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

[dpaterso]

Hi,

Here's the link to what you're looking for:

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

(It's a link to the first page of this thread which is where you should have started reading in the first place).

(It amazes me you know: there's a new global phenomenon it seems: evidently people read books starting from the end of a book and then work their way backward to the beginning)!!!

[mytwopips]

Yes, it has gotten me too. I now always find myself in great suspense of how a story will begin.

Edit:
Speaking of suspense. Do you know the best way to keep a new, eager, and impatient trader in suspense?

Well if any of you don't know. I will post the answer next week.

[Bocajunior]

Originally Posted by wajisco

Pls, what is RT system. Where can i find it. Also which book are you referring to? Sorry for all my newbie questions. Thanks . wajisco

Is this a wind up? Come on man, I appreciate that you're a new poster, but have a look at the first page of the thread. Whilst there, check out the title of the thread.

The RT (Reaction Trend) is a system mentioned in the book of which name happens to be the title of this thread.

Boca

[dpaterso]

Good (Sunday) morning everyone!!!

Great posts you two!!! Made me 'cackle' this morning!!!

Now listen up:

It seems that my 'creative juices' are starting to work overtime here!!! I therefore would like to propose an addition to the RT System and would like your opinions thereon (fancy 'lingo' for this early on a Sunday morn')!!! (Yes I DO in fact sometimes dream about this stuff in case you're wondering)!!!

Right:

I propose to add two new levels to the RT System i.e. S2 and B2.

Explanation:

As I've now 'uncovered' and posted the RT System levels are actually Pivot Points / Pivot Levels right? Right. So. I now understand the logic as to why this system works so well i.e. essentially you're ALWAYS buying at B1 on a 'B' Day and selling at S1 on an 'S' day right? Right. Why does this work? Because 99.999% of the time an instrument WILL trade between Pivot Point / Level S1 and R1 during any given three day period ESPECIALLY when ADX/ADXR < 20 AND as we have now 'uncovered' RT System B1 = Pivot Point / Level S1 and RT System S1 = Pivot Point / Level R1. Now (and I was wrong in what I was saying the other day about Pivot Point / Level S3 and Pivot Point / Level R3 i.e. I was saying that these Pivot Points / Levels were commonly referred to as 'the dead high or dead low of the day'. Turns out I was wrong here i.e. I had another quick read over the chapter on Pivots in John F. Carter's book last night and it turns out that Pivot Point / Level S2 and Pivot Point / Level R2 are actually considered 'the dead high or dead low of the day' AND NOT Pivot Point / Level S3 and Pivot Point / Level R3 THUS making Pivot Point / Level S3 and Pivot Point / Level R3 EVEN MORE EXTREME levels)!!! Making sense so far??? Now what I'm suggesting is this: you buy at B1 on a 'B' Day as 'normal' and you sell at S1 on an 'S' Day as normal BUT you ALSO buy at B2 on a 'B' Day and you ALSO sell at S2 on an 'S' Day. In other words: if you're on a 'B' Day and you've placed your limit order at B1 and it gets executed BUT THEN the price 'barrels' through B1 on that day all the way down to B2 you'd have another limit order at B2 which at this point would obvioulsy get executed (and if it 'barrels' through B2 to LBOP you'd have yet another limit order at LBOP which at this point would obviously ALSO get executed). Now you're sitting with three positions on the same pair going long right? Right. Now I KNOW this is violating ONE of the (my) money management rules i.e. to not exceed 1.875% of your (current) capital balance on any single positions / pair / instrument. HOWEVER: this SHOULD be OK as long as you don't exceed the OTHER portion of the (my) money management rules i.e. the total amount of your capital balance being margined at any one time does not exceed 15% - 22.5% (all the percentages based on an account with 200:1 leverage by the way). Obviously the opposite applies to an 'S' Day. Now WHY do I suggest this??? Simple: to increase profitablity and to decrease the possiblity of taking a loss should you have to close out the position at either S1 or B1 as per the RT System at a loss which DOES HAPPEN sometimes IF you're following the system correctly. In other words (following the RT System 'to the letter') you would normally buy at B1 on a 'B' Day and then close the position at 'S1' on an 'S' Day BUT (in this example) if S1 is not hit on the 'S' Day OR if it IS hit on the 'S' Day sometimes the RT System levels MAY have moved against you (depending on what's happened to the price since the B1 order was executed) and this would result in a loss (normally) in this instance. HOWEVER: assuming that you now had two or even three positions open i.e. B1, B2, and LBOP as per the above the chances of you closing out the position(s) at a loss are reduced DRAMATICALLY simple because you have three positions open instead of just the one single position. Also: if the price action has moved AWAY and in your favour by the time you're ready to close out the position at S1 then your profits are DRAMATICALLY increased!!! I hope you're all with me at this point. Feel free to comment.

Now one last thing:

The RT System works SO well BECAUSE you're ACTUALLY trading using Pivot Points / Levels which are based SOLELY on price action!!! Having said that: I've tried to trade using Pivot Points / Levels with little or no success BUT I have now ALSO discovered WHY this did not work for me. There are two major differences between trading used Pivot Points / Levels and using the RT System. The first difference being the 'sequencing' which you would not ordinarily do using Pivot Points / Levels when trading using ONLY them. The second difference being that the RT System gives you a DEFINED exit time and price (level). What I'm saying is that the RT System is Pivot Point / Level trading BUT presented very differently. (And OK: I suppose if the truth be told there IS a third major difference and that is the fact that it's presented by 'the old man' which of course as you know tends to make be 'biased' i.e. ANYTHING 'the old man' says works for me)!!! In other words: I had very limited success with trading Pivot Points / Levels BUT the RT System presents them in a form that I can understand and are comfortable with using.

For those that agree with me the formula for S2 and B2 would be as follows:

S2 = ( ( H + L + C ) / 3 ) + ( H - L )
B2 = ( ( H + L + C ) / 3 ) - ( H - L )

Last note (further to my 'chuckle' comment above):

OK so maybe I came down a bit hard on the guy yestderday BUT you know what I've realised: people that are serious about LEARNING to trade will always start a thread AT THE BEGINNING and people who are just here 'to make a quick buck' because they've heard how easy it is (LOL!!!) will always go to the LAST PAGE of a thread. Have you noticed that??? I used to do it so I know!!!

[Sweet Pip]

This is like Davinci's Code...even R2D2 would be confused...

Guess I'd better get the "de-code" book...Amazon you say?

[dpaterso]

ROFLOL!!!

ROFLMAO!!!

Email me!!! (dpaterso@forexbrokersonline.net)!!!

I PROMISE you that you won't be sorry!!!

[dpaterso]

I know this is going to be a rather 'strange' post to some of you and I have been thinking very deeply about posting this here since yesterday but I feel I need to (maybe is 'absolution' I'm seeking by posting this. I'm not sure).

Between Thursday night and early Friday morning my Rottweiler bi*ch gave birth to ten perfect little pedigree Rottweiler puppies sired by my champion Rottweiler of the Von Sophias pedigree (some of you already know about this of course). It was her very first litter so everyone was very excited of course. Because she had so many puppies I was advised to assist her in bottle feeding them for about a week. Yesterday morning (Saturday) my eight year old son kept asking me to go out and move the puppies and feed them BUT being the 'obsessive compulsive trader' that I have become I kept on saying to him that I was 'busy' and that I would 'be there in a minute'. I was not doing anything really important other than 'obsessively' going through the charts and my trades for the past week. I could have done this at ANY time before the open on Sunday night (tomorrow night). But: as I usually do EVERY day ALL day I sat here practically the whole day 'pondering' my moves for the coming week and striking up conversations with anybody who was interested in trading on Yahoo Messenger. FINALLY I shut everything down and went to go and check on the puppies and feed them. By the time I did this one of the puppies was dead (the mother had suffocated the puppy by lying on him accidentally). The puppy was still warm when I got there. Was this just 'natures way'??? Maybe. I believe however that had I only got there an hour or two earlier that puppy would still be alive right now. I believe that had I not put this business and my obsession with it 'above all else' that puppy would be alive right now.

Now there is a message in the above from me:

It's REAL REAL easy to become obsessed with this business and put it 'above all else' which is exactly what I did yesterday and it had what I consider to be a very sad result.

Be careful that you don't let this business cost you MORE than money!!!

(I'm not looking for condolences or an in depth explanation of how nature works or anything else here by the way. I just needed to post this and share my thoughts because I feel so very strongly about what I allowed to happen).

Edit (15/05/2008):

Oh well. Lost another one today and this (thankfully) WAS INDEED 'natures way' i.e. the puppy could not / would not feed properly. We took her to the vet two days ago where she stayed and was tube fed but still could just not pull through!!!

Edit (18/05/2008):

Well: another one gone. Took ALL the dogs to the vet and apparantely it's 'just one of those things' i.e. 'natures way'. All the other dogs check out 100% (including the parents) and we're told that there is nothing to worry about. As a matter of fact: in nature i.e. no 'human intervention' dogs can lost up to 50% of the litter or more apparantely. All of this another 'learning curve' for me!!!

RIPLBD. RIPLGD. RIPLGD.

[dpaterso]

Good (Sunday) evening all.

Judging by the number of posts that appear over a weekend it's gratifying to know that I'm probably the only 'obesessive compulsive trader' here which is good!!! It means that I don't have to worry about you lot!!!

I hope you all have a very successful week (and I hope your trading goes well too)!!!

[randont]

Dale-
I understand where you're coming from. Don't beat yourself up too much. Your obsession is whats paying the bills. Growing up we've had puppies die the same way. Takes alot less than 2 hours to die when you have no oxygen . I remember one year we had this puppy that would freeze up on us. We would be holding him trying to keep him warm and he'd stiffen up like a dead cow. We revived it a few times and tried to keep him alive but he just was too weak and we lost him.

[dpaterso]

Hey Randon,

I appreciate the thought and the post. It was a bit of a 'wake up call' for me though i.e. before this happened I was actually commenting to someone the other day that the last eighteen month to two years or whatever i.e. since I started trading (or at least started TRYING to trade) are simply a 'blur'. Things that I thought happened just last year actually happened over eighteen months ago!!! But then: to be honest I suppose I'm just being 'me' i.e. never been any 'half measures' in my life!!!

(I'll tell you one thing: I'm now already dreading the day I have to part with (most) of them man ESPECIALLY now that I'm bottle feeding them. Even at THIS stage they SEEM to have their own personalities)!!!

Thanks again and you have a good week.