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

[dpaterso]

Well if you're NOT seeing what I'm seeing then you need to look again!!!

[dpaterso]

OK:

From where I sit I reckon we've a day or two to go until 'pumpkin time'!!!

[chdorry]

Originally Posted by dpaterso

OK:

From where I sit I reckon we've a day or two to go until 'pumpkin time'!!!

Still, worst case is you get to rest up this weekend, as its about to get VERY interesting real soon.

[dpaterso]

I agree (therefore I'm gonna get 'pis*sed' tonight i.e. it IS Thursday after all)!!!

Did ANY of you take a look at my 'OHLC Order' thing??? Or is it just Craig, J., and myself that are still around???

[dpaterso]

For those of you who are able to trade CFD's here's a 'hot tip':

Buy Nasdaq 100 at 1816 using a limit order or wait for the price to go below this level and buy with a stop order. Watch margin percentages and position sizing (lots are not cheap BUT every point movement is $1 USD per lot).

This is a demonstration of a buying a 'VSC(1) pullback' which, at the moment, is netting me some very nice profits.

[dpaterso]

Was that a GBP/ZAR price that I just saw 'kissing' a VSC(1) SAR???

[kaalilaatikko]

Dale, I feel a bit stupid now. I saw GBP/ZAR approaching the line a while ago, but besides that maybe I can list GBP/NOK that might look interesting in the near future. But what else? EUR/ZAR has been rather ranging lately, but maybe the signal should be considered (actually I haven't seen a signal yet, am I using wrong parameters perhaps). GBP/NZD is still a bit below the line, but there is some sort of setup forming. USD/ZAR has made a signal to go long, but is there still room for it to rise? Could USD/JPY have started a downtrend? Could you please elaborate the sweetest pending signals of yours a bit more?

I said in the previous mail that the fundamentals should be in place for me. Well, they definitely are not if you count oil among them. I now see that I indeed have had a bit (a lot, actually) too much overweight on energy and heavy industry, and I am getting hit hard now. I haven't closed anything yet (except two financial CFD positions on profit, which was a good move). The first SAR hitting was a false alarm, I had an old indicator in place on that chart. But anyway, I have 12 positions open and all are more or less heavily on red . My account is fine, but these positions keep on diving. VS will tell me to start closing the positions pretty soon. A couple of days ago I saw hope in these, but now I may need to look much longer in the horizon and forget the SAR if I intend to get these on profit. Actually I might be even able to do that, but I need to have a second and third thought first about if it were wise or not.

Hopefully forex comes in rescue soon. I'm putting a bit more funding in my account so that the positions on loss do not prevent me on looking at new, better trades.

I have some confusing feelings at the moment. I'm involved in a project that is approaching deadlines making my working hours a bit longer than I would like to. This keeps me from spending too much time in staring at the charts. If you are trading long-term, that should be only a good thing. But now I am seeing positions going in in much bigger loss in a couple of days than what I was able to make profit in one month. My "8h/day=20%/month, 2h/day=5%/month" calculation reads now "2h/day=-15%/week". What should I conclude from that??

J.

[dpaterso]

Good (Thursday) evening (OK: it's NOT been a 'payday' Thursday but it's STILL been a good day)!!!

First:

GBP/ZAR:

'Approaching' the (SAR) line is NOT good enough i.e. price HAS to CLOSE (in this case) ABOVE the line otherwise it's NOT a signal no matter HOW tempting it may be!!!!

Second:

Have you installed my latest version of the 'indicators' i.e. the one with the 'OHLC Order' 'thing'??? It WILL keep you 'out' of 99% of the 'bad' trades.

Third:

USD/ZAR:

At the current price I'd NOT be comfortable going long no matter whether we're being given a signal or not.

Fourth:

USD/JPY:

The USD is 'tricky' right now in my opinion i.e. I'd be 'loathe' to 'bet against' the USD BUT having said THAT what we're seeing is either a correction OR the USD rally is 'overdone' OR 'not genuine'.

The 'bottom line' of all of this:

You just need to 'sit back' and wait for signals from the VS. If the VS tells you to take a loss (or 'Enron') then do it. DO NOT attempt to 'justify' staying in because 'you feel' that price cannot go lower (or higher) 'than this'. If you have to 'Enron' a postion: BELIEVE me you'll get 'back in' at a better price.

MONEY MANAGEMENT is the 'key'!!!

And: as MUCH as I THOUGHT that there were signals 'on their way' things have turned 'for the better' BELIEVE IT OR NOT. I mean: take a look at GBP/JPY. It's ALSO a 'big payer' and very 'popular' and it has continued it's slide. The (our) VSC(1) has kept us 'out'. BUT: WHEN we get a signal to go long you can be sure that your returns are going to be EVERYTHING you 'dreamed of'!!!

I KNOW I'm saying the same things 'over and over and over again' but really: 'it is what it is'.

Just 'BEAR WITH ME' and watch your money management!!!

Furthermore:

I've said this time and time again:

The WHOLE REASON why these trading systems 'work' is because of the 'no stops'!!!

I KNOW it can take YEARS off of your natural life to trade without stops BUT you just take a look at the threads on this website!!! The stops 'eat away' at your capital. As a matter of fact (and I CANNOT remember who said this) BUT: I remember reading a post that said something along the lines of 'stop losses are for people who do not understand money management'!!!! (I sincerely hope that post was by somebody I like)!!!

HANG IN THERE!!!

GOOD EXAMPLE:

My 'tip' for the Nasdaq today!!!

Of COURSE I'm 'down' on the Nasdaq today. So what??? A year ago I would have 'bailed' the moment I saw a loss of more than $50!!! NOW I know that this is ALL 'BS'!!! If the Nasdaq does NOT turn and rally on Monday or Tuesday next week: I will PERSONALLY come over to wherever in the world you may be and take you out to dinnner AT MY EXPENSE!!! The point is that no matter HOW much I 'swear' by these systems that were developed by 'the old man' there is ONE thing that they DO NOT and CANNOT take into account and that is 'market sentiment' which is MOSTLY fuelled by the likes of Bloomberg and CNBC!!!

If you're using CORRECT money management: you have NOTHING to fear!!!

JUST HANG IN THERE!!!

[kaalilaatikko]

Thanks again for wise words! This current status quo of the markets has already proven me that I can stand also a cold shower. The next lesson is to learn to exit at lows when it is time to do so. VS is saying farewell to two of my positions, so that it will be! I am pretty tempted to do that already today, but the rules tell me to do that only after the close - so tomorrow then. Actually I wouldn't be surprised if I were back at BE in a few days without opening any new positions - and just like a confirmation to this, my account + open positions seem to show 1.5% better figure than half an hour ago.

[dpaterso]

Good (Friday) morning everyone.

Well: we have one or two more signals (GBP/ZAR, EUR/ZAR, EUR/GBP, and GBP/BGN). There ARE more but I'm not interested in them at present. Moreover: these are NOT the 'main' ones I'm waiting for (with the exception of GBP/ZAR that is) e.g. GBP/USD, GBP/JPY, GBP/CAD, GBP/NOK, and EUR/USD (to name BUT A FEW)!!!

Just one thing that I think needs 'a mention':

As you MAY know any and all postions that I open NOW are 'logical' positions and there is a good reason for this:

Let's take EUR/CAD (one of my 'still open' 'test positions'). Now: the trade is going against me at the moment (although I'm nowhere near getting a signal to place an order to SAR or 'Enron' the position as you should be able to see). But let's just say for the sake of argument that the price continues on down and I do eventually get a signal to place a short stop order because price has closed contrary the SAR and that order is executed. Now remember: MY ORIGINAL LONG POSITION is a 'logical' position and my short stop order is ALSO going to be a 'logical' position for the same number of lots as my original position MINUS ONE LOT (don't get this wrong because then you're defeating the object). At this point I've accomplished two things: 1) I've freed up the margin used on the position and 2) any further loss if the price keeps on going against me is based only on ONE lot which of course will be negligable. NOW (and this is where you'll hopefully see the benefit): WHEN I get a signal to go long again I can COMBINE both of these positions into ONE SINGLE POSITION. The PROFIT that I've made as the price has continued on down gets offset against the loss on the long position by doing this. I then add to this newly created position and the difference is that as the price NOW goes in my favour I start making profit (reducing any loss) FROM NOW i.e. I don't FIRST have to get to BE before I start making a profit. THAT'S the benefit. Make sense???

Now just one thing:

Someone asked me the other day if this is possible at ALL other brokers. Now: I cannot speak for ALL other brokers but I CAN tell you this is NOT possible at GCI (my other broker) i.e. it's only possible at Delta. The reason for this is because at Delta you are able to 'dump' lots i.e. reduce the position size to the quivalent of a single lot whereas at GCI the lot sizes are fixed so if you try this at GCI you'll land up in a perfect hedge which is ALWAYS a recipe for disaster.

I hope this makes sense. If in doubt I STRONGLY suggest that you try this on a demo first so that you can see how it works. The REAL object of the exercise is that you never take a loss i.e. if the trade goes against you you put the position 'on hold' as it were UNTIL you get another signal to take the trade in the same direction as before.

(Looking at my EUR/CAD 'test position' while typing this post I MAY JUST get the chance to give you a REAL LIVE DEMONSTRATION of this 'action' in the not too distant future by the looks of things)!!!