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

[balaji3003]

Hi,

I have been following your threads almost everyday for the past few months & just got a copy of "THE BOOK". The book looks out dated, but the content is just amazing!...everything makes sense somehow or other....i just backtested one of the systems in the charts and it seems to work great.

Just one question. Since "THE BOOK" has trading system that are completely technical, it is possible to completely automate the trading. ...right?

Have you developed programs to fully automate trading strategies in the book?

Just wondering because you mentioned something about coding...

Thanks,
Balaji

[dpaterso]

Hi,

Thanks for responding.

'The book' DOES look 'dated' doesn't it??? But it's really only because of the charts and stuff (can you IMAGINE having to plot your charts 'by hand' everyday)!!! I think that this is ONE of the reasons that when I first got it I sort of 'discounted' it's merits and 'man oh man' am I sorry that I did that!!! The systems are EVERY BIT as valid TODAY as they were back then I assure you and anyone else reading this thread!!! As a matter of fact: the 'sad part' is that I'll 'bet' that if Wilder took the same systems, threw in a couple of Excel worksheets, a few computerised charts, and some 'glossy paper' he'd sell ANOTHER 'gazillion' more copies i.e. 'New Concepts In Technical Trading Systems - Second Edition. HERE'S a thought: he could EVEN 'bundle' my 'sysdicators' with the book (now THERE is an EXCELLENT new word to describe my 'system indicators' don't you think???)!!!

As far as 'coding' is concerned: I have turned each of the systems into an 'indicator' as it were e.g. the 'coded' RT System automatically / dynamically draws lines at HBOP, S1, B1, and LBOP on the chart every day (period); the 'coded' TBP System automatically / dynamically draws lines for the TBP, TP, and SL (and computes the MF) every day; the 'coded' VS automatically / dynamically draws the VS SAR on the chart every day. In other words I've 'reduced' the 'systems' to 'indicators'. That type of thing. (OK: Parabolic SAR I obviously did not have to do TOO much work for because that is / was ALREADY a 'standard' indicator and is on most platforms). But like I said: all of this was done to make my life easier and enables me to trade more instruments and set up more trades than I would be able to handle using Excel or something like that purely due to time constraints (it would take an AGE to update spreadsheets for forty four pairs as well as commodities as well as equities each night as I'm sure you could imagine i.e. I'd never get ANY sleep). Again as I said before though: HOW anyone sets the systems up and trades them is irrelevant really. It just really 'pains' me to see 'new kids on the block' looking for 'free systems' and an 'easy ride' but then I suppose there is that saying: 'you can take a horse to the water but you can't make him drink'!!!

As far as 'automation' is concerned: you are quite correct AND what's more I believe they would be EVEN MORE profitable if 'automated' i.e. sometimes I STILL find myself 'pulling trades' early because they're showing such a HUGE profit and the irony is that MOST times they continue on to make EVEN BETTER profits (as a matter of fact yesterday I 'pulled' one of my VS trades early because the profit / margin cost ratio was just 'too much' to handle. Needless to say the pair is STILL in a strong uptrend. I'm not 'over sorry' about it because it WAS a very profitable trade but of course NOW you have to wait AGES for a VS stop and reverse on that pair to 'get in' again. On the other hand if you're following some or all of the systems daily then believe me you're NEVER short of new trades, signals, or entries)!!! Anyway: 'automating' the systems is something that I will 'get down to' one of these fine days though I promise you.

I'm glad you've bought 'the book' and I sincerely hope that the systems work as well for you as they are working for me and if I can help in anyway then please feel free to ask.

[randont]

Good morning!

I know I've been pretty quiet lately. I've been dinking around with excel. I know almost nothing about it and how to use it so its all new. Anyway I was able to set up RT spreadsheets for the majors last thursday, imported data from Deltastock pretty cool feature. I want to detail what I did so in case I made a mistake or could have done it a better way maybe you'll be able to see that from what I've written.

I made $ 13 of GBP/USD using 1 lot or $10 margin, it hit the S1. And since it was in the green I closed out with a decent profit(I think I made a mistake here). My other trades of the majors are in the red(1 lot in each) $1, $7, and $5, but as far as I understand I should hold onto these till they hit the LBOP/HBOP(I set limit trades for 2 lots at each of these points, so one lot would cancell the B/S and the other would be in for the reverse) or go green and hit S1/B1. For the majors I came up with the BOS as follows for friday the 2nd:EUR/USD=B, USD/JPY=S, GBP/USD=S, USD/CHF=S. I placed stop orders at the S1 and B1 of each of them thursday and on friday when I came home from work they had all hit their S1/B1 targets with the above results.

I have every intention of starting an account at Deltastock. I just don't want to start one without having a solid base in the systems so I don't waste your time or mine. I plan on setting up another a couple more systems today and tomorrow to trade them this week.

As far as why this thread isn't as popular. Well, it takes work to learn and trade these systems. With parabolic sar only its pretty easy. Only takes about 5 minutes to learn/get set up on a chart and make your trade. Also those that are reading maybe they're still in the trying to understand/grasp the concepts stage? Then after that you have to set up the excel spreadsheets, this part sucked at first cause I didn't know how to import the daily data so was typing the Open High Low and Close all by hand. That took foreeeeever. I guess you could sum it up by saying most just want the easy quit way to riches. Which imo is why most traders never make it. 90%+ of traders out there would have quit after your fiasco of last year. There's a story in the book "Think And Grow Rich" by Napoleon Hill about a guy that strikes gold in the california gold rush. He got so exited he bought a bunch of equipment with the small vein of gold and continued digging. After that the vein disappeared and he worked and worked but didnt find anything, he gave up and sold his equipment. The guy that bought it found the continuation of the vein 3 feet farther, it was HUGE and he got filthy rich off of it. The first guy went back to his home in the east. He learned from his mistake and didn't give up on his next business venture and eventually became very wealthy himself.

Another thing for those that aren't living in the US. Our prices are skyrocketing here and is causing alot of concern. Our "popular vote/mainstream media" presidential candidates are making no mention at all of lowering taxes, getting us out of war, or intervening with the foreign reserve system(the fed) all of which are absolutely killing our economy. On top of it all president bush has passed laws that take away habeas corpus and in an emergency allow him to employ military forces inside the US. So... we've got alot on our minds here. At least more americans are realising whats going on. All of the above has taken some of my time these past few months. I'm a big gun rights advocate and I've been getting involved in that too. Check out this vid on youtube YouTube - GUN CONTROL WORKS . Another thing all our presidential candidates are aiming to take away, with the exception of Ron Paul.

Off topic. I just got a CZ 40P. Look it up, it's sweet! I plan to conceal carry this. After all these "gun free zone" killings I'd rather rely on myself for my safety. "it's better to be judged by 12 than carried by 6" don't know who said it but I've always liked this quote.

Cheers,
Randon

[Bocajunior]

Dale,

ok, first things first. I've had a a few shandys tonight so my reply might not be worth much at this moment. But never mind, allow me to waffle on.....I think the the thread is a success IMHO.

Ok, we dont have 220+ pages like the PSAR thread but people are following it. The reason there are not more is that folks will have to fork out for the book and probably on a site like this, I can imagine that people just want to find the ever elusive "holy grail" for free... It'll never happen,, but people keep on searching.

But these numbers are not our concern are they? I mean, as long as you/ we are posting the kind of figures you mentioned in previous posts,, you got to be happy, haven't you?!

hapy days ahead me thinks

[dpaterso]

WOW!!!

Thanks for the replies!!!

OK: don't get me wrong here i.e. it's not QUANTITY I was expecting (222 pages and if the truth be told probably 111 of them are just filled with my 'inane drivel' and late night 'antics')!!! Like I said: it just 'pains me' to see some of the other stuff posted here and some of the attitudes that are evidenced and you just know that they're going to land up where I did (finances and stupidity willing of course)!!! And when someone starts a new 'please help' thread and you respond by pointing them to this thread you get 'accused' of 'advertising' or as someone else so eloquently put it 'peddling'!!! Anyway: maybe all of this is in itself just part of the learning curve!!!

Randon:

Thanks for 'sharing' all of that. I've not looked at the 'BOS' sequence for those pairs so I'm assuming you're 'on the mark' there. Just one thing I noticed though: you DO NOT 'hold on' to RT System trades UNTIL they hit either HBOP or LBOP (if I read what you're saying correctly then it appears that is the way you are understanding it) i.e. 'buys' are exited NO MATTER WHAT on certain days and 'sells' are exited NO MATTER WHAT on certain days as well. HBOPS and LBOPS are ALWAYS TAKEN no matter WHAT day it is. (I don't have the book in front of me right now but it's detailed there. If you come 'unstuck' let me know and we can go through it together tomorrow).

And by the way: 'all you have to do is ask' when it comes to the platforms (well for GCI and Deltastock anyway and my knowledge of MT4 is not TOO bad) i.e. I know those platforms (GCI's and Deltastock's) 'like the back of my hand' (even if I have to say so myself) and as you probably ALSO know I was in the computer business most of my working life right up until I started doing this for a living so if you need any help with exporting data and importing data and the like then please don't hesitate to ask.

And as far as the gun laws are concerned: I'm with you ALL THE WAY!!! The gun laws in this country have become so strict that it's almost impossible to (legally) own a firearm but the criminals around here are 'armed to the teeth'!!!

Boca:

Hope you enjoyed those shandy's man!!! I've had a pretty 'dry' week myself i.e. I TRIED to 'tie one on' on Wednesday night but was too tired to carry on!!!

Like I said earlier: it's not QUANTITY that is lacking here but I'm just a 'tad' surprised is all. And I also want to be sure that these systems are working for everyone else as well especially as I'm (maybe) guilty of elevating them to (almost) 'cult like status' through my 'rhetoric'!!! Hell: the only time I'm going to be ANY happier is when I finally reach the financial goals I've set for myself which are now at least attainable so you're right Boca: let's just keep 'grinding away'!!! Thanks for the support.

[mytwopips]

Hi Dale,
I pretty much agree with what else has been said. Earlier this morning when you posted I already had a long write up saying the same thing for the most part. Then one of my servers crashed and posting on Babypips wasn't the first priority anymore. Thank you for all of your contributions.

If all you want is a popular thread go to newbie island and title one like....
"99% win rate ea"
"the real holy grail"
"150 pips a day"
then leave the body blank.

I bet we would all be surprised how many views it got in just a few hours time. Your thread and inputs are far more valuable than you give yourself credit for.

[dpaterso]

Good (Sunday) morning everyone!!!

(Although I'll tell you I'm going RIGHT back to bed until opening time tonight after posting this message i.e. our winter has started here and today must be one of the most miserable days yet i.e. raining, cold, and misty. Not for me)!!!

Thanks for the good words 'mytwopips'. It seems as though there is some sort of 'computer epidemic' going around!!! Last week I had a screen 'pop' on me and last night I discovered another one that is no longer working and that one of my 'prize' Sony DVD-writers no longer will write a backup!!!

(OK: I'll continue to post here while I finish my HOT coffee this morning):

I have discovered something 'neat' with the VS by the way. It seems that EVEN IF you've missed the initial entry it's OK to enter late AND get the trade at a better price. If you've (for some reason like I did last week on one or two occasions) missed the initial entry you just continue to 'track' the VS SAR in the same direction as you have been doing and if the price closes above or below the SAR (above or below depending on which direction you're currently tracking) you can enter late. The benefit of waiting for a retractment and doing it this way is two fold: a) you get the trade at a better price and b) if you are for some unfortuanate reason forced to stop and reverse at a loss then the loss that will be realised will be less than it would have been. The same thing applies to the DMI System i.e. if you've missed a trade and the price closes again at some point in the future at or better than where the initial entry would have been then it's OK to open the position late WITH THE PROVISO that +DI/-DI have not crossed contrary to the original position as yet AND the price has not closed above or below the extreme point (above or below depending on whether you SHOULD have been long or short because of the initial entry that you may have missed). As a matter of fact waiting for a retractment MAY even be a valid 'tweak' to BOTH of these systems IF you're prepared to take the chance that there may NOT be a retractment and you're prepared to miss the trade altogether if the price does not 'come back to you'. It was while I was looking at Parabolic SAR again that the above sort of 'came to me' i.e. waiting for a price retractment using Parabolic SAR to enter is sometimes better than entering when you get the first 'dot' that signals an initial entry or a stop and reverse because a lot of the time the price retracts before it starts moving in the direction of Parabolic SAR (this I DO remember posting on the 'Parabolic SAR - that's all!!!' thread some time ago). Unfortuantely with all of these scenarios: patience and restraint is required and you do of course always run the risk of missing a good trade totally. I use a similar sort of 'method' with the SI System I must tell you i.e. if the price has gone past where my order should have been by the time I got to the instrument I wait for a retractment and then place the order where it should have been initially. What I've noticed is that if the price continues to retract then you're not in the trade so no harm done (as a matter or fact you'd be in a loss at this point normally) BUT if the price THEN 'barrels through' your order price you can be 99.999% sure that you're now in a good trade (because very rarely is the same price tested twice on the same bar and the price turns against you after that). As a matter of fact another 'valid' Parabolic SAR 'strategy' would be to place LIMIT orders at the current Parabolic SAR value and use the previous Parabolic SAR value as your stop (not stop and reverse). The reaon that this is 'valid strategy' is because sometimes Parabolic SAR is penetrated and then the price continues on back in the same direction afterward so ordinarily you would have been stopped out at this point for no good reason but NOW you're using the retractment as an entry point not as your exit point. Again of course the 'danger' is that you will miss a good trade altogether if there is no retractment at all during the course of the trade. This may even be a way to 'double up' on a Parabolic SAR position (assuming of course that this will not result in you violating your money management rules). Risky but possibly highly profitable.

OK: what's left of my coffee is now COLD so I'm 'back under the covers'!!! I'll catch you all later IF and WHEN the sun decides to make an appearance (or when trading opens again tonight i.e. whichever comes first)!!!

[Bocajunior]

Afternoon all,

How's it all going for everyone? I'm back at home now after a bit of work overseas so have been attending to the trading this week. A few entries went down and most are in the green right now.

You still get onto YM Dale? I haven't seen you there for a bit?

And one delta question, How do you get an account/trade history report?

Cheers
Boca

[dpaterso]

Heeey!!! Welcome back!!! Missed you!!!

I do still have 'YM' but seldom log in (well now and then if I have an 'appointment' with someone i.e. those constant 'pop ups' are a pain sometimes when you're trying to work)!!! (But email me if needs be)!!!

You can get a DAILY statement by going to 'Accounts', 'Statement', and then clicking on the day you want on the calendar that appears. (Like I said: I want to give you a trading statement for the MONTH but I can't 'fathom' how to do a MONTHLY report via the platform and I've not as yet had a response from Delta yet either i.e. I think that admin is only back tomorrow although I was under the impression that it was yesterday).

By the way (everyone). I've attached a chart of 'the perfect storm (trade)'. Take a look. Other 'factors': Oil cannot stay where it is for much longer, Gold will 'tank' with Oil, and AUD will 'tank' with Gold. Also: the Reserve Bank of Australia is done with rate hikes for now. And all of this ASIDE from all of Wilder's indicators, systems, etc. etc. etc. (I even 'threw' Stoch's at it for fun)!!! NOW: this DOES NOT mean to go margin your ENTIRE account on the trade and violate your money management rules!!!

[chirules54]

Dale, I'm also closely "eyeing" aud/nzd as well as a few other pairs for SI entries... hope things start reversing the way it looks like they are going to shortly.

I must say that my liking for the TBP system has lessened greatly over the past few weeks, especially with gold. I've been stopped out 3 of my 4 last trades I believe, and I think I am going to concentrate on other systems instead. What I want to do is trade with the "pure" SI system (filtered by adx/adxr of course) and then use the TBP, VS, and DMI systems "on the side". I know you believe (with good reason) that all of wilder's systems can be profitable over a period of time, but what do you think of this idea? Just from by brief time with the systems it seems like the SI is less sensitive to whipsaws than the other systems, especially with the "1.5x the spread + 5 pips" rule you mentioned earlier, it already kept me out of several trades that wouldn't have gone well had I just entered at the exact swing high/swing low value. I also want to start looking at the RT system, especially after seeing the great results you've had with it so far. I don't fully understand your "tweaks" to the SI and RT systems, so I think for now I will concentrate on learning "pure" SI and RT and seeing where that takes me..what do you think?