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

[dpaterso]

Now THAT makes more sense (if that's what he meant that is).

I suppose you could even set a trailing stop once you're at a certain target i.e. many ways to 'play the game'.

I'll tell you all this though:

MAN: a day like today is soul destroying!!! Do you know that as of 12h43 GMT the maximum pip movement on forex pairs (excluding the 'exotics') is a WHOLE 34 pips!!!

[dpaterso]

This is note to anyone who is going to open an account at Deltastock and is going to trade using my 'sysdicators' and money management rules:

BE SURE that you specify 'zero point five percent' or '0.5%' as the margin requirement for forex pairs on the relevant account opening document i.e. the equivalent of 200:1 leverage. The DEFAULT is 'one percent' or '1%' and this is the equivalent of 100:1 leverage and if you need this changed AFTER THE FACT you will be required to submit yet another ORIGINAL to them before the change can be made and of course this just serves to delay the opening of the account even further.

This applies at GCI:

The DEFAULT at GCI is 0.5% margin requirement or 200:1 leverage but all my 'stuff' for GCI is based on 0.25% margin requirement or 400:1 leverage so be sure to request this change when opening an account at GCI. This is a simple matter of sending an email request to them though.

[Bocajunior]

Good day everyone,

Thanks for more valubale insighst there Dale. The thread seem sto be gathering quite a following which is good. Sorry I cant contribute much right now as I'm a bit busy with work (bloody employers), but hoping to back soon.

Cheers all

[randont]

Dale-

How hard would it be to switch from USD to EUR as my base currency in my Deltastock account? Reason I ask is if the dollar collapsed and I think its a very real possibility then my account wouldn't be worth much. Besides the euro is performing quit a bit better.

[kaalilaatikko]

Originally Posted by pseudo straddle

Hi Dale, if I am reading this correctly and you are referring to -



I think kaalilaatikko means a profit target rather than a stop loss.

Cheers

Hello, gentlemen,

My reasoning went like this: the log showed 12 trades that went over 1000 pips, and 10 of them retraced back below 1000. So with this data it would have been over 80% possibility to loose pips after reaching 1000. I thought that once getting over 1000, it would be safe to secure what you have got and then see if you could get a bit more. So I initially meant stop loss. If this would have been done in the 10 year period, the total result would have been at least 8500 pips, but not much above it, as only two trades would have yielded something more. But anyway, that's about 60% better than by just blindly following VS.

If that 1000 would have been TP, the result would have been quite the same, only the surplus from those two trades would have been missed, 300 pips altogether, expecting that there would not have been any dips after placing the SL.

But maybe the best idea here might be securing the profits by a trailing SL, as was suggested. I have no idea what would be a good value, perhaps e.g. once the magical 1000p is reached, a trailing SL could be placed 100p behind. Without big dips, you might have been able to secure 12 * (100 ... 600) pips, meaning >1000p, maybe even more than a 2000p bonus above the 8500.

So this is so far just a study of one pair. I hope that other pairs would confirm my findings, let's see.

BTW, the log shows several rows of negative results, the longest of them being 5 trades, taking about 6 months of time and 1200 pips. That row was surrounded by a 1000p trade on both sides, but anyway, you sure will need strong nerves and good trust in the method while living through a row like that.

Does anybody have any comment about the figures I have shown? Are they "big" or "small", and by which criterion? Yes, I know, it is not always a good thing to measure results with pips, but as long as I am talking about just one pair, here all of these values are comparable with each other, and it is easy to give a €€ value for a pip as you like and go calculating the needed money management.

J.

[kaalilaatikko]

Originally Posted by dpaterso

Good (very early here) Monday morning!!!

kaalilaatikko:

Welcome and thank you for the interesting post and the trouble you went to to backtest the VS. Makes for interesting reading. One thing that does trouble me somewhat, however, is the (your) mention of a stop loss. The VS does not USE a stop loss at all so I'm not quite sure what you're trying to say.

One word of caution to everyone else: I am indeed aware of some 'free summaries' of Wilder's work on the Internet and I myself have had a good look at all of them. The details of the actual systems are 'sketchy' at best and really only give a very broad outline of the methodology or logic used. In addition to this I think I've made my (personal) stance on this issue very clear i.e. the cost of the book is a mere 'pittance' in relation to the potential profits (even fortunes) to be made and I can tell you that I've probably learned more from Wilder's 'non system specific' comments than I have from the actual systems themselves.

Thanks for the kind welcome for everybody! I just forgot to add in my previous post that I just placed an order for "the book" - hopefully this makes it a bit more legitime to take part here Well, I had already made a decision to buy it for a while ago, but had just been gathering some other books in the same Amazon shipment. They promised about one month of delivery time, so in the meanwhile I have just to suffer and come along with a poor man's solution

J.

[dpaterso]

Good (very early Tuesday) morning!!!

Randon:

To the best of my knowledge (I stand to be corrected but this is what my business partner was told a while back) if you ALREADY HAVE a USD denominated account you can open another account with a different base currency WITHOUT having to complete additional account opening documents at Deltastock. (I personally seem to be one of the few who has the utmost faith in the USA and the USD so I'm not QUITE sure that I agree with your reasoning but that's just me)!!!

kaalilaatikko:

I've said 'from the beginning' that the VS requires 'balls of titanium' to trade and loads of free margin / capital for the very reasons that you've now pointed out. Having said that: with sound money management rules you'll be fine and do well with the VS in SPITE of a number of consecutive 'bad' trades. Also: I'm not sure if your backtesting methods are able to, or do take this into account: just bear in mind that using stop losses could in itself cause the system to underperfrom over a protracted period of time i.e. remember that if you close out a VS trade early it could be days, weeks, or even MONTHS before you get another entry signal on a particular instrument or pair. In other words: while it may SEEM prudent to TP early with the VS remember that there may be very long periods of time when you will not get another entry signal i.e. the VS is an 'always in the market' type system i.e. a 'true stop and reverse system'. Just a thought. (Like I said: your backtesting methods may or may not include this 'phenomenon' and if they do not then just bear this in mind).

[TheRumpledOne]

dpaterso: sent you email and PMs .... anyone home?

[dpaterso]

Hello,

Just one more thing to add to our discussion about the VS.

Look: 'common sense' also has to be used when taking a VS trade (as with ANY trade I find).

Take a look at the attached chart.

The blue line across the chart is the current VS SAR (those of my 'clients' who have my 'sysdicators' know what I'm talking about I hope) and the VS dictates that if there is a close BELOW the VS SAR in this case i.e. below the blue line then it would be time to stop and reverse or enter by going short at market.

First: it's quite obvious that there is a (possible) low significant point a few days back (LO SIP) so going short EVEN IF the price closes contrary to the SAR would be madness at this stage (in my opinion of course).

Second: going short at market is NOT the way to go either (again of course in my opinion) i.e. I see it almost every day now i.e. a price will close contrary to the VS SAR and retract the very next day to well PAST the level where you got the entry in the first place!!! OK: sometimes (as Nick and Boca can attest to) even placing a STOP ORDER is no guarantee that you're not going land up in a 'bad' trade BUT the odds are that by NOT going in at market you will stay out of more than a few 'bad' trades.

In BOTH scenarios you'd end up losing BIG TIME for the simple reason that now you have to wait for ANOTHER close contrary to the VS SAR (you'd now be 'looking to go long' in this example) and this could take an absolute AGE to happen which needless to say is gonna cost you money. Also: you must take the 'interest factor' into account with the VS the reason being that you're in a trade for SO long that sometimes the interest being paid (or if you're real lucky being earned) becomes a factor!!!

[balaji3003]

I saw two potential RTS trades last night.
(the ADX and +DI and -DI) were all below 20.

a potential GBP/CHF long trade (Today is B day)
a potential EUR/GBP short trade(Today is S day)

But both pending orders are not executed yet.

Did any of you guys take these trades or am i making a mistake somewhere?
This is my first demo trade using the RTS system.
I would like to sharpen my skills furthur before trading real money (dale - i will put your name down as introducing broker for delta when i open a live account)
feel free to comment

Thankyou