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

[Bocajunior]

Good day all,

I'd like to thank everyone for their comments on the RTS and some valuable insights into trading itself. Agree with almost all of what has been said regarding knowledge, psychology and money management etc. I have a few ideas to work on and to look at now.

It is shame the the US folks cant trade CFD's but I hope we can still discuss them here even within this FOREX forum. I may post a "CFD Post" in the title in future so anyobody who is not interested can just skip the post.

Cheers
Boca

[Bocajunior]

All,

This bloody advert is affecting my enjoyment of this site. Am I the only one that feels this way? What do others think? Why does it need to keep popping up and returning me to the top of the page while I'm trying to read the thread. I urge the admin to remove this hideous advert form the site.

I state here and now that I will never ever vist freshpips.com website on account of them having this most annoying advert I have encountered.

[dpaterso]

Hello again (Sunday).

Hmmm. A bit 'testy' this morning Boca??? LOL!!! (The 'workaround' is to have CCleaner installed and instruct it to 'keep' all the babypips cookies i.e. to NOT delete them. This way you 'stay' logged in and your setting for NOT wanting to see the ad is retained. Once you log out of babypips or the cookie gets deleted the ad appears again 'by default')!!!

Now:

I am NOT saying that in order for this business to work you have to (like me) be 'obsessive' about sitting with it 25 hours per day (that's 24 hours per day PLUS my lunch hour)!!! All I'm saying is that it's something that you have to have a passion for AND you DO have to dedicate at least SOME time (even if it's just an hour per day) to 'soak up' some news. A FINE example of this is here TODAY:

Bloomberg.com

Just from this ONE WEBSITE you, with the 'click of the mouse', have insight as to what's going to happen with the AUD this week for example (and of course this affects the NZD as well)!!! That's WITHOUT even going to look at ecnomic calendars and the like!!! But also remember: it's NOT the 'analysts analysis' you're interested in i.e. it's just the 'feel' for the week (and in my case 'day and hour') that you're trying to 'get a handle on'.

One thing you have to be aware of though is this: of late (I say 'of late' because EVEN I remember the day's when an interest rate cut or hike used to send a pair 'into orbit'), interest rate changes appear to be 'factored in' by the market ALREADY and this is, of course, a problem as you're (I'm) never sure. (One GOOD reason to NOT 'trade the news' I suppose and yet ANOTHER very GOOD reason to trade with the VS/VSTOPS)!!! I mention this because JUST BECAUSE you may now have read that the RBA may drop interest rates this does NOT NECESSARILY mean that the AUD will weaken further and could in fact EVEN cause it to start rising again!!!

If you're 'in' Silver and Gold then here's another site that I've found useful from time to time:

Gold Price

(Take a look at the 'GOLD PRICE COMMENTARY' section).

Again: it's not the 'analysis' that you're looking for really but just a 'heads up' or 'feel' for the market (although I WILL say that the guy that runs the site and does most of the commentary VERY RARELY has been WRONG to be honest e.g. when I lost LOADS on Gold last year it was probably the ONLY place where I read that Gold WAS INDEED going to go $1 000 an ounce and beyond but 'NOT YET' whereas EVERYBODY else was talking 'days' at the time. It took at least SIX MONTHS to get there. Again: it's a 'feel' you're trying to get from these sites NOT trading signals)!!!

kaalilaatikko:

A point: the RTS DOES work for me BUT if I REALLY think about I only ever take RTS trades 'on the fly' during the trading day i.e. very seldom IF EVER do I set up an RTS trade just after the close and then 'hope for the best'. I'll sit and watch a movement on a pair (I've not used the RTS on stocks at all) during the trading day and place orders when the price is coming into my 'RTS range'. If the movement is 'violent' I'll move the orders further away. What I'm saying is that MAYBE THIS is the reason it works for me so well and not quite as well for others??? Of course: for those that CANNOT sit and 'obessess' about this business all day every day then the VS/VSTOPS and SIS are 'top of the pops'. As a matter of fact: you'll PROBABLY find that BECAUSE you do not / cannot sit and watch the trades all day every day you'll 'do better' with both of these systems. As an example: I don't know MANY people EVEN IF they were trading with the VS/VSTOPS on Friday that would NOT have 'pulled' their position at a loss when they saw Silver 'drop like a stone' and started to panic!!! The fact that the price retraced and closed WELL AWAY from the SAR would not have helped any in this case!!! Now if you'd NOT been watching you'd not have fallen into this trap!!! (I'm not saying that you did but I'm pretty sure that MORE than one trader 'pulled out' the moment that the panic set in)!!!

[dpaterso]

Good (Sunday) evening.

Well: it's almost 'opening time'!!!

C'mon folks: we have two WHOLE weeks to go till month end!!! Let's make a 'decent and profitable dash' till the end of the month!!!

If you need help: let me know and I'll do my best.

For now: I normally 'do nothing' on a Sunday night i.e. I'm never quite sure what the 'general direction' of anything is going to be until tomorrow morning (and even then: Monday's are normally quiet days but it's THEN that I'll start looking for RTS trades depending on the intraday movements).

Right now it's too early to see what's going to happen with the AUD and NZD pairs because the news data is only due very early Tuesday morning so we'll just have to wait and see. Suffice to say that I will follow the trading systems (particularly the SIS for confirmation of my VS/VSTOPS trades) on any positions that may be open right now. Only a 'tiny little bit more movement' in the AUD and NZD prices would (in most cases) result in you being given a Trailing Index SAR signal to go long so watch out for them. Watch the USD as well for some possible shorts.

Have a VERY good trading week!!!

[dpaterso]

Good (Monday) morning all!!!

Stocks and metals:

Take a look at ABX (Barrick Gold Corp). Not too 'expensive' (I'm long already from last week) AND it looks like Gold just MIGHT be turning up again (at least for now). All mining stocks up on our JSE this morning.

Interestingly enough: I was watching an interview with someone on Bloomberg who trades in Gold. While there MAY be a lower bottom his comment was something along the lines of 'how good do you need or want to be'??? In other words: (and this applies to just about ANY instrument IF you're using the VS/VSTOPS) do you really need to 'call' the EXACT 'bottom'??? No you don't. So if you're 'in' slightly early all it means is that you're going to carry a loss for a while before turning a profit is all. He makes a good point in my opinion!!!

Also: HD (Home Depot). Reports earnings tomorrow. Watch for the drop and possible good buying opportunity thereafter!!! Careful with this one though: it's had some good gains over the past couple of days / weeks.

And some 'stock help':

Company Earnings Calendar

NYSE, New York Stock Exchange > About Us > News & Events > NYSE Calendar

And for BOTH stocks, metals, commodities, and forex: don't forget to check Delta's news feeds.

Financials (US) (my 'stars'): Just about EVERY ONE of them has a clearly defined SIS HSP so watch these too!!!

Forex:

AUD and NZD and GBP and EUR are all gaining slightly this morning and USD is coming down. It's interesting to note (as mentioned previously) that the SIS is close to giving Trailing Index SAR signals on pretty much all of these instruments.

[chdorry]

Originally Posted by dpaterso

As far as the NZD is concerned:

All I know is that New Zealand did in fact release some 'better than expected' results during the week although I'd not have imagined that they could have / would have affected the value of the NZD by THAT much.

Personally: I believe that the current movements in the price of the NZD has a lot do with the drop in Gold and Oil and AUD. I get a daily commentary from 'Oz Forex' (who OBVIOUSLY know what's going on with both the AUD and the NZD) and what I've noticed is that when there is no 'real big' data releases they say that they expect the NZD to follow the movement of the AUD. This is obviously the reason that AUD/NZD never moves like any of the other AUD or NZD pairs i.e. it's always the exception (well up until this week anyway).

My UNEDUCATED opinion: I'd not get TOO carried away with ANY NZD pairs because frankly I don't really understand what / why the NZD moves like it does.

Hmmm.. coming to that revelation of not really understanding why the NZD moves like it does might've been useful on May 1st...LOL Just kidding Dale, hopefully you've been able to use this AUDNZD pullback to whittle away at that position. Hopefully we get some good NZD news tonight and that will really drive that thing to BE.

Anyway, I jumped into some NZD trades last night.

NZDCHF, NZDJPY Long and EURNZD short. I'm up about 5%, and with the news coming this evening I've already set up some stops to lock in about 3% profit if it were to run down and take out the stops. Now, *IF* the news causes a nosedive this might slip, but I doubt it will eat my full 3%.

At this point, I'm going to watch it for the day and then update my SL's this afternoon (EST) in advance of the NZD news this evening. So worst case, I see this turning into another hundred plus friends in my account balance, and best case is the news is good, and we have NZD liftoff

Best of luck to all with it. Note: *IF* you aren't in already, I'd personally recommend you wait til after the news. *IF* the news is good for NZD, then I'd expect NZDUSD would be a good buy as its closing for a SIS entry (barring a major drop), but of course this is just my two cents (feel free to give me change

Best of luck to all.

Update: Locked in 4% gain on this, it has pulled back and taken out my stops. Might look to re-enter after news this evening (above today's high) if the news is good, although that's still a decision to be made. Or might just try to re-enter the NZD via NZD/USD pair which is giving a SIS. Not sure exactly how I'll play it as I need to see where things "close" for the day.

[chdorry]

Well I hope everyone is sitting tight as it appears there should be a good number of signals generating for the remainder of this week. I'm personally looking at some EUR strength positions (ie long EUR/??? pairs). Will be quite an interesting shakeup as the USD appears to be showing some kinks in its recent one month runup. Hopefully everyone can find profitable trades in this one.

One thing I'm planning to do right now is "hedge" my trip to Germany in October. If I buy EURUSD long, then I'll in essence "lock in" the current exchange rate. By that I mean if EURUSD goes up, my gains will offset the extra expenditures of the currency, and if the EURUSD goes lower (which I am doubting at this point) I'll offset my losses with the increased buying power in October.

Hopefully everyone is keeping their eyes opened as there's gonna be quite a bit of fun for the rest of the week.

[kaalilaatikko]

Hello, everybody,
I just wanted to back my ego about my current status. A few days ago I again opened 3 positions for the ZAR pairs based on VS/AC, this time short, and all of them started to trend in my favour. Today morning I exited them, almost at their lowest values, as I did not want to loose the gains because of the potential impact of the news today. And now all of the profits of these 3 pairs would have been eaten. The best optimised trades for me so far! This makes ZAR the best currency for me so far. Thanks to these, I'm now finally (and hopefully permanently) above BE (account + open positions), 5.5% up this month, 1% total. Not much yet altogether, but better than ever before for me, and the direction is right. And no RTS trades right now. AUD/USD is already on profit as well and heading up.

J.

[dpaterso]

Good (Wednesday) morning everyone!!!

Now it DOES 'make my heart happy' to see that the gains are finally starting to 'roll in' for everyone!!! Well done!!!

Now HOPEFULLY THIS post will serve to INCREASE such gains for everyone!!!

I have been 'toying' with an 'idea' for a good while now and I thought I'd 'throw it out' here for dicussion (note that I've not yet traded this 'idea' but have spent time 'observing' it's possible merit and it sure 'looks good' to me anyway):

As you know I now favour the VS/VSTOPS for obvious reasons (by the way kaalilaatikko: I'm still in USD/ZAR short and even although the price did retrace it's going back down again because Gold is climbing so I'm going to 'see this one through' 'no matter what' TEMPTING as it may be to take profits now).

Now for the 'idea':

As you know the VS/VSTOPS SAR will 'move with' or be 'adjusted' by the ATR. Therefore (as you know): your entry point or SAR could / would move closer or further away from the price depending on the ATR.

Now what about this 'adjustment':

FOR ENTRY ONLY:

Instead of the entry point or SAR being able to 'move' or be 'adjusted' AWAY from the price it is only 'allowed' to move closer and NOT further away.

In other words:

Let's say that you were 'looking to go short'. You'd find your LO SIP and use that date to 'track' the VS/VSTOPS as 'normal'. However: the SAR would ONLY BE 'ALLOWED' TO MOVE IN ONE DIRECTION i.e. as the price moves up in this example the SAR will only be 'allowed' to INCREASE but never DECREASE. The moment you get a close below the SAR in this example you'd then go short (by placing a stop order below the bar that has just closed contrary to the SAR). VERY IMPORTANT TO NOTE that this is for ENTRY ONLY. Once IN THE TRADE you would then use the VS/VSTOPS as 'normal' (or should I say you'd then use the 'standard' VS/VSTOPS) to stay in the trade and / or TP. In addition: you would be using AC for 'confirmation' of the trade (in this case you'd want AC to have 'closed red' and be above the zero line).

Suggestions??? Comments???

[chdorry]

Originally Posted by dpaterso

Good (Wednesday) morning everyone!!!

FOR ENTRY ONLY:

Instead of the entry point or SAR being able to 'move' or be 'adjusted' AWAY from the price it is only 'allowed' to move closer and NOT further away.

In other words:

Let's say that you were 'looking to go short'. You'd find your LO SIP and use that date to 'track' the VS/VSTOPS as 'normal'. However: the SAR would ONLY BE 'ALLOWED' TO MOVE IN ONE DIRECTION i.e. as the price moves up in this example the SAR will only be 'allowed' to INCREASE but never DECREASE. The moment you get a close below the SAR in this example you'd then go short (by placing a stop order below the bar that has just closed contrary to the SAR). VERY IMPORTANT TO NOTE that this is for ENTRY ONLY. Once IN THE TRADE you would then use the VS/VSTOPS as 'normal' (or should I say you'd then use the 'standard' VS/VSTOPS) to stay in the trade and / or TP. In addition: you would be using AC for 'confirmation' of the trade (in this case you'd want AC to have 'closed red' and be above the zero line).

Suggestions??? Comments???

You asked for comments, so I guess there's no surprise I'm responding :-)

Well I'm interested in what or how you're going to fix the VS/VSTOPS SAR value so it doesn't go up (when looking for a long)? Will you make a it a multiple of ATR on the day the chart was set and use that value consistently throughout? Or calculate it daily, but keep track of the "lowest SAR value" while tracking the trade (assuming we're looking for a long position), and if the new SAR would be higher than this, use the original SAR? I think this would help you get into the position closer to the "bottom of the valley" but I'm not sure how this would work on the Delta platform for starters. If you just choose a "fixed" ATR, then I think you'll potentially be worse off if/when the pair gets to the bottom and channels for a bit, as the channeling would most likely lower the ATR, and that would result in an even better entry than a fixed ATR that was based upon a potentially trending market.

Anyway, I'm game for helping/discussing/kicking around ideas about this alteration to the VS system. I'd be interested in some additional detail (or at least ideas) you have for stopping the SAR from backing away from the current price (ie how would this alter the VS calculation or ATR or whatever).