Now that is REALLY interesting. I hadn’t actually thought about it in that way. In my state of “oh how did I get that all wrong”, I hadn’t thought it might be changing direction.
Yes absolutely. Adam does say it takes a lot to change a trend, but, maybe that chinese news is a big enough factor.
Now we have to wait and see what happens over the next few days. Wil the uptrend continue, or have we turned a corner
Hey Jedster.
Don’t get me wrong. I was reading my post to you and at first glance it may appear sort of, well, ‘rude’. Not my intention at all. What I’m saying here is that TOGETHER (and any others following this thread) we’re ALL still learning this ‘technique’. At SOME point ‘the penny will drop’ because frankly I WANT this to work.
And just to mention (about the stops): that’s at least ONE thing I got from Adam Theory (the book I mean) i.e. the way to add to positions (which I’d never thought about before). Adding one unit or lot (or whatever) LESS than your ‘opener’. It just makes such logical sense. I’ve always added to positions in equal amounts. Not that there’s much wrong with that (as long as profit WILL be locked in EVEN AFTER you’ve added to a position because you’ve now moved your stop). Wilder’s method just make better sense to me than my method. One thing I’ve NEVER agreed with is scaling INTO positions. That’s ridiculous. Scaling out??? GREAT idea. But scaling in??? Nah. NEVER seen it work in practise. And if you really think about it: Wilder’s method described in Adam Theory is ACTUALLY ‘the best of both worlds’. Although it doesn’t make sense: using his method you’re scaling in (adding) to a position while at the same time scaling out!!! There’s a conundrum for you!!! LOL!!!
And one other thing I’ve only learnt in the past few months (OBVIOUS stuff but I need to read / see / hear it from somebody else for some reason). R Carter (who has been keeping his distance for some time now noted this: START with ONE position or trade. ONLY ONCE you have a stop that is locking in profit on this first trade THEN open your next trade (and so on and so forth). The reason??? Let’s say that you have $1 000 in capital. Alright: you open each trade not risking more than, say, 2% of your account PER TRADE. SO far no problem. But at THAT POINT IN TIME you have NO idea what’s going to happen with those trades. Some may get stopped out at a loss. NOW all of a sudden: the risk on the other trades that are still open is no longer 2% but has increased per trade in direct proportion to losses on the trades that have just been stopped out (obviously you’re now trading with less capital). Something so LOGICAL and yet something that only somebody with his type of experience would know or have thought of.
The point is: I don’t think you EVER stop learning in this business. And maybe, aside from the money, that’s what makes it such a great business to be in.
Regards,
Dale.
Don’t worry, I didn’t take offense, I knew what you were trying to say…
Now that I like. That makes absolute sense. It means, once you are in profit, you never actually lose even if you take “more risk” and add to your position.
On an unrelated, but related matter (huh?), I just picked up my copy of New concepts in technical trading. What a fantastic looking book. I think I need to go and find a beige pair of flairs to put on while reading it…
Now I intend to read it all, but are there any systems that immediately recomended? I seem to remember the swing index system, or something…?
ROFLMFAO!!! LOL!!! Yeh: it does give you that feeling huh!!! But HONESTLY: I believe THAT is the reason Wilder’s stuff has ‘stood the test of time’. I don’t know if you’ll agree with me or feel the same way about it as me but I really do marvel at just the (his) LOGIC and THOUGHT processes.
In my opinion (and based on my own trading): there’s no system to beat his Swing Index System (well: it sure is the ‘right’ system FOR ME anyway). It’s like my ‘failsafe’. I trade one or two other systems presented on my forums but I consider those trades more of the ‘opportunistic’ type of trades i.e. I know that there’s an EXTREMELY high probability that they’re going to result in losses BUT when they’re RIGHT well, then, you couldn’t get in any closer to the beginning of a big move even if you KNEW what was going to happen TOMORROW. So they’re worth the risk. But the Swing Index System (as you’ll see) is not TOO FAR DIFFERENT from Adam Theory when it comes to moving stops and ENTERING (although as I’ve noted I do break the ENTRY rules because as I’ve noted it makes no sense to me why the ENTRY should be any different to a stop and reverse once you’re in a trade but that’s just me and could very well be the reason why I get whipsawed more often than is necessary).
If I had to rate the systems in that book I would rate them as follows:
1 - Swing Index System
2 - Volatility System
3 - Directional Movement System
4 - Parabolic Time/Price System
The rest: I’ve had very mixed success with BUT let me say THIS that I’ve never really given them TOO much of a ‘fighting chance’ i.e. I’ve traded them, taken a loss or two or three consecutively, and then found myself right back with the Swing Index System. So I have to be fair here when I say I’m in no position to really comment on them but I AM willing to bet that given the same input and time and effort as I’ve afforded the Swing Index System they’d also be just as profitable.
One chapter I know you’re going to LOVE is the chapter on RSI. Just read that for starters for fun. That and the Directional Movement System (ADX). VERY quickly you’ll read things that will explain WHY I keep saying that 99% of people who use RSI or ADX don’t have a CLUE as to what they’re ACTUALLY telling you and how they’re ACTUALLY supposed to be used. Just the chapter on the CORRECT use of RSI is worth the cost of the book on one trade!!! And that’s not even a trading system i.e. just an explanation of RSI and its origin and purpose.
And, of course, as mentioned (as you say ODDLY ENOUGH mentioned by me just TODAY). the chapter on the Commodity Selection Index.
I’ve a feeling you’re going to find in that book what I found too.
Off the topic (well not REALLY I suppose): I’m busy compiling a thread that details from start to finish how I trade the Swing Index System (not that I’m getting anywhere FAST with it but I HOPE to be able to complete it this weekend).
Anyway: if NOTHING else you will hold in your hands not only a piece of history but sheer brilliance!!!
Enjoy.
Regards,
Dale.
P.S. There are SOME errors in his worksheets although as somebody pointed out to me the other at least two of those errors are not actually errors i.e. it’s just his handwriting that confuses you and may cause you to input the WRONG figures into a worksheet if / when testing if that’s what you’re going to do. On the thread below, after the first post, there is a list of what I THOUGHT to be errors. Some MAY be errors while some may NOT be errors (as has been pointed out to me since my starting the thread some years ago). Just bear that in mind is all. Put it this way: WHEN IN DOUBT take a magnifying glass under some bright light and make sure you’re not misreading his figures because of his handwriting.
Edit:
I noticed on my ORIGINAL thread (above) that I had a link to an interview with ‘the old man’ and was surprised to find that after all these years it still worked so I decided to convert it to an Adobe .PDF file to keep for posterity (just in case the link was someday removed). I’ve attached the .PDF here. Read through the interview for more INVALUABLE insights (and get to know with whom you’re dealing with).
Technical Analyst and Trader J. Welles Wilder Interview - Traders Log.pdf (139 KB)
That’s for the details. Yes, absolutely, I mainly got the book for the insight into the ADX (there is someting I like about the ADX, but can’t put my finger on it) and RSI. The rest I see as a bonus.
So, apologies to everyone for digressing this Adam thread, I’ll get reading…
Hello Everyone,
I have stayed away from the thread this week for a purpose & that purpose was to stay focused on what the indicator was doing & not view what others had to say about their results. The reason for this was hopefully I would not be influenced by the results of others & form my own views. Initially I set the indicator on three pairs, but decided to focus only on the Eur/USD pair as I am trading it anyway. Now as for the settings of the indicator, I used to default of 100 bars & the default colors as well. I did not take any trades this week, but did print the charts as they progressed along. BTW…time frames used was the 15M & the 1H with the sames defaults for both chart. The rules as stated in the book were followed. I only did a second reflection as the rules dictate. My views of what I observed are below.
Probably the better time frame would be 1H & Daily, but the 15M can be used for quick in & out trades. On this time frame I observed several opportunities that produced profits.
The indicator is doing what Jedster designed it to do, but at times it just seems way off in its plotting, but that is to be expected. How can the indicator account for news that changes the direction? I don’t think it or any indicator can. On the 15M time frame I observed the price movement move far away from the second reflection, then several hours later be back on course with the indicators directions.
Can we trade this using the indicators second reflection? I think YES, but the stops need to be wide & use at least 100 bars for the second reflection plotting. There were times that even a 50 pip stop would be no good & even 100 might not be enough. More screen time would reveal the answer to that…for me one week is not enough.
Now for my views on the indicator…Jedster has great coding skills NO DOUBT & the indicator is doing its thing according to how it is coded, but the indicator is looking at the past 100 bars, or whatever you use & what happened news wise during the time it took those 100 or so bars to plot is for sure history, but will that same history happen again actually as it did in the previous bars? I don’t think so. How can the indicator account for that? History will repeat itself, but there will be variations. Maybe I am making to much out of this & I would like everyone’s views on this. I am probably wrong. Maybe the shorter time frames would be better…say Daily down to the 15M. I am just not sure.
Final thoughts…I am just not sure about this, but will follow along on the same pair next week & see what the outcome is. The indicator is for sure a great plus to plotting The Adam Theory, but it can only go by what it sees in the past & the past will not always repeat in the exact same manner. The news going forward will always be different & to me that could be a problem. The solution…maybe shorter time frames. One thing is for sure & that is the rules stated in Adam should apply to whatever method we are trading. The Adam Theory of Market is a theory for following the trend & getting in the trade once the move is underway. It is not designed to pick or attempt to pick TOPS & BOTTOMS, but for taking out the middle of the move.
Jedster…thanks for a job well done in the coding of the indicator & sharing your views.
Dale…thank your for sharing Adam & all the other info you share about Wilder. Next week I am going to purchase his New Concepts in Technical Analysis book.
Now I will read everyone’s views on what they saw last week. Have a good week everyone.
Hello AceTrader.
I just thought I’d let you know that your great post has been read and noted.
I’m not going to comment too much now i.e. I’m trying to FINALLY complete SOME documentation for my forums before tomorrow morning (it’s tough going let me tell ya)!!! LOL!!!
From a QUICK read though: you’ve have indeed brought up something that I’ve also had an issue with and that is spikes in price caused by news data releases. The ‘odds’ of the same spike being projected on a Second Reflection Chart are WHAT would you say??? LESS THAN ZERO in my opinion (but I’ll tell you this: if it DOES happen that way I’ll fall off my chair for sure)!!! LOL!!! That’s ONE of the reasons why I was suggesting forgetting about historical data and start from the ‘NOW’ moment. If you take a look at the Gold and Silver charts: already there’s a problem (with those two HUGE spikes). I just don’t see it happening. If you start from the ‘NOW’ moment then sure: the probability of your first few trades being losers are probably higher. But at least you’re moving FORWARD from the ‘NOW’ moment. That’s where I was coming from in that post on the subject of starting at the ‘NOW’ moment.
But as soon as I’m done with what I’ve been TRYING to get done for at least a month or two now: then we’ll get down to some ‘nitty gritty’ here again. I’m still going to solve Adam for EUR/JPY and see what happens though. The Dow (and the other indices) did a nice little ‘tank’ on Friday and thus far, today, I’ve not heard anything about the Greeks having reached an ‘accord’ (and even if they do: the ‘general consensus’ is that they’re ‘done for’ ANYWAY insofar as the EURO is concerned and all manner of other things can ‘kick in’ which could send the stock market and EUR/??? pairs DEEP down into the sea)!!! LOL!!!
But thanks for posting. I do believe in this Adam Theory. If Wilder did: that’s good enough for me.
Regards,
Dale.
Dale,
Thank you for your views & I agree with you on the Greece situation. We could very well see E/$ sub 1.3100 or 1.2900 very shortly. Maybe before this next week ends. The rain on the Adam Theory for me is what I stated about the past news cannot be figured into the future as news is a constant evolving situation. No two days are the same. What you are saying about the “Now Moment” is how I am looking at the theory as well. I just don’t have an answer for this, but over next week I am going to investigate watching what happens. The big stops would compensate, but I am not keen on that. I feel like you do about Wilder & his methods. The Delta Phenomenon has my interest, but I just cannot justify the cost of the software & without it you would be lost. Had a PM from a trader today who tried to solve it with his on coding skills & he gave up as he just could not put it together. Anyway that all I got for now. I wish you much success on what you are working on.
Ace, Dale,
My take on how the projection works, and how the news might or might not relate, is this.
The reflection is only relevent to decide whether to take you into a trade or not. Once that decision has been taken (and lets say you do take the trade), you no longer need the reflection, (well, not until the next reflection needs to be done). We have some rules that say when to do the 2nd reflection and how to consider entering the trades. Once the decision is taken, you only need to go through it again when the next situation occurs…
Also, the reflection is really only relevant for a small number of bars (maybe 10-40). Whilst we can project a long way into the future, I don’t think it is really supposed to be done like that. It is really for use only until the next projection would need to be done. Originally I had the default set at 25 bars. I then changed it to 50, and 50 is what I still use most often, however I did like to project 100-200 bars into the future. However having done it quite a bit now, I think doing that many bars it is just silly. Sure, it looks good, but Adam isn’t trying to predict 4 months, it is just trying to give you an approximate idea of how big swings will be, and when they might retrace.
With regards to the news, if you are looking on the daily chart (and maybe the 4H), I don’t think it makes the slightest bit of difference. If the market moves 50 pips on the back of a news item, that is just lost in the daily chart so isn’t worth considering.Your stop should be way bigger than this anyway.
If looking at a lower timeframe then it becomes more relevent because obviously a projection right after a big news candle will go and project another big candle, and that doesn’t actually happen very often. However, I think of it this way. If the market wants to move in a particular direction, it needs something to push it in that direction. Some kind of catalyst is required. That might be a news item, or a speech from a central bank, or what ever.
If the market wants to go up, it needs that catalyst. If the market doesn’t want to move up, then you might get a muted reaction, maybe a spike, but then the market stays where it is. Point is, the news item really only gets things going. If that is what causes the break out, you do a projection and if the projection looks good, you take the trade. You don’t worry about whether it is only a temporary move because of the news, you just look at the facts at that moment, and then jump on the train…
Jedster,
Wow, very well stated & I agree with all paragraphs. That makes everything much clearer. This week I am going to hang with the 15M time frame at 35 bars on the indicator & see what it looks like. I think you really do have a strong grip on the Adam Theory & how to use it with the indicator. When you think about what the rules say about when to do a second reflection it make more sense. I am probably trying to make this harder than it really is.
Maybe after this you should try to crack the Delta Phenomenon. I believe you just might be able to do it.
Good morning.
Great insight and thoughts too. I thank you (and I speak for everyone else trying to follow this thread too I’m sure).
Again: not too much to add at this time i.e. I need to complete this documentation that I’m busy with and when done I’d like to really sit back and read and digest both your’s and AceTrader’s recent posts as there’s a lot of good points made and they certainly deserve more than a ‘cursory look through’.
That doesn’t mean that never stop thinking about Adam. Believe it nor not: while lying in bed last night, having my last cigarette before going to sleep, and after spending the whole day yesterday on this documentation that I’m busy with (so my my mind was a bit 'fried), Adam ‘popped into my head’ for no good reason. And I thought: well maybe one CANNOT just ignore ALL the historical data. And then I thought: ever single other trading system of Wilder’s either uses a 7- or a 14-day period (mostly a 14-day period). So why not use either of THOSE as ‘defaults’ is the thought that I had. I think I’ve mentioned somewhere before: those periods of not just ‘thumb suck’ periods i.e. 7-days is a week and (obviously) 14-days is two weeks, or a half a month, or more precisely half a ‘trading cycle’ (if memory serves me correctly something along these line appears in ‘New Concepts In Technical Trading Systems’ in one of those little obscure ‘golden nugget sentences’ that are very easy to miss or not take cognisance of). What’s more: Wilder has always had the belief that weekends ‘count’ (this is even explicitly noted in The Delta Phenomenon).
Anyway: not sure what you think of the above. From just remembering what my Gold and Silver charts look like that would certainly change the Second Reflection Charts that I solved AND would have ensured that had I been trading Adam I would have gotten into the long trades that I was looking at much earlier.
What do you think???
As I said: unfortunately I’m one of those people who has to ‘base’ ONE thing on SOMETHING (ANYTHING) else. I don’t like the ‘how long is a piece of string’ methodology!!! You know: how many bars to look back??? 2, 5, 100, 5 000??? A Fibo Sequence??? See what I’m getting at.
Anyway: while I’m typing FURIOUSLY away I’ll obviously get ‘Instant Email Notifications’ of any updates and check for comments.
But thanks again to you both.
Regards.
Dale.
Hello again.
I was going to include this in my post above but was worried that then my post above would be skipped over.
Not to complicate matters by introducing another system with Adam but as you noted: it’s the ‘do I want the trade’ thing that’s possibly also my problem here. Well here’s the thing: with the Swing Index System there’s no question as to whether I ‘want the trade’ or not. If there’s a signal I take the trade. Now if you look very carefully and STRICTLY adhere to the ENTRY rules of the Swing Index System: tell me what you see??? STRICTLY speaking a Swing Index System ENTRY is signalled when a) the ASI make a new high and b) when price has exceeded and closed above a previous VALID HSP (‘High Swing Point’) (and of course the opposite for a short ENTRY). What I’m saying is: use the Swing Index System ENTRY point rules for an Adam trade and then forget about the Swing Index System and just keep going with Adam until stopped out??? Ironically: this is the exact same thing as with Parabolic SAR (which is why I ‘bang on’ about people not understanding Parabolic SAR). Just take a look at the chart on page 12 (Fig. 2.2) in ‘New Concepts In Technical Trading Systems’) and see where Wilder takes the long Parabolic SAR trade!!! It’s most CERTAINLY NOT when the first Parabolic SAR ‘dot’ appears!!!
Regards,
Dale.
Dale,
Good morning. I see you mention Swing Index system & was thingking, do you have that system automated into an indicator, or are you doing it the manual way? From the quick scan I did of the Swing Index System it appeared it might be somewhat difficult to understand & automate, but like I said it was a very quick scan as I was drilling in on Adam Theory at the time & was focused on that. Can the Swing Index System be automated? Of all of Wilder systems, which do see as the least complex & it still works in today trading enviroment? Thanks for your response.
Hello.
You don’t HONESTLY think that I trade the Swing Index System using an Excel Worksheet??? LOL!!! I mean: I’m a hard worker but that would be pushing it even for ME!!! LOL!!!
Of COURSE there’s an indicator for it: on my forums!!! LOL!!!
But no: it’s not a SIMPLE system to trade and there are a few little ‘tips and tricks’ to be noted (which are also detailed on my forums and still more to come). Basically (and as with any trading book): the examples given are ‘picture perfect cherry picked’. In the REAL world: sometimes the signals are not QUITE as clear but that’s what me and my forums are for!!!
Didn’t I ‘rate’ Wilder’s systems somewhere earlier on in this thread (or was it on my forums)??? No matter: the Swing Index System in my MAIN trading system and my ‘failsafe’. The other trading systems that I use are more for, what I deem to be, ‘opportunistic’ trades. In other words: I’m constantly looking for signals on instruments starting with the Turtle Soup Systems, then the RSI Rollercoaster, and if they don’t ‘catch a move’ well, then, the Swing Index ‘kicks in’. The reason: the Turtle Soup Systems and the RSI Rollercoaster will get you in VERY early (YES: top or bottom picking). But the Swing Index System (much like Adam Theory) only gives you a signal when the market APPEARS to ACTUALLY have started moving. It’s inherent problem are whipsaws. On the daily time frame and longer: negligible. But anything under the 1-hour time frame: ‘suicide’. Simple as that.
Anyway: it’s this VERY documentation that I’m FEVERISHLY trying to complete i.e. the documentation for my Indicator Packages for Delta Trading and Deltastock MetaTrader 4. From that point: I can relax, do some live on-line training sessions, and turn my attention back to Adam Theory.
Regards,
Dale.
Wow, lots to read and digest…
Ace, I think the 15M chart is really hard to work with. That said, as I flick through some 15M charts, inspired by your, um, bravery 
I can see where it might work. As I “flicked”, I stumbled onto the USDCAD and the 15M chart is trying to break through support at the 0.9975 level. That could be a good point if broken, but, this is definitely not revealed on the 1H or 4H chart. On the 1H chart you can see the support, but can’t see the opportunity with Adam because there is too much congestion on the last few days. By switching to the 15M chart, all we see is an up trend, then a peak, and then a down trend, so, nice…
Dale, this is exactly where trying to quantify limits, history, etc, isn’t really possible. I just can’t explain it (well, I am trying to…). But, on the USDCAD, there is nothing on the Daily, 4H or 1H, but the 15M is definitely lining up a trade based on Adam… Well, I say definitely, I mean maybe…
I think it sounds like you are struggling to let go of the other systems you have in your mind, when you are looking at Adam, and that is why you are always trying to define things with specific limits, or targets, or whatever. But, if you re-read the beginning part of the book, I am sure that the whole point is, none of that is actually necessary. You did say earlier that you are struggling to surrender and it does sound like that is what is going on. “All you need to do” (easier said than done) is put those other ideas and strategies aside when considering Adam…
On a slight asside, having just read most of “New Concepts”, and again Dale you did mention this in an earlier post, my first direction is to head off to calculate the Commodity Selection Index. Whilst it appears simple enough, I’m having some issues relating/applying it through MT4, so I might start a thread just on the CSI.
That said, purely from just reading the book, already it looks to me like the swing system would indeed get you in at exactly the same points as Adam. My first thoughts were to create an indicator for MT4 to show the SI and ASI. Not a full blown EA to trade it automatically, but certainly something that shows you the index. I do tend to prefer to trust my own work, then I know if it is right (or I know where short cuts have been taken), instead of using indicators that other people have written, however, if you have an indicator already, I might pop over and have a look…
As long as we all keep posting what is, or is not working, and the ideas that we have, we WILL collectively get through this and start to work well with Adam…
Jedster,
The 15M would be difficult in the long run, but I have seen some nice quick in & out trades on several pairs, but would it be really worth the effort? Probably not. Along with the 15M I think I’ll load up the indicator on the 1H to see how it looks.
You are correct, we just need to keep our focus on Adam, sharing our views & see what shakes out from it. The overall rules for Adam really apply across all market. Look to the now moment, done chase the price, just onh board when the move is underway & done try & pick tops & bottoms. All solid rules.
Dale,
I like your style of saying whats on your mind & maybe I was trying to give you too much credit, but at time your limits seem endless. I think Jedster is correct when he said you can’t let go of the Swing Index & I am guilty of the same thing as I am constantly trying mix what I do with Adams & it works to some degree, but for the most part it does not. When you are finished with your project maybe that will free up some of your time.
For now, I will keep following Adam on the 15M & 1H to see how it goes over the next few weeks.
Hello (posted after AceTrader’s post but in response to Jedster’s last post i.e. overtyping each other).
Some quick points (as they come to me i.e. in no specific order):
Remember: I only started this thread to draw attention to the content of the book and NOT to promote Adam Theory as a trading system in and of itself. I’m still of the opinion that the NON-Adam specific information in the book is worth more than Adam Theory itself. At this stage anyway. If a new trader simply adheres to those ten rules of trading: they cannot fail (assuming a half-decent trading system of course).
Bearing in mind the above: I cannot ‘surrender’ to Adam Theory or anything else that is as yet untested and not yet been proved to outperform the trading systems (particularly the Swing Index System) that I trade profitably with. I use ‘the perfect bundle’ or combination of trading systems FOR ME (the three noted). What I’m saying is that it’s going to be a long time, if ever, that I adopt Adam Theory as my one and only trading system. At best and for me at THIS point: I see it as POSSIBLY being a filter for the Swing Index System (for that matter for any of the three trading systems noted). So as much as I WANT Adam Theory to be accurate (I suppose just so that I can say that once again Wilder was ‘on the mark’): it’s not that I’m looking for a new trading system. It’s important to note that when reading any of my posts on Adam Theory is all I’m saying.
The Swing Index System and any of the other systems or indicators detailed in ‘New Concepts In Technical Trading Systems’ I have no intention of discussing here (although there are two LONG threads here based on those very same trading systems but a lot of things have changed since those threads were active not least of which being ME, my understanding of the trading systems, and the work that I’ve put into the indicators, not to mention the EXTENSIVE PAPER TRADING of those trading systems). What I’m saying is that my forums are, let’s say, the ‘Second Edition’ of the information posted here. As I’ve noted too many time: Wilder was a commodities only trader. It just so happens that those trading systems work equally as well on equities. My ‘jury’ is still ‘out’ as to whether or not they will be profitable trading Spot FOREX. It’s just a reality that equities and commodities ‘move’ differently from Spot FOREX. That’s a ‘given’ or a ‘certainty’. And I’m not going to promote trading systems or trading methodologies under false pretences. I know those trading systems to be profitable trading equities and commodities and those that wish to make money trading: that’s the best that I can offer them. If they decide to use those trading systems to trade Spot FOREX: I wish them all the success in the world. I really do. But I’m not ‘putting my name’ to it is all. I’ll aid and assist to the best of my ability no matter what market a trader decides to trade. But I guess what I’m saying is: if a trader trades Spot FOREX using those trading systems and they are NOT profitable then ‘don’t come crying’ is all I’m saying.
Regarding the Swing Index System indicator: I’d actually like for you to code your own and see how it compares and there’s a very good reason for my saying that (which I’ll explain to you once you’re done assuming that yours differs from mine). Put another way: I stake my LIFE on the fact that mine is the ONLY correct Swing Index System Indicator that is correct. Here’s a hint though: remember that you’re looking at the SWING INDEX SYSTEM NOT JUST at the ASI (or an ASI indicator). BIG difference. But I know you have the capability to ‘knock up’ an indicator so I’m keen to see what you end up with (your interpretation I mean).
Regarding the CSI: another hint. You don’t REALLY have to go to all that trouble. If you’re not worried about how much margin is being tied up on a trade or about commissions or about spreads etc. then the ‘shortcut’ is simply to multiply the ATR(14) (or whatever period you wish) by the $ value per point (pip) movement. In your case (Spot FOREX): the ‘highest score’ would be the pair to trade (and this actually is system INDEPENDENT). A fine example (as I noted on another thread): a pair like USD/ZAR vs. EUR/USD. USD/ZAR will almost always have a FANTASTIC ATR(14) value when compared to EUR/USD. The catch??? Lot size for lot size: the $ value per pip movement on USD/ZAR is WAY less than the $ value per pip movement of EUR/USD. That’s why I tend to scoff at threads that say ‘this system is good for +10 000 pips per month’. Tell me that ‘this system is good for +10 000 EUR/USD pips per month’ and you’ve got my interest. But tell me that ‘this system is good for +10 000 GBP/ZAR or USD/RUB (for want of two alternatives)’ and it means nothing. See my point??? In other words: you HAVE to compare apples with apples or pears with pears. Anyway: that’s a CSI ‘shortcut’ for you to consider.
My apologies if it appears I’m ‘raining on the parade’ or being negative or wanting to ‘put the brakes on’. But you do need to know where I’m ‘at’ when reading my posts on this topic. The last thing I want anyone doing is ‘adopting’ Adam Theory because it APPEARS to be a TYPE of ‘Holy Grail’ and end up losing their money. I’ve told ya all: it’s WAY easier to help EXISTING clients increase their account balances and trade sizes than it is to find NEW clients!!! LOL!!! (Actually: there’s nothing funny about that statement i.e. it’s very true and it’s the way I ‘operate’ anyway).
Regards,
Dale.
Fair point. Definitely those rules are a good basis for any trading system…
ok, understood. I don’t think I would be ready to trade this live until it had generated sensible results over the course of time. I also think that what we are doing IS testing the water and trying the system, isn’t it? Granted, if you have a profitable system, then the only reason to change would be if it was more profitible, or less risky.
I don’t think anyone would hold you responsible, well, I wouldn’t. Understanding how a system works is VERY important as only then can you know how to apply it. As an example, I have S&P and Gold and Forex. I always compare the three to see how they perform because I would expect them to move differently.
Now, there is a gauntlet if ever I’ve seen one…
Now that is an interesting point. I was aware of the reason for including margin, etc. However, I wanted to “do it properly”. It hadn’t occurred that I could leave that margin stuff out and the index would still be relative and indicative of the overall volatility, and a good measure of which to trade. That should save some time…thanks.
It is a public forum, people are there to voice their opinions. I wouldn’t dream of trading (or acting in anyway) on the information of others, unless I had checked it out sufficiently myself. There is no such thing as a holy grail and I don’t think Adam is that. What I do think it is, is a methodogy which, if it suits that person, should work well for them if thay can learn how to apply it…
Right, I’ve got another indicator to code up, on top of everything else… 
LOL!!!
For somebody that could just ‘knock up’ an Adam Indicator it should be a breeze!!! LOL!!!
And it’s by no means meant to be a challenge either. I’m really keen to see what YOU come up with and WHY because I know that you have the required experience and knowledge and understanding. Alright: it took me an age to ‘perfect’. First: it took me a LONG time realise that for various reasons one has to ‘trap’ for EVERY POSSIBLE mathematical ‘error’ that MAY occur and that would invalidate the ASI values. Second: I’m NO MQL4 programmer (the only reason I ‘jumped in’ was to ‘get with the program’ as it were i.e. ‘everybody and his dog’ seems to ‘feel the need’ to trade with MetaTrader so really it was a question of ‘if you cannot fight them then you may as well join them’ type of thing). Third: there are DOZENS of ASI indicators floating around. But they’re WRONG (in the context of the Swing Index System). Now while one may THINK that an ASI is an ASI I THINK you’re going to be surprised!!! LOL!!!
All I’m saying is: I’m really not trying to ‘take the pi*s’ with you. It’s just yet another one of those ‘nuggets’ (in much the same way as RSI is INCORRECTLY used and I’m sure by now YOU know what I’m talking about)!!! LOL!!!
Regards,
Dale.
Dale,
Again with your last post & I think the second paragraph about the Swing Index, you put as plain as you could & I understand your point. What works on stock & commodities sometimes just will not work on forex. For me if I am doing stock for the most part I will be a long term investor, NOT TRADER. If I was doing commodities I would favor the short term way & the same for forex. At this point in time the most I will do is take a look at the Swing Index as your interest seems to be keen on it, but for now Adam is at the front. When I look at a new method or system, I first look at how simple it is, can it be explaned in one paragraph? Over the yrs for me I have found the KIS is the best way to go. The more complex, the more potential for problems. These are just my views & nothing more.