsheets for all forty four forex pairs that are available to me to trade as well as spreadsheets for about eight futures indexes and I think the problem was that by the time I had updated all of these things (some at 00h00 SA time and some at 06h00 SA time) I was getting no sleep so I stopped trading them (the systems). My strategy now is to ONLY use the Trend Balance Point System and ONLY trade the Dow, Nasdaq, and S&P. This has always worked for me (as high as 90% of the time) - no more 'nonsense' for this man!!!

Just by the way I have contacted Wilder's organisation to ask him about this 'Sunday candle' thing and I have not yet had a response (and this will be the second question that I have asked of them in the last couple of months so my patience is running a bit thin with them) but WHEN I do get a response I will post their (his) 'take' on this.

OK - well - I just thought that I should update this thread (been unable to post for a while).

I must give credit where and when credit is due i.e. Mr Wilder's Organisation did in fact come back to me on the 'Sunday Candle' thing and the general consensus seems to be that combining them would be the way to go for the TBP System. This of course only applies to trading forex pairs and index futures (anything traded 24/7) i.e. if you're trading the actual Dow, Nasdaq, or S&P you don't have this problem i.e. you're entering either just before the NYSE close or on the NYSE open the next day.

I have also just discovered one potential 'hazard' with the TBP System i.e. be careful when there are public holidays / closed markets (which oddly enough relates to my initial query anyway). If your broker gives you a candle for the public holiday or a candle when a market has been closed be careful because the Momentum Factor will take that candle into account (thinking that it was just a low / no volume day with no momentum) and will give a false signal / reading. While this may sound obvious believe me it's not - and it cost me dearly last week!!!

While I'm on the subject is there anyone around that is trading the systems in the book??? I've only just finished 'programming' the Trend Balance Point System, Reaction Trend System, and Swing Index System into one of my trading platforms and so far - so excellent - and I have managed to find a 'tweak or two' for the Reaction Trend System and was just wondering if I had anyone else around to share ideas with or are theses systems 'out of vogue'? If they are then it's a shame as these systems are single handedly helping me to 'claw' my way out the huge 'financial trading hole' that I dug for myself last year!!!

Regards,

Dale.

I am currently forward testing the Reaction Trend System (RTS) and have started a journal for it as follow:
http://forexfactory.com/showthread.php?t=72934

Are you still using RTS in your trading? And how is the performance so far?

Regards,

Geoff

Hi Geoff,

Thanks for replying.

I don't use it very often but on the occasions that I have used it it's worked well. I can say the same for the Trend Balance Point System. However: I now use ONLY The Swing Index System and it's working 'fantasmagorically' for me.

If you're interested (and this link is not deleted by the Administrators i.e. not sure if I can post a link to babypips here but I'll soon find out I'll wager) then take a look here:

http://forums.babypips.com/free-fore...es-wilder.html

If the link does not appear or is deleted then email me at [email protected] or PM me and I will give you the link (like I say: if you are interested in 'all things Wilder')!!!

Regards,

Dale.