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

[chdorry]

Originally Posted by Zerix

Ok, I'm a little confused... so this book offers trading systems that you can actually follow and use for forex right? I was thinking of buying it, or any book really (I have none) for some help or guidance, cause I'm still really new and I've blown out my first real live account already, unfortunately.

Zerix - Welcome to the thread. Sorry to hear about your first live account. One of the biggest things that I've learned both from the book and discussions with others about the book is that money management is one of the biggest problems that new traders have.

To answer your question, this book has several trading systems that have been applied to Forex with good results. I'm relatively new to Forex myself, and these systems and the group of folks working here have been a great help. I'd recommend buying the book and studying before you get back in the game. If you check Dale's website (forexbrokersonline dot net) as it offers a discount code to purchase the book. Also, the book is available online at most (if not all) booksellers.

I can say I've personally thought the book was a great read, but let me tell you up front there's not a lot of "fluff" in this book, he cuts right to the chase and "gets down to business". I'd recommend getting a copy, reading it and reading through this entire thread. Once you've read through the book, feel free to post any questions or contact some of us via YM if you have any additional questions.

Best of luck.

[dpaterso]

Good (Sunday) morning folks!!!

Zerix:

I'm not quite sure what you're confused about to be honest. This book contains trading systems developed by J. Welles Wilder Jnr. back in 1978. Wilder traded commodities and precious metals with these systems. I have adapted them for the forex market is all. To date (since February of this year anyway for most) I'm not aware of anyone who has not realised a minimum 20% gain per month trading these systems (at least not once the 'fear and greed' factor has been removed from the equation)!!! Don't worry about 'blowing' your first live account: believe me it's happened to the best of us. Fortuanately for you: you've 'stumbled' across this thread so it will be the LAST live account you 'blow up'!!! Basically: you buy the book (email me for the discount code if you're interested), and if you open an account at either GCI Financial or Deltastock (seeing that you're in the USA you'll only be able to open an account at Deltastock) and specify me as the Introducing Broker then you will get the trading systems in 'the book' which I've 'coded' as indicators and of course free support and backup for them (see my website for further details) as well as mentorship using Yahoo Messenger (to the best of my ability) and of course you'll be 'welcomed to the club'. Just one thing: do NOT be fooled into thinking that it's 'easy money' because it's not. The people who are making money here are spending a good many hours every single day trading these systems so if you're not prepared to put in the effort then you're going to be wasting your time (as well as ours) and money. The trading systems in 'the book' are NOT a 'quick fix' i.e. they are tried, tested, and proven trading systems that IN THE LONG RUN will make you money.

[Zerix]

Thanks for the replies, I'll definitely think about it, I think I might just buy it. I'm on vacation from school right now so putting in some time into this won't be a problem at all.

[AkramMohsen]

Hello everyone,

so Dale that means that we have to have delta or GCI as a must to trade with these methods? or we can have our own broker who is using the MT4?


Akram

[kaalilaatikko]

Last week was missed by me because of a holiday excursion, but this week it is time to continue with a refreshed mind. I have been thinking some money management issues today after getting live trading experience from a couple of days so far. I initially thought to use the smallest lot sizes for all trades for a while, but that is a bit too close to demo trading - you use lots of time just to see how you make or lose an € or two. I still think to practice with tiny trades with those systems I'm not yet comfortable enough.

But now I am facing the question how to weigh the trade sizes against each other, when several systems are in use at a time. Dale has stated that none of his positions exceeds 1.875% margin of the total capital. This is a decent rule. But do you folks use this kind of a rule as a lower limit as well opening each trade with about the maximum margin? I have been thinking to use the potential maximum loss as another factor in counting position sizes. This would mean that longer-term systems, i.e. VS and DMS would be used with smaller position sizes than the shorter-term ones. In addition, those pairs that have higher volatility would be reduced in trade size. Does anybody apply these kind of money management rules, or how do you balance your trades? chirules54 presented his method in post #83 for weighing the pairs within one system, and I wonder if somebody has invented something like that for concurrently used systems.

J.

[kaalilaatikko]

Dale,
do you place a stop for a VS trade according to VSSTOP immediately when the position is opened, or only then when VSSTOP is above BE?

J.

[chdorry]

Originally Posted by AkramMohsen

Hello everyone,

so Dale that means that we have to have delta or GCI as a must to trade with these methods? or we can have our own broker who is using the MT4?


Akram

Akram - There is no requirement for having a delta or GCI account for trading, as these systems apply to the market, not a specific broker. The benefit of using delta or GCI is that once your account is opened, Dale will give you the indicators for these systems FOR FREE. If you want to use these systems with MT4 trading interface, you will need to either do the calculations offline or code the indicators for MT4. (Note: There are many MT4 indicators out there with the same name, but they are much different than the Wilder version of those same indicators.)

Hope this helps.

[chdorry]

Originally Posted by kaalilaatikko

Dale,
do you place a stop for a VS trade according to VSSTOP immediately when the position is opened, or only then when VSSTOP is above BE?

J.

J - That green line you see on the chart is the same as the pink with the exception of the constant multiplier being 2 instead of 3 (or 3.1). My understanding of how its used is two ways:

1 - To get in earlier
2 - To get out earlier

As the VS is somewhat analogous to an "intelligent trailing stop", you will always see the green line SAR closer to the close than the pink line. So this can be used to SAR when the price breaks through the green line (instead of waiting for it to reach the pink). Using this on entry or exit can change the results you will get, as if you're long and you use the constant of 2, you'll be more responsive to a pullback that *might* not be a reversal of the trend.

Or in theory you could use the VSSTOP green line for exit, but use the pink line for entries into positions. The combinations are endless, and different approaches will yield different results with different pairs at different times :-)

Hope this helps (some).
Craig

[AkramMohsen]

Originally Posted by chdorry

Akram - There is no requirement for having a delta or GCI account for trading, as these systems apply to the market, not a specific broker. The benefit of using delta or GCI is that once your account is opened, Dale will give you the indicators for these systems FOR FREE. If you want to use these systems with MT4 trading interface, you will need to either do the calculations offline or code the indicators for MT4. (Note: There are many MT4 indicators out there with the same name, but they are much different than the Wilder version of those same indicators.)

Hope this helps.

Thanks yes that helped me to understand it i really appreciate your great help

Akram

[kaalilaatikko]

Craig, thanks for your view! My experiences on VS are based on my initial studies on VS, about which I posted bactesting results a while ago. Then I did not have any idea of using VSSTOP, but experimented with different C factors and ATR period lengths. I also have messed a bit with VS when demo-trading, and I did not utilise VSSTOP then either.

Originally Posted by chdorry

J - That green line you see on the chart is the same as the pink with the exception of the constant multiplier being 2 instead of 3 (or 3.1). My understanding of how its used is two ways:

1 - To get in earlier
2 - To get out earlier

As the VS is somewhat analogous to an "intelligent trailing stop", you will always see the green line SAR closer to the close than the pink line. So this can be used to SAR when the price breaks through the green line (instead of waiting for it to reach the pink). Using this on entry or exit can change the results you will get, as if you're long and you use the constant of 2, you'll be more responsive to a pullback that *might* not be a reversal of the trend.

I would say that at least do not do it for both at the same time! A factor of 2 simply does not seem to work alone for VS. I have been considering VSSTOP for exit only, and I have been thinking to do some re-backtesting by using VSSTOP as a trailing stop. It might be interesting to look at the entry as well, but personally I have the gut feeling that it would not be a good idea.

Anyway I firmly believe that a trailing stop is a good idea to use. I just don't have any experience when to place that stop, and therefore my original question: would you prefer using the "standard" SAR for exiting when VSSTOP would still yield a loss, or would you rather take a loss at VSSTOP right at the beginning, should the trade go against you right ahead?

My backtesting indicated that each pair seems to have some level above which it would be quite reasonable to lock the profits, as it is more probable that the trade will turn against you after that level, if you use the standard SAR for exit. I think that VSSTOP works quite in the similar way and it might be good to take it into use only when the trade is well on profit. On the other hand, if you use the standard SAR in the beginning, it might be better for the whole trade, but then you'd better have the famous "titanium balls". But again, I have no data to back my thoughts as far as VSSTOP is considered, and therefore I would be most interested to hear real-world experiences about this.

J.