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

[chirules54]

Dale, so are you saying that the RT system works best in "range mode" with pairs that have low adx values? Do you think "trend mode" is even worth using at all? It would be perfect if you could have a system or two for the high adx pairs (like SI and VS) and a system for the lower ones that are stuck in a range (like the RT). If you take a look at usd/cad for the past 6 or 7 weeks it appeared (and still does) to be a great candidate for the RT system.. look at that nice tight range from .9995 to 1.0270. It's funny, I never thought I ever wanted to see a graph like that, but now it's just another way to make some $$$

[dpaterso]

Hey Boca,

we move on. Albiet, with less money in our pockets.

LOL!!!

I just KNOW how difficult it must have been for you to make THAT statement (copper wire???)!!! That's why it's all the more appreciated!!!

Nick 'my man':

Looks like you need to go do a bit more reading!!!

The RT System is SPECIFICALLY DESIGNED for trading ranges and the prescence of a range being determined by ADX/ADXR being below 20!!! (Same with the TBP System). (See below for a more 'in depth' explanation of the concept).

Concerning the RT System 'Trend Mode':

The concept of the RT System is that it can be used in both a ranging or a trending market. The system dictates that you start in 'Reaction Mode' (in a range bound market as dictated by ADX/ADXR) and switch to 'Trend Mode' if a penetration of HBOP or LBOP occurs. The reason that I believe that this is (possibly???) flawed is because as I posted earlier: HBOP is Pivot Level R3 and LBOP is Pivot Level S3 and Pivot Levels R3 and S3 are EXTREME Pivot Levels ALREADY!!! In other words you're doing the equivalent of 'jumping in' at an ALREADY EXTREME Pivot Level / price. I'd ignore the 'Trend Mode' if I were you i.e. rather just use it as a stop if you MUST but NOT as a stop and reverse as dictated by the system. Either that or as I have said before: COUNTER trade the HBOP or LBOP levels (this is what's working FANTASTICALLY for me anyway)!!!

[pip huntter]

[quote=randont;47799]Good morning!

Welcome back Akram. How've you been? You don't know me but I know you. Well at least I feel like I do after reading all your posts on "Parabolic Sar thats all". Good to have you back.

So far all my trades with the reaction trend system have been winners! I'm not used to having so many good trades. Something must be wrong!



Hey Randont,

Well i am so galde that someone knows me here apart from Dale and Boca!!!thanks and yes i am back sitting on a nice profit for the oil right now!!that is why i am asking is the new system was calling for a buy signal for the oil 3 days back or not?

Regards,

Akram

[pip huntter]

Dale ,

I am not really trying to take some words out of your mouth to take actions based on what u will say coz basicly i can't do that coz i have to understand the system but what i did based on psar and some other indicators i found the candels look so sexy and reminds me with some old wininng trades i did and here it comes!! going like a rocket to the sky!!! that is why i wanted to know about the system u r following if u got the same signal or not.

and please don't think that i am here to intrupt u guys i am just trying to keep intouch and trying to have some knowlodge so when i read hopfuly i will understand something!!

Regards,

Akram

[chirules54]

You're right Dale, I need to look into the RT a little more. I skimmed over it between classes today, but I haven't gone into the full details yet. Seems like it's working great so far for you. I have an exam on monday so I might not have time this weekend to dig deeper into it, but maybe tomorrow afternoon I'll have an hour or two free. When you say to counter trade the hbop and lbop, do you mean to "trade the bounce" off of these levels? So when the price hits a hbop to sell the bounce and hope for it to go back into the range? I'll do a little more reading on it tomorrow hopefully and I'll post tomorrow.

[Bocajunior]

Hello All,

Yes, Dale, The copper wire thing. Never nice to lose money like that eh. Especially for a scotsman . But that's trading isn't it.

I agree that I like to use the RT system in markets with low ADX/ADXR values and as pointed out by Nick, USDCAD is a prime example. I have not used this in a trending market.

You know, the last few nights I have been re-reading a bit of the book every night, at the same time trying to finish my candlestick book, and the systems are becoming more and more clear. I'm still not entirely clear about a couple of things though. One is the BOSBOS labelling on the RT system and the other is TISAR on the SI system.

I think this BOSBOS labelling is a little bit hit and miss... Lets say I start with GBPUSD,,, I take a trade,, long or short,, depending if b1 or S1 is hit..I follow it through as per the system rules as far as exit and reversing etc.. then I have a BOS label for that day.. for example.. If the B1 is hit,, then that was B day and I can follow the system from there... Clear??! I thought not,, but feel free to comment. This is how I've been using it,, and only on low ADX/ADXR pairs.

For the SI.. i think i need to re-read the thread where Dale discussed the TISAR and the pipfactor.. as my TISAR is either too close,, or too far away from the price to be worth using at all...Like I said, I need to be more clear on this TISAR set-up as right now I am very hit & miss with this.

ok doke all
over for now

[Bocajunior]

Originally Posted by pip huntter

Dale ,

I am not really trying to take some words out of your mouth to take actions based on what u will say coz basicly i can't do that coz i have to understand the system but what i did based on psar and some other indicators i found the candels look so sexy and reminds me with some old wininng trades i did and here it comes!! going like a rocket to the sky!!! that is why i wanted to know about the system u r following if u got the same signal or not.

and please don't think that i am here to intrupt u guys i am just trying to keep intouch and trying to have some knowlodge so when i read hopfuly i will understand something!!

Regards,

Akram

Hi Akram,
Really is good to se you back onboard.. I hope you can read the book and we could do with your insights on here.

I'm not sure about oil,,as I haven't really been following that so closley with any system but let me say this about the book...

Generally, the systems are very detailed and can not really be explained by posts/online etc,, so even if Dale or somebody else wanted to,, it would be a hell of a task to layout each system on here and then deal with all the questions that would follow.

The other thing,, there about 5 or 6 systems detailed in the book,,, so you have to decide which one/s you would like to try out. Which ones fit your style etc.

But what I like most about that book,, is that Wilder explains how to use various systems in certain markets,, such as TrendBalancePoint or Reaction Systems in ranging markets, or Swing Index/ Directional Movement in Trending markets.

Some of the ideas and insights in there are incredible.. Too think how he must of coped in 1970's with the technology he had at that time, and you really appreciate how much work and how brilliant he must of been.

I tell you,, you will not be disppointed if you get your hands on that book.. And you are at the perfect time to read it, as the folks on here can try and help you out if there are things that are not clear.

Cheers
Boca

[pip huntter]

hI Boca,

thanks alot i know the system is not easy for some one to explan over here so that means i have to read it carfully to understand it more and more.But i got the picture from u now .any ways i will keep on reading whatever u guys will write over here coz i think it is helpful to know how people react with these systems.

Best Regards,

Akram

[randont]

Originally Posted by Bocajunior

Hello All,

Yes, Dale, The copper wire thing. Never nice to lose money like that eh. Especially for a scotsman . But that's trading isn't it.

I agree that I like to use the RT system in markets with low ADX/ADXR values and as pointed out by Nick, USDCAD is a prime example. I have not used this in a trending market.

You know, the last few nights I have been re-reading a bit of the book every night, at the same time trying to finish my candlestick book, and the systems are becoming more and more clear. I'm still not entirely clear about a couple of things though. One is the BOSBOS labelling on the RT system and the other is TISAR on the SI system.

I think this BOSBOS labelling is a little bit hit and miss... Lets say I start with GBPUSD,,, I take a trade,, long or short,, depending if b1 or S1 is hit..I follow it through as per the system rules as far as exit and reversing etc.. then I have a BOS label for that day.. for example.. If the B1 is hit,, then that was B day and I can follow the system from there... Clear??! I thought not,, but feel free to comment. This is how I've been using it,, and only on low ADX/ADXR pairs.

For the SI.. i think i need to re-read the thread where Dale discussed the TISAR and the pipfactor.. as my TISAR is either too close,, or too far away from the price to be worth using at all...Like I said, I need to be more clear on this TISAR set-up as right now I am very hit & miss with this.

ok doke all
over for now

Good morning!

Boca-I think you're making the BOS more complicated than it needs to be. From my understanding and its worked very well so far 8 trades taken and all 8 for a profit. You need to take the most significant high or low going from today backward. The following system kinda helped me understand this concept better:
PRICE ACTION SYSTEM


Sell:

1. First candlestick makes Higher High
2. Second candlestick makes Lower High
3. Third candlestick breaks low of 2nd candlestick (candlestick that made Lower High)
4. Sell when 3rd candlestick breaks low of 2nd candlestick.
5. Take profit is personal choice. I like 50-100 pips. Rest i place trailing stop loss
6. Stop loss is 20 pips above candle that make Higher High.

Buy

1. First candlestick makes Lower Low
2. Second candlestick makes Higher Low
3. Third candlestick breaks high of 2nd candlestick (candlestick that made Higher Low)
4. Buy when 3rd candlestick breaks high of 2nd candlestick.
5. Take profit is personal choice. I like 50-100 pips. Rest i place trailing stop loss
6. Stop loss is 20 pips under candle that make Lower Low.

Once you have that you basicly stick with it till you have a LBOP/HBOP or something close to being a LBOP/HBOP. It also helps to reread it, always becomes more and more clear that way. I just look for the nearest large candle to today and start there with my B or S(BOS).

As far as SI goes. I'm right there with ya. I'm hoping that I will "get it" as I trade it more and more.

My RT trades:
EUR/USD 3%gain
USD/CHF still in the trade but it's green
GBP/USD trade still not triggered
USD/JPY trade still not triggered

Total 5 % gain for the week.

Cheers,
Randon

[Bocajunior]

Originally Posted by randont

Good morning!

Boca-I think you're making the BOS more complicated than it needs to be. From my understanding and its worked very well so far 8 trades taken and all 8 for a profit. You need to take the most significant high or low going from today backward. The following system kinda helped me understand this concept better:
PRICE ACTION SYSTEM


Sell:

1. First candlestick makes Higher High
2. Second candlestick makes Lower High
3. Third candlestick breaks low of 2nd candlestick (candlestick that made Lower High)
4. Sell when 3rd candlestick breaks low of 2nd candlestick.
5. Take profit is personal choice. I like 50-100 pips. Rest i place trailing stop loss
6. Stop loss is 20 pips above candle that make Higher High.

Buy

1. First candlestick makes Lower Low
2. Second candlestick makes Higher Low
3. Third candlestick breaks high of 2nd candlestick (candlestick that made Higher Low)
4. Buy when 3rd candlestick breaks high of 2nd candlestick.
5. Take profit is personal choice. I like 50-100 pips. Rest i place trailing stop loss
6. Stop loss is 20 pips under candle that make Lower Low.

Once you have that you basicly stick with it till you have a LBOP/HBOP or something close to being a LBOP/HBOP. It also helps to reread it, always becomes more and more clear that way. I just look for the nearest large candle to today and start there with my B or S(BOS).

As far as SI goes. I'm right there with ya. I'm hoping that I will "get it" as I trade it more and more.

My RT trades:
EUR/USD 3%gain
USD/CHF still in the trade but it's green
GBP/USD trade still not triggered
USD/JPY trade still not triggered

Total 5 % gain for the week.

Cheers,
Randon

Randont,
Thanks for the reply. I salute your results as well. You are doing a lot better than me at present.

The system you outlined there is different from the RT system. I'm sorry if I am still confused but are you trading the RT or the system you posted?

What I meant regarding the BOSBOS labelling, is that it is not always obvious what is a high or low significant point, so depending on the user, days may be alloctaed differently.

Best Regards
Boca