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Line in the Sand

  • #21
  • Jul 20, 2012 6:18pm Jul 20, 2012 6:18pm
How do you quantify this?

Can you show an example?

Also another way of trading this... strong and weakest pairs and therefore not to both trading anything in the middle... as we are looking for breakouts/trends.

Quoting juicyt
I guess for this trading style you might add a strength meter to the chart and only trade the S/R break if strength has built up to something exceptable to trade. This will depend on your meter.It won't be perfect but if it helps only a little, it could make all the difference.

Also, some brokers offer low spreads these days which will help a lot for the small stop. I don't want to talk about Brokers really but Axis gives me an average of 0.6 on majors which is great for tight trading. (which i do)

jt
  • #22
  • Jul 20, 2012 6:25pm Jul 20, 2012 6:25pm
Look at this trade today, circled.... tight SL... home run... when it closed below this yellow line... it did not come back... though i closed a little too early... as usual!

The only reason I closed out... we are coming to Weekly/Monthly lows.

This is only demo btw... I am fine tuning my technique before going live.
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  • #23
  • Jul 23, 2012 9:58am Jul 23, 2012 9:58am
Ahh I see no fancy indicators, no colours, no colourful charts = no interest.

Though I thought I'd update today... here's the latest trade, I am at BE... with 3 trades, you can see where they have been triggered - yellow line area towards the bottom... lets see how we go.
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  • #24
  • Jul 25, 2012 9:36am Jul 25, 2012 9:36am
Ok... so these were closed out at BE.

But now I have a new trade open which is at BE and 70+ pips in profit... lets see how this goes.

Quoting guess121
Ahh I see no fancy indicators, no colours, no colourful charts = no interest.

Though I thought I'd update today... here's the latest trade, I am at BE... with 3 trades, you can see where they have been triggered - yellow line area towards the bottom... lets see how we go.
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  • #25
  • Jul 26, 2012 10:00am Jul 26, 2012 10:00am
Ok... so I closed out (blue area)... at around 150 pips on this one and I have open another trade... short... lets see how this goes

Quoting guess121
Ok... so these were closed out at BE.

But now I have a new trade open which is at BE and 70+ pips in profit... lets see how this goes.
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  • #26
  • Jul 26, 2012 10:35am Jul 26, 2012 10:35am
This is a better view...




Quoting guess121
Ok... so I closed out (blue area)... at around 150 pips on this one and I have open another trade... short... lets see how this goes
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  • #27
  • Jul 26, 2012 11:14am Jul 26, 2012 11:14am
first thought i have is that to trade in a day/week that has significant momentum.

and a trader doesn't need to enter early in that day/week. if only that day/week is significantly more volatile than previous ones, that will probably be okay to consider entries.

Quoting o990l6mh
Obviously it's not as easy as I made it seem here, not at all. This was just to demonstrate why LITS can be a powerful tool. The risk lies in getting frequent stopouts that slowly bleed you even though every loss is small. Find a way to handle that is the key to making LITS work for you.
  • #28
  • Jul 29, 2012 11:59pm Jul 29, 2012 11:59pm
To find the key level for entries is the key

Pivot of day/week/month seem not quite ideal

but if yesterday is a higher/lower day than 'the day before yesterday', then the Hi/Lo might be a good level to trade TODAY, if reached.

just observation, not sure yet.
  • #29
  • Jul 30, 2012 12:48pm Jul 30, 2012 12:48pm
Hi guess 121

I am Nik and i live in Belgium, like you i am reading and learning already for a long time on FF. I have also read the thread of Greame and am already for more then a year in search for my " one thing"

I like the line in the sand entry technique, and i would like to forward test with it.
Maybe it's a good way to build multiple positions with limited risk and ride the trend.

I saw that you wrote some kind of EA to put the orders in , i downloaded it but it doesn't work.
Are you using a newer version at the moment?

Are you still testing with the line in the sand entry technique?
  • #30
  • Jul 31, 2012 4:42pm Jul 31, 2012 4:42pm
Hi Nik,

The EA is not this machine... it's on machine that I do not have access to at the moment... and in development (I am not a great programmer, just something I made myself and still not quite working as I want it).

Pull up a graph and zoom out and place and line... and lets see what happens... people want to be in the market all the time and trade as much as they can, I will let the market chase me instead of chasing the market.

Lets leave this line here and lets seem how things develop over time and I will come back to this.

At present I am long at the moment (on the machine I do not have access to), I am BE pips and lets see how things go - I will update the trade later on tomorrow if I get a chance... though to get into that long trade... I have had little losses along the way.... so lets see how things develop.

The key thing is trying to catch good areas to trade the trend... this part I am working on... but lets see how this goes...

Regards,
Vip

Quoting Sitting duck
Hi guess 121

I am Nik and i live in Belgium, like you i am reading and learning already for a long time on FF. I have also read the thread of Greame and am already for more then a year in search for my " one thing"

I like the line in the sand entry technique, and i would like to forward test with it.
Maybe it's a good way to build multiple positions with limited risk and ride the trend.

I saw that you wrote some kind of EA to put the orders in , i downloaded it but it doesn't work.
Are you using a newer version at the moment?

Are...
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  • #31
  • Aug 1, 2012 4:58am Aug 1, 2012 4:58am
As promised... here is my chart of buys... lets see how this plays out.
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  • #32
  • Aug 1, 2012 5:37am Aug 1, 2012 5:37am
Hi guess21,

So at the moment you are manually watching the line and placing pending orders manually when the stoploss gets hit?

I don't like the idea of watching the line for 12 hours all day , and then when i am sleeping price will take my stoploss out again one more time and take off without me
This way all the small losses where for nothing.

Another option would be to choose a good place to put the line, watch it manually,put it on be when the price runs away and forget about it, if price takes it out again there was no momentum and we where not interested in it anyway.
If price takes immediately the stoploss out a few times, then just take your few small losses and leave the line for what it is.

Have you thought already about the different approaches? which one are you using?
Are you aiming to build positions the millipede style or do you want to take short term profits?

Grtzz,
Nik.
  • #33
  • Aug 1, 2012 7:40am Aug 1, 2012 7:40am
Quoting guess121
As promised... here is my chart of buys... lets see how this plays out.
I'm a bit confused. How are those buys related to the yellow line? They are related, are they?
  • #34
  • Aug 1, 2012 7:54am Aug 1, 2012 7:54am
Ignore the yellow lines... the chart is a little cluttered at the moment.

Quoting Barbossa
I'm a bit confused. How are those buys related to the yellow line? They are related, are they?
  • #35
  • Aug 2, 2012 4:26am Aug 2, 2012 4:26am
Quoting guess121
Ahh I see no fancy indicators, no colours, no colourful charts = no interest.

Though I thought I'd update today... here's the latest trade, I am at BE... with 3 trades, you can see where they have been triggered - yellow line area towards the bottom... lets see how we go.
I'm glad you have revived this thread. I have played with the technique as outlined by the thread starter but I still have not reconciled the statement "always reverse, logging how much this is costing you" with the payoff "take profit at twice the cost".

Essentially it is a Martingale construct and I have seen market swings such as expanding triangles where you might expect to pay a huge premium or even blow an account.

And in his second post Spectre's mathematics are way off. How can 33 reversals be 99 pips loss just because the spread is 3 pips? In reality, I think you would be lucky to manage 5 before you clock up 1% based on those figures.

Having said all that, it is one of the better threads here and all the better for helping us think about how we manage risk.
Gone to a better place
  • #36
  • Aug 2, 2012 5:53am Aug 2, 2012 5:53am
Yes there is that issue... I don't martingale... I think I will blow my (demo) account and I don't want to be doing this...



ok there is a little method to my madness and I am looking to optimize how I trade this madness (it's not really madness) - I have tweaked my system and now I am happy with it.

I have attached my balance chart here and only from around trade 183 is when I have sort of got it right... so you can ignore the bit before and I am risking 1.5% of my trade and my SL and order size is always changing and once I have a buy order... I will look at buying and not selling and vice and versa.

I have added my current trade here and I am looking to buy (I did close out a buy yesterday and in hindsight I should not have, I would have 2 buy orders in place now... so lets see how things pan out).

Quoting smikester
I'm glad you have revived this thread. I have played with the technique as outlined by the thread starter but I still have not reconciled the statement "always reverse, logging how much this is costing you" with the payoff "take profit at twice the cost".

Essentially it is a Martingale construct and I have seen market swings such as expanding triangles where you might expect to pay a huge premium or even blow an account.

And in his second post Spectre's mathematics are way off. How can 33 reversals be 99 pips loss just because the spread...
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  • #37
  • Aug 2, 2012 7:09am Aug 2, 2012 7:09am
Ok this was a bit of an home run, so I closed this out, this is the above trade... took 2 trades - just a little zoomed out.
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  • #38
  • Sep 8, 2012 11:23pm Sep 8, 2012 11:23pm


A bigger edge:

-Pick news reports or events to trade on specific times and dates.
-Avoid high probability of consolidation times and dates.
-If you try to trade it every day and backtest it, the reversal costs will mount quicker.
-You need to pick the dates and times based on your discretion and experience.

Institutions can position size aggressively. 1 2 4 8 16 32 64 units...

Small players can position size at most 1 2 3 4 5 6 units...

Position sizing aggressively lets you get out quicker with profit target + reversal costs. But can also increase reversal costs quicker.

Again the edge is knowing when to apply the system.
Price is the only indicator.
  • #39
  • Nov 22, 2015 2:45pm Nov 22, 2015 2:45pm
You need to look at statistical outliers in terms of most technical analysis parameters.

How:

1) trendlines
2) support/resistance
3) moving averages

- you need to trade a derivative that is highly liquid and with a broker that won't cheat you out of your money when you make it. E mini SP 500 is what most people trade. And market making is not within the brokerage itself as most Fx bucket shops are.

- you need a computer algo that has everything programmed into it and best situation is low latency and co location near exchange would be ideal.

- you need infrastructure with redundancy and human monitoring to make sure it's online and executing properly.

- large enough bank account where the money isn't needed and won't effect your behavior. ie interfering with algo. Basically you need to be unemotional or zen about it.

When:

- most 'edges' in trading are human nature based but recently with the advent of computer algos, the price action is changing. Meaning the weather is less predictable.

- most markets are government driven and you need to figure what the agenda is. Most banks are proxies of government mandates. So the trendlines for most major indexes are controlled by monetary policies in collusion with banks.

- institute algo when price is volatile, and it's usually during market events or news events. The order flow will be unidirectional meaning either sell side or buy side. When price is unidirectional your algo will have the least amount of transactional costs. Meaning the price moves away from your 'line'.

- let your trade achieve a significant profit before exiting it. Ie leave your algo alone for the rest of the day if everything is playing out as it should.

- institute algo on very rare moments when their is a major news event. This will reduce churn or transactional costs.


Sincerely,
Chris
Price is the only indicator.
  • #40
  • Nov 22, 2015 3:23pm Nov 22, 2015 3:23pm
your range between your high low for the day is too wide, thats why your having huge drawdowns, if price keeps hitting the high and hitting the low intraday, you will end up churning your account and accruing huge costs for the reversals. Just pick a price and reverse when it goes up and below. But you can't institute this everyday, you need to only trade when conditions are right. The price you pick should be a monthly high or low instead of daily high low. If the trend line is up statistically you should pick the monthly low since the stats are saying price will eventually adhere to the trend line. If the trendline is down than you need to pick the monthly high. So you need to wait till the market approaches these outliers before instituting algo.
Price is the only indicator.
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