Trading Systems in 'New Concepts In Technical Trading Systems' by J. Welles Wilder

[Bocajunior]

Lets take a look at Gold here (XAU/USD)

CSI = ADXR x ATR(14) x K
= 23.47 x 2241 x 0.0044815 (K factor for Gold)
= 253.6

The ATR for gold is actualy 22.41 dollars which is 2241 cents. Use this in the equation to help us get the CSI. So for Gold, the ATR has to be multiplied by 100. That's the way I see it...

On to Silver...

[dpaterso]

Ok. Well. I promised you all that I'd not ONLY tell you about the good but also about the bad too (although I'm not quite sure WHAT this post 'falls' under)!!!

Anyway: I've just closed out ALL my positions for a 10.33% gain on capital since Sunday night.

Yes: I'm a bit 'peeved' with myself for doing this BUT I at least have my reasons:

1 - I only started using ADXR to 'pick' instruments from late Monday / Tuesday this week. Because of this I landed up with a short trade on EUR/JPY on Sunday / early Monday and had I been using ADXR to 'pick' instruments I would NEVER have had this position open and all it was doing was weighing on the other profitable positions. Lesson learned. ADXR works well to 'filter' the instruments (and I would imagine that once we've all put this CSI thing 'to rest' this will be an even better 'filter').

2 - I 'bailed' on my four hour Gold Volatility System trade earlier today and could have KICKED myself for doing this. I was looking at Oil and was almost certain that Oil would 'tank' today but I could not have been more wrong if I tried (the theory being that Gold would have 'tanked' with Oil). I justified my 'bailout' because I saw (at least I THOUGHT I SAW) a signal from the Swing Index System to go short Gold so I figured: 'Why wait for the price to drop below the Volatility System's SAR and just waste pips i.e. stop and reverse now as per the Swing Index System'!!! Wrong on BOTH counts!!! The Swing Index System's signal to go short Gold was valid only for YESTERDAY not today AND the four hour Gold Volatility System trade would have kept me in the 'right' way right up until now as I'm typing this message. The point of this: if you open a position based on one of the systems LEAVE IT ALONE i.e. don't try to 'mix' them. Lesson learned.

While I know (or don't THINK) I should be 'beating myself up' over closing these positions early at a small profit i.e. 10% per week ain't bad is it??? (that's more than 40% per month when compounded weekly???) it means that I broke my rule of following the systems through 'till the bitter or profitable end' 'no matter what'. Dissapointed in myself??? Yes I am!!! Did I make the right decision??? Yes I think so!!! Will I be MIGHTY 'pis*ed' if Gold closes at $800 an ounce tonight and oil 'tanks' to $75 a barrell??? HELL YES!!!

[teknoesen]

Glad to see there are actually other people working and trading. I am sure i will be able to pull it off.

My book should be here around the 18th of April and my account should be set up soon. I still need to send all the documentation off.

cant wait to get that book so i can speaking the language; all seems so foreign at the moment!!

Take Care

Eddie

[randont]

I’ve been thinking about how much I’ll make before I close out my positions and I came up with this. This is assuming you are making your trades as a percentage of your capitol. It could be summed up better but you get the point.
% gain on Initial Capitol
1st week
10%
20%
30%
40%
50%
% gain on the following week
2nd week
10%=11% due to the previous weeks gain
20%=24% “ “
30%=39%” “
40%=56%” “
50%=75%” “
3rd week 4th week
10%=12% 10%=13%

Just imagen compounding that over 3 years on 10k. That would be the equivalent of a 401k plan over 30 years, roughly.

[Bocajunior]

Originally Posted by randont

I’ve been thinking about how much I’ll make before I close out my positions and I came up with this. This is assuming you are making your trades as a percentage of your capitol. It could be summed up better but you get the point.
% gain on Initial Capitol
1st week
10%
20%
30%
40%
50%
% gain on the following week
2nd week
10%=11% due to the previous weeks gain
20%=24% “ “
30%=39%” “
40%=56%” “
50%=75%” “
3rd week 4th week
10%=12% 10%=13%

Just imagen compounding that over 3 years on 10k. That would be the equivalent of a 401k plan over 30 years, roughly.

Hello Randont,

I love your optimisim, I really do, but I personally dont like to think in these ways. Remember, anything that can make money so quickly, such as high leverage etc, can also work the other way and take it away from you.

Concentrate on your skills. Reading J Carters book the other night he was saying that as soon as traders started thinking in terms " I need to make this amount of money so I can buy that..", well, they were pretty much fck..d from that point on.

Regards
Boca

[dpaterso]

Good (early) Morning Everyone (it's 05h52 here)!!!

Hey Boca:

TOLD YOU!!! It's a good book??? It's THOSE types of things I was talking about as being the 'value' in the book!!!

OK: for what it's worth I have now done LOADS of work here tonight and I've come to the conlusion that if you DON'T want to use the CSI calculation but only want to use the ADXR value instead then DO USE ADXR(7) and NOT the default of 14. I noticed last night / this morning that after going through a VERY long list of instruments on which I have VALID SI System entry signals I started to notice that there were some instruments where I KNOW I should be looking at positions on and others where I KNOW I'd be wasting my time. The problem is that with ADXR(14) all the instruments where I felt I SHOULD be looking at positions on did not 'feature' so I compared ADXR(14) to ADXR(7) and spotted the differences immediately. It would appear that in todays (forex???) market ADX(14) and ADXR(14) react too slowly (I've heard and read this before somewhere else by the way). It would appear that using ADXR(7) is 'the way to go'!!! Already tonight three orders have been 'hit' and they're ALL green right now!!! (So I DON'T feel so bad about closing my positions yesterday anymore BUT still feel I let myself down BUT followed some of those trades through and it would appear that I didn't 'miss' anything either)!!!

[dpaterso]

Hello again,

I wanted to include this in my above message but while I was 'finishing it off' this morning we had ANOTHER power failure here!!! (We're becoming the 'laughing stock' here let me tell you)!!!

Anway: seeing that I've nothing better to do than add posts here using my notebook:

As far as 'profit targets' are concerned:

I DO agree to NOT watch your account balance (well at least not to see how much you're making but DO monitor your margin percentage levels of course) BUT my problem is two fold:

1 - Since I've been using these systems I've grown 'accustomed' to +100% gains so when I 'clear out' with 10.33% I feel 'let down'.

2 - I now have 'clients' to worry about and a '10% guarantee' SO this puts the pressure on. Having said that: here's the 'gazillion dollar' question: do you (I) continue to trade 'clients' money after I've made the 'guaranteed 10%' for the month (which CAN be accomplished in a day or two most times) OR do I CONTINUE to trade to maximise theirs (and my) profits (remember I'm taking 50% of the profits made over and above the '10% guarantee')??? It's a question that I never thought would worry me or would have to ask but 'what would YOU do' (anyone)??? I mean to say as things stood yesterday I could 'shut up shop' as far as the clients are concerned and only trade their accounts at the begiining of next month again. See my point???

And by the way: as I type it SURE looks like ADXR(7) is 'the cut of my jib' (Boca will understand that phrase)!!! Put it this way: I'm already 'up' past my 'loathesome' 10.33% from yesterday!!!

Anyway: all just 'food for thought (and HOPEFULLY we'll have utility power restored in the next couple of minutes SO THAT I CAN HAVE SOME HOT COFFEE)!!! (I hope all you World Cup Soccer fans don't mind watching the final by candlelight)!!!

[dpaterso]

By the way Nick:

I've been meaning to ask you:

Is your Gold VS trade still open (daily, short)??? By my calculations it should be. Just wondering.

[Bocajunior]

Kin el! Dale, If you're saying you can take 10% plus a month without too much trouble, that's pretty impressive in my book!

What's with all the power outages in South Africa anyway? What's going on?

I'll take a look at ADXR(7) and see what I think. I still couldn't figure out how I was getting such a difference between ADX levels between different brokers though.

And one more thing, I was on Delta a few hours back but seems I got lost again. I really want to like it but it seems we are just not a good match.. I'll keep plugging away though.

more later.

[dpaterso]

Hello.

Well that's my point. 10% per month (with the Swing Index System is 'a walk in the park no bullsh*t). But it MY case remember that the client gets the WHOLE 10% i.e. in order for me to make commission I have to make more than that for it to be worthwhile for me (otherwise I may as well just trade my own account). Anyway: it's 'symantics' I suppose.

SA Power!!! Our 'new' goverment in its 'infinite wisdom' decided to ignore the 'experts' a couple of years ago when they were told that they had to spend some money on upgrading the infrastructure and they chose to ignore this advice and pay themselves some 'fat' bonuses instead!!! Now we're sitting with the 'sh*t' i.e. South Africa is just 'growing' in 'leaps and bounds' and NOBODY figured that they'd need the power supply to keep up with the growth!!! Well fuc*king done chaps!!! So now they have to 'load shed' i.e. sort of 'share' power countrywide at certain time every week so as to not overload the 'grid' (and THIS done by the way when they're EXPORTING power to our neighbouring countries at a discounted rate)!!! I mean we have a 'power report' on one of our radio stations here every morning. A POWER REPORT!!!! WHERE ON EARTH have you EVER heard of that (well OK maybe in Malawi or Kenya) but CERTAINLY does NOT belong on the radio here!!!!!!

Well back to business (now that I've got my 'bit*h session' out of the way):

I've attached a .PDF file for you to look at. Basically it's pairs where I got either entry signals or stop and reverse signals on from the Swing Index System. The pairs are sorted by ADRX(7). I placed orders for the top 6 majors (the ones in 'grey') and as of RIGHT NOW most of those orders have been executed and the % gain on the capital from yesterday is 26.35%!!! Compare the charts for the pairs with the highest ADXR(7) and then the pairs with the highest ADXR(14) and you'll see what I mean (reading taken as of yesterday when the SI System signals were generated). From what I can see ADXR(14) is too slow to react to our markets today BUT ADXR(7) seems to be a totally 'different story'.

As far as Delta is concerned: THAT IS WHY I HAVE YM 'my mate'!!! All ya need to do is call!!!

Edit:

Tell you what: at the end of the month I will email a trading statement as printed directly from one of my clients accounts for those who may be interested (talk about 'putting your ba*ls on the line'). I'm NOT going to post it here as I don't think it's for 'public consumption'. Also: ONLY to babypips members and THEN only to those I sort of 'know'. The reason I'm telling you this is because these gains DO appear 'too good to be true' (and that IS the feeling that I got in the beginning) but they're in front of me ALL DAY EVERY DAY and it's been happening just TOO consistently now for it to be 'luck' (I sincerely HOPE SO anyway)!!! (I have to check that this is alright with my business partner and my guarantors by the way).