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

[dpaterso]

Hi,

Nick:

As far as 'lumping' them together is concerned I just base the 'grouping' (FAR better word) on the quoted price e.g. all ???/JPY pairs have the price quoted as 999.99 i.e. two decimals and so on and so forth.

I must just tell you that I've started checking each and every single instrument or pair and changing the QPF (old 'PIPFACTOR') so that it's correlated with the spread and there definitely is some merit in doing this. The spread is directly correlated with the volatility and what you're attempting to do is avoid whipsaws and this may very well be the 'key' to this problem.

By the way: I've had one out of four RT System trades hit its target today so far (and the others are following close behind). That single trade has 'wiped off' one third of yesterdays fiasco!!! (Which of course BEGS the question: RT System??? Another great system???)!!!

Also: I have a BAD 'feeling' about you guys that are now long on Gold (and I know in light of my previous post I should just not be posting this at ALL) BUT I've been waiting the whole day today to see where Oil goes and it's certainly having a hard time getting to and staying above $115 a barrel. I sincerely hope I'm wrong on this for your sakes. Let me STATE that I am NOT basing ANY trading decisions on this 'feeling' though!!!

[dpaterso]

Morning,

This is 'off topic' (well mostly) but I need an answer quick!!!

As you know I've been monitoring the movement of Oil for the past several days and as of RIGHT NOW none of 'the old mans' systems are giving me a signal to short Oil i.e. the SI System is J-U-S-T- short of giving a signal.

Now (and I never thought I'd see the day when I posted a post relating to candlestick charting techniques but): on the daily chart we have (what I interpret to be anyway) a 'hanging man' the day before yesterday and a 'star' and this pattern is supposed to be a 'warning' of a trend reversal or is at very least supposed to be telling us that there is a sort of 'stalemate' between the bulls and the bears!!! (YES I've been reading again)!!!

Can anyone who has even an elementary knowledge of candlestick charting techniques verify this for me???

UNFORTUANATELY it is as times like this (OK I MAY be speaking prematurely here of course but nevertheless) when you do realise that sometimes 'systems' CAN get you into a trade very late. In other words: BECAUSE there is no signal on the SI System to short Oil I now have to wait until midnight tonight to see if I do INDEED get a signal to short Oil. Now knowing Oil (from watching it): if and when it corrects it happens in 'spectacular' fashion and if it corrects today in 'spectacular' fashion then yes I WILL get a signal to short Oil from the SI System tonight (well on Sunday night anyway) but of course by then you've missed the entire movement today if it happens.

Of course I COULD ALSO use LBOP from the RT System which, if hit, signifies an immediate trend mode trade (remember that if HBOP or LBOP are hit on ANY day it signifies a trend mode trade). In this case though LBOP is a lot further away than the low of yesterdays candlestick ('star'). That's another thought.

[randont]

Dale,
You've been doing so good don't screw it up now by doing everything you've told us was the cause for your fiasco of last year. I'd wait for your system to tell you when to get in. If you want to do candlestick trading then develope a system for it and use that. Above all I don't think your system or money management are anything but superb and something to stick with. Word of caution about money management based on % of margin. Make sure you always know what you're going to lose if you get stopped out and if the thought of losing that much is unbearable/painful then drop your lot size till its not.

Cheers,
Randon

[Sweet Pip]

Originally Posted by dpaterso

Morning,

This is 'off topic' (well mostly) but I need an answer quick!!!

Now (and I never thought I'd see the day when I posted a post relating to candlestick charting techniques but): on the daily chart we have (what I interpret to be anyway) a 'hanging man' the day before yesterday and a 'star' and this pattern is supposed to be a 'warning' of a trend reversal or is at very least supposed to be telling us that there is a sort of 'stalemate' between the bulls and the bears!!! (YES I've been reading again)!!!

Can anyone who has even an elementary knowledge of candlestick charting techniques verify this for me???

Hi Dale,
You really put a lot of hard work into all this in spite of past woes, and I'm sure besides myself we are all rooting for you...but do I detect a hint of desperation in this post when you're looking away from your system to, of all things as you say...CANDLESTICKS...to verify your system ???

Not meaning that there's anything wrong with candlesticks as I'm presently giving them a go...I just mean you're straying...again

So I hope you're not offended if I offer a link to an e-book, perhaps another of many you've probably already read before, but it helps to keep the principles up front and center.

http://forums.babypips.com/attachmen...ee-trading.pdf

The subject came up in our thread on 10K to 1Mil in 1Yr where we're debating whether this is realistic. Theoretically it should be, but there are certain behaviours and beliefs that prevent us from accomplishing it.

So since you're into reading lately, thought this might be of some help instead of reading up on Candlesticks too much just yet.

Best regards

[dpaterso]

Good (Morning) Everyone!!!

Well FIRST of all thank you being my 'conscience' ('randont' and 'sweet pip')!!! It's what I need to hear sometimes!!! But no: I was not deviating from the system or starting to 'wander' as it were (not this time anyway) or 'desperate' at all. It's just that I had been monitoring Oil with the SI System, the Volatility System, and the Reaction Trend System and the SI System was 'just shy' of giving a (short) entry signal and I did not want to miss any correction because, as I said before, instruments like Gold and Oil correct in 'spectacular' fashion when they do. Anyway: I weighed up the pro's and con's of placing a short order with a stop loss as per the Reaction System i.e. it was well worth the risk and it paid off (not 'handsomley' but it paid off nevertheless).

Anyway: in SPITE of last week I managed to close out everything at EXACTLY 50% gain on the month so I'm happy with that. (As a matter of fact I closed out eveything the INSTANT that I hit the 50% MAINLY so that I could start the rest of the month with my 'revised' money management i.e. smaller lot sizes with more instruments - see below).

And seeing that I've mentioned last week above I feel that I need to expand on the post where I detailed my 'shortcomings'. Turns out that I was INDEED right about at least two of the entries that I closed out early i.e. they would have been stopped and reversed AGAIN at a loss had I not closed them out early at small profits!!! Now this does NOT 'absolve' me from what I did that day just because as 'luck' would have it I did the right thing. No sir. What it has reaffirmed for me though is this: this IS a 'pshycological game' no question and, if you have to reduce your lot sizes, and then trade more lots (instruments), the end result (gains) will the same BUT when you have to realise losses then you are 'enabling' yourself to do so 'phsychologically'. Make sense?

Anyway: let's see how the rest of the month goes. If I'm able to repeat the past two and a half weeks performance then I'll be happy (and so will my clients I would imagine)!!! At least I will be SURE that the gain is based on REAL trades as opposed to taking the odd 'high risk' trade like I did last month and the month before to nett HUGE gains (like the 280%)!!! I cannot afford to take 'chances' like that anymore!!!

And once again: thank you BOTH for the kind words, the 'brutal directness', and bascially for caring!!! Much appreciated and you have my FULL PERMISSION (not that you need it but anyway) to CONTINUE to 'keep me in line' if you see me 'straying from the straight and narrow'!!!

[dpaterso]

By the way:

Turns out I was just plain 'lucky' to make a little bit on Oil on Friday!!!

I had not looked at what happened to Oil on Friday afternoon because I was out earlier in the day and had not seen where it closed when I posted my last message today!!! Seems like the SI System was RIGHT to not be giving me a signal!!!

[dpaterso]

Good (Monday) Morning Everyone!!!

Hope a FINE (+30%???) week is had by all!!!

I have my first Volatility System trade open (well first ever on the daily timeframe anyway) i.e. long AUD/CHF. Can't wait to follow it through and see the results!!!

Other than that: no other valid SI System entries for now.

I've again spent some more time looking at the DMI System. Don't just 'discount' that system because it APPEARS to be 'nothing new' to you i.e. it appears to just be 'plain 'ol ADX'!!! That's a mistake that I've made. Backtest some part trades and see what you see!!! Used CORRECTLY it's another 'winner'!!!

Just one thing: there appears to be a problem with Delta's platform since yesterday. They introduced 'fractional pip pricing' over the weekend (upgrade) and from what I can see this has caused some or the other problem with the forex quote screen. I have already contacted them about this and am awaiting their response which I will post here.

[Bocajunior]

Morning Dale, morning everyone.

Lets hope for a good week ahead.

That's me read the book cover to cover now, and I have also gone back and re-read a few of the chapters. I agree with you about the ADX, it certainly does have merit. In fact, I did a google the other day and there was a very interesting article on incrediblecharts.com about how another respected fellow is using this indicator. I think you have posted that link on teh PSAR thread. I'll post it here if i get the chance.

I see a Volatility System entry on CAD/JPY for those interested. I was trying to upload the chart here but for some reason, it's not working.

Hope to be around on YM later on for a chat.

Keep it real folks
Boca

[dpaterso]

Heeey Boca,

Good week to you too!!!

I never saw any VS trade on CAD/JPY but then I looked again now. I assume you're looking for a long entry i.e. I've been 'tracking' for a short entry so that's probably why.

[dpaterso]

Just a note:

I know I've been 'banging on' about money mangement rules lately but let me tell you that I cannot stress the importance of sound money management too much.

As of right now I have two open positions and another eight pending orders (based on the Swing Index System, the Reaction Trend System, or the Volatility System) and using my 'watered down' version of Wilder's money management there is a certain 'calm' today i.e. I know that no matter what happens if ALL of my pending orders get executed I don't have to stress at all i.e. nowhere CLOSE to having to worry about free margin AND if I DO happen to have to stop and reverse at a loss I know I'll be able to 'accept the loss with pride' and not be hesistant to place the stop and reverse order.

Sound money management. It DOES make a difference to your 'trading life' to USE IT!!!