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

[dpaterso]

I note that I appear to be the only person awake and working this morning!!!

I see that AUD/USD is up today. Possible SIS entry to go long coming up??? Enter with SIS and track with VSTOPS???

[Bocajunior]

Originally Posted by dpaterso

I note that I need to get another Red Bull out of the fridge!!!

That's a good one Dale.

Ok, thanks a lot for your posts and the latest batch of indicators. I like the adition of this VHF indicator and can see where it has merit. I had notoced before that just by looking at the candle chart I can visually see the range and have been tempted to ignore the number that ADX/ADXR is telling me. However, I think we all like a definitive number to tell us if we are trending or ranging one way or another.

Another thing that I like to do is check the angle or slope of the LRC and tend to shy away from pairs where the LRC is at a steep angle. Comments?

I know I discussed with Dale before about taking a RT entry then that pair breaks out of the range and effectively landing me in the sh*t. Well, that has happened with AUD/JPY last week where I am still long and looing for it to hit S1. Even if it does, I will take a loss on this trade.

I have added the new ADX_smoothed to the charts now. I have a question though.. Is this the one that is decribed in the book by wilder? Which one should be used,, in your opinion? I see now that the ADX values are a lot lower than when using the previous ADX indicator. I really think we need to get this right if we are going to use it for the DMS and for determining a trending or ranging market.

Thanks to all who have posted their monthly reports. I wish you all, and myself, the best of luck for the month ahead. I really realy hope that we can all reach the levels that we aim for. Keep the faith.

Best Regards
Boca

[Bocajunior]

Ok all, one more thing.

Dale just posted his " the way he works etc" in his last few posts and this lead me to an idea I'd been thinking about for a while.

I think I am going to post the way that I trade the RTS on the thread and put it out there for open comment. The reason that I am doing this is that I think we can say that all of us are trading modified versions of the systems in the book so I think it would be good for us all to pick and take ideas off one another and see what each other are doing.

I shall post the method I use for RTS later today.. Feel free to shoot me down,, but in all honesty,, I am open to any suggestions or comments that you all may have.

Cheers
Boca

[dpaterso]

Y'ello!!!

Nice to see you around!!!

Go for it!!! That's the purpose of the thread!!!

I've decided to post these 'inane' posts though to demonstrate what I take into account on a daily basis (all day). In other words: it's a 'big picture' I'm trying to take into account and I'm using as many resources as are available to me to do this.

[dpaterso]

Removed orders for USD/TRY and GBP/NOK and GBP/BGN.

Moves down at present have too much strength behind them so I'd rather try to get them at a better price i.e. a lower RTS level later today or tomorrow.

Stocks still tumbling so now looking to buy Wachovia (WB) and Keycorp (KEY) at their next lowest Fibonacci level. Have bought Washington Mutual (WM) and Freddie Mac (FRE) at market. Will track all of these trades (entered at market and / or those 'on order') with the VSTOPS once again from the date of entry. Motorola and Cigna Corp (bought last week) now in good profits (Motorola over 100% of cost of position).

[kaalilaatikko]

It seems that the thread is getting new wind under the wings, great! I today opened all the VS positions I selected yesterday except USD/SEK, which seemed to have too strong resistance. In addition, the limit of one of the RTS trades (GBP/USD) has been hit - and that trade seems to be going against me quickly right now.

Originally Posted by Bocajunior

I have added the new ADX_smoothed to the charts now. I have a question though.. Is this the one that is decribed in the book by wilder? Which one should be used,, in your opinion? I see now that the ADX values are a lot lower than when using the previous ADX indicator. I really think we need to get this right if we are going to use it for the DMS and for determining a trending or ranging market.

Yes, ADX_smoothed does the calculations in the Wilder way. We haven't been able to define unambiguously, which one of them is better. When I did some backtesting a while ago, it seemed that the unsmoothed one gave better results for most of the pairs, but then there were also pairs for which the smoothed one was better. When I have been putting the pairs in order, I've been using the unsmoothed one only, because it has seemed to me that those values are much more comparable. I don't have any harder evidence for that, it's just a hunch.


Dale:

You'll notice that IN NO INSTANCE will I just buy or sell on a 'whim'. I'm looking at all the 'outside factors' (fundamentals???) that may influence my trading BUT I'll only place orders or take trades based on our trading systems with those 'outside factors' as a 'GUIDE to direction'.

Not a surprise, but this is now much more clearer. This may be one missing link that separates good trading from bad. I wonder how much impact this will have on my trades, as I'm working at office hours, and when making trading decisions, among others placing RTS limit orders, I have only a limited amount of fundamental information available. Whatever happens during the day may then turn the trades against me. I hope that these systems are stronger than the fundamentals, otherwise I may be in trouble.

J.

[dpaterso]

Motorola hit the TP I'd set (and then continued on rallying WAY UP)!!! Just one of those things. Will now have to wait for the (inevitable) retractment before buying again. Also TP on UAL.

Removed orders for GBP/NOK and GBP/BGN as previously stated. Good call. Will get at a better price later tonight or tomorrow. If not: to bad.

Probably missed additional buy on USD/RUB and USD/TRY now so will just have to be satisfied with current potential profit. Watching for move to the downside tomorrow IF the Fed does not hike rates.

???/ZAR pairs still on the 'radar'.

[kaalilaatikko]

Got an idea: how about combining the following with TBPS? I.e., select only those TBPS trades for which the mentioned entry criteria hold, but set TP and SL as by TBPS.

I was able to find the following trades for today:
GBP/CAD Short (still open)
EUR/CAD Short (SL)
EUR/CHF Short (still open)
CAD/CHF Long (SL, initially AC almost 0)
CHF/BGN Long (still open)

Well, doesn't show too good...

Originally Posted by dpaterso

This is probably the easiest and LEAST stressful of anything I've come up with 'to date'.

Very simple:

Long entry:

Go long (either at market or by placing a stop order AFTER THE CLOSE) when AC has turned green from red BELOW the zero line. Track the trade using the VSTOPS FROM THE DAY OF ENTRY. TP either at the VSTOPS STOP line (or VS SAR) or at a predetermined level set by you.

Short entry:

Go short (either at market or by placing a stop order AFTER THE CLOSE) when AC has turned red from green ABOVE the zero line. Track the trade using the VSTOPS FROM THE DAY OF ENTRY. TP either at the VSTOPS STOP line (or VS SAR) or at a predetermined level set by you.

[dpaterso]

Good (Tuesday) morning!!!

kaalilaatikko:

Not sure why or what you're saying about my VSTOPS/AC 'system'??? Anyway: as soon as a find a trade based on this that 'tickles my fancy' I'll let you know, take it, and show you what I mean. In the meantime: feel free to give me an example of WHY you say (I ASSUME that you're saying) it's 'not good'!!!

Anyway: on with the next trading day.

Been through the usual routine of visiting websites, checking open positions, checking for potential trades today, etc. etc. etc. I note that the Dow, S&P, Nasdaq, FTSE, and DAX Futures are up indicating a higher open initially. Asia and Australia are down at the moment and will probably close there shortly. Not down by much though. The markets will probably be a little quiet today in anticipation of the Fed rate meeting later today. I note that Oil, Gold, and Silver are down right now. MOST commodities are down today. And ALL this before my first cup of coffee!!!

[dpaterso]

Hello again,

Further to my previous post regarding my VS/VSTOPS/AC 'system':

Watch these pairs for now (I'll post more as I find them):

GBP/ZAR
EUR/ZAR
USD/ZAR

AC has turned green today below the zero line. You MUST wait for the close, however, to ENSURE that AC 'closed green'. If so: place an order 'a couple of ticks' above the high of today's bar. If the order gets executed tomorrow then use the VS/VSTOPS 'looking to go short' using tomorrow's date.

Don't get me wrong:

This is not for the 'feinthearted' or 'undercapitalised' or 'impatient' but it is profitable.