Good week so far??? (I find that Friday always comes too quickly don’t you)??? Good week for me (us) although STILL ‘sitting’ on AUD/NZD waiting for it do to SOMETHING!!! ANYTHING!!!
Nick:
You’ve ‘read me right’ i.e. the MOST succesful RT Trades are the ones where you ‘buy the bounce’ off LBOP and ‘sell the bounce’ off HBOP and TP as ‘normal’ per the RT System. That’s exactly what I was saying. This results in BIG profits and because you’re setting TP’s the temptation is NOT there to just TP when you’re emotions tell you to. Remember that you have to adjust your TP’s every day as per the RT System itself.
Now even more interesting is the fact that (as I said earlier) HBOP / LBOP are EXTREME Pivot Levels (R3 and S3 respectively) and the LONGER the timeframe the more reliable these levels are i.e. the ‘firmer’ they ‘hold’. What I’m saying is this: if you (for example) ‘sell the bounce’ off the MONTHLY HBOP believe me you’re in the ‘$$$ seats’. Why? Because I personally have ONLY ONCE seen something trade PAST it’s monthly HBOP. On the other hand: very SELDOM does something trade TO it’s monthly HBOP / LBOP. The shorter the timeframe the LESS likely something is going to ‘hold’ at HBOP / LBOP but having said that these are EXTREME levels and therefore there is a 99% chance that HBOP / LBOP will hold on the weekly timeframe. Do you see what I’m saying. Basically (all other things as per the RT System ‘being equal’) you’re ACTUALLY trading Pivot Points / Levels here the difference being the ‘BOS’ sequencing which makes a HUGE difference AND the fact that the ‘guesswork’ is taken out of the TP point. LESS ‘surer’ trades are then obviously the ‘bounces’ off B1 / S1 and of course they are less profitable if the TP is not hit on the correct ‘BOS’ day and the price turn against you. Again: more ‘sure’ trades: instead of using limit orders (as the RT System ‘dictates’) wait for the price to move THROUGH B1 or S1 by ‘a fair bit’ and then use stop orders instead. You can do this with HBOP / LBOP too if you like. That way if the price does not ‘come back to you’ you’re not in the trade and no harm done. By the way: you used the word ‘hope’ in your post i.e. ‘hope the price goes back into the range’. There’s no ‘hoping’ about it i.e. as long as ADX/ADXR is below 20 (the lower the better) IT ALWAYS DOES (at least 99.999% of the time anyway but not necessarily on the same day)!!!
Boca and Randon:
WHAT are we going to do with the two of you??? You’re BOTH making the ‘BOS’ sequencing more complicated than it needs to be!!! See the attached chart!!! (Please note that I have not ‘labelled’ EVERY possible ‘B’, ‘O’, or ‘S’ day on the chart i.e. there are many more but I just picked out the ‘obvious’ ones for the purposees of a CLEAR explanation)!!! All you’re looking for are SIGNFICANT HIGH POINTS and SIGNIFICANT LOW POINTS and what is a SIGNIFICANT POINT??? Go read!!! Now the only thing I do differently is this (and this should clear up your ‘hit and miss’ ‘issue’ Boca): I will find two previous points (does not matter whether it’s a ‘B’ and an ‘S’ day or both ‘B’ days or both ‘S’ days) and then start my ‘sequencing’ FORWARD. If my ‘new day’ i.e. my ‘forthcoming trading day’ ‘ends up’ having the SAME ‘label’ then I’m good to go. If not i.e. I get a conflicting ‘label’ for my ‘forthcoming trading day’ then I ignore a possible trade. I hope that makes sense!!! Let me put it another way just in case it does not: I will find the LAST TWO SIGNIFICANT POINTS (does not matter whether they are HIGH SIGNIFICANT POINTS or LOW SIGNIFICANT POINTS) and start my ‘sequencing’ from EACH of them TOWARD my ‘forthcoming trading day’. Now let’s say that ‘sequencing’ from EACH of these two previous SIGNIFICANT POINTS my ‘forthcoming trading day’ is designated or ‘labelled’ as an ‘S’ day then I’m going to SELL at S1 if hit. BUT: if my ‘forthcoming trading day’ ‘lands up’ getting a ‘B’ label from my first ‘sequence’ and it ‘lands up’ getting an ‘S’ label from my second ‘sequence’ then I ignore the possible trade. Again in other words: I’m using TWO ‘sequences’ from different SIGNIFICANT POINTS to ‘verify’ the ‘label’ for my ‘forthcoming trading day’. I don’t know of a way to explain it any clearer than that. Of course you could ignore the sequencing altogether and just buy or sell at B1 or S1 BUT there is NO WAY that this is the more reliable way to do it i.e. the ‘BOS’ sequence definitely ‘fine tunes’ the ‘accuracy’ of the system itself.
I have concluded that with the RT System there are MANY ways to use it / trade it / expand on it i.e. it’s ‘versatile’ and allows you to be ‘creative’. The ONLY thing I don’t recommend is trading the ‘Trend Mode’ as I have indicated earlier for the reasons I indicated earlier.
AND the 'good ‘ol’ SI System Trailing Index SAR!!! To simplify it for you: calculate the ASI EXACTLY as per the work sheet in the book. Once you have the ASI then divide it by the QPF (‘Quote Price Factor’) to get the ASI ‘relative’ to the instrument / pair. DO NOT WORRY that it LOOKS too close when plotted!!! Remember: you’re working with FOREX PAIRS NOT COMMODITIES!!! The ‘pricing’ is different. And again: you do not HAVE to use the Trailing Index SAR i.e. you COULD JUST trade the Swing Points. The only problem with that is that if you’re ‘right’ and the trade goes in your favour then ‘good for you’ BUT if you’re ‘wrong’ and the trade goes against you then you COULD ‘land yourself in very hot water’ for the simple reason that SOMETIMES the previous HSP and LSP are MILES away from each other so by the time you stop and reverse whatever profit you MAY have made on the previous trade will be gone AND THEN some!!! Another POSSIBLE way to trade the SI System is to use stops. In other words: if you’re in a long trade AND IN PROFIT ALREADY you set a stop loss at where your Trailing Index SAR SHOULD be and TP at that point i.e. you don’t stop and reverse. Then you just look for a new trade after that. The reason I mention this is because the SI Sytem DOES give many stop and reverse signals and a fair amount of the time a loss will be incurred on the stop and reverse. Again: use your ‘creativity’ and ‘imagination’ and see what works FOR YOU!!! Always bear in mind that ‘the old man’ has ‘given’ us some very SOUND and ROBUST systems and as long as you don’t ‘mess’ with the ‘core’ of the systems then there is no reason to not ‘tweak’ them to find YOUR ‘sweet spot’.
I’m only referring to the system to understand the purpose of BOS. I’ve traded that system but I’m not currently. To start the labeling I just look at the past 3-7 days usually and find the lowest or highest depending on which is more extreem. The lowest I label B and the highest I label S and I go from there.
I see what you were trying to do (which is not much different from what I do or what’s detailed in the book the way I see it). The purpose, however, of the ‘BOS’ ‘sequence’ is detailed in the book i.e. the three-day-up-two-day-down phenomenon (or whatever the exact phrase is that is used in the book i.e. part of the RT System).
Anyway: not a ‘stirling’ week at all i.e. pretty slow actually (and AUD/NZD is STILL giving me a headache BUT I’m confident of ‘my game plan’ and in SPITE of AUD/NZD: things are good nevertheless). I sincerely hope that those of you who got trade signals from me are happy (and if not: patience and self-restraint is ‘key’ so don’t ‘fret’)!!! Next week I DO however believe is going to be a ‘winner’ for sure!!!
Thanks for the ideas on the RT system Dale, I will try to take a close look at it soon. Also, you said that another way to trade the SI is to use the sar points as stops, NOT stop and reverses. This is the way I think I am going to trade it. If I’m in a trade for a while and I’m in profit when I hit the sar, unless the adx/adxr value is good (like over 25 or 30) I’ll probably stay out and wait to see if the price keeps moving in that direction, if it does maybe I’ll jump in after adx gets above 30 or something, or I can watch other pairs for possible entries. With my money management I can have 8 or 9 SI trades open at one time. At the close today, here are my open SI trades.
I also need to place stop orders for several more pairs which went 60 or more points against their ASIs today, I need to update my charts. Overall though, so far so good with the SI, hopefully the three above pairs will continue to go in the right direction, I’m a bit worried about chf/jpy though.
I’m pleased that you appear to be doing well with the SI System and that you also appear to have it ‘under your belt’. Good on you!!!
Just to ‘throw in’ yet ANOTHER idea for you (if you’re going to use stops to lock in profits and TP):
Another ‘sure fire’ way to lock in even greater profits is to place your stops at WHAT THE EQUIVALENT PRICE WOULD BE IF THE ASI MOVED BACK ON ITSELF BY 60 POINTS. In order to do this though you would need to either monitor the ASI in realtime as I can do at Delta OR you need to work out the formula for each pair (it will be different for each pair) i.e. ‘what is the equivalent price movement per ASI point movement’ if that makes sense. Another way of explaining it: ‘what would the price be IF the ASI moved back on itself by 60 points’. This locks in profits far earlier than a stop at the previous HSP or LSP would but then you’d have to come up with a solution to re-enter the trade IF your stop was hit and then the price continued on in the direction it was going in the first place. More and more lately I find myself ‘playing’ a quote by John F. Carter ‘over and over in my head’ that goes something along the lines of ‘entries are a dime-a-dozen but profits are in the exits’ (or something like that). With these systems the part about the entries being ‘a dime-a-dozen’ is most certainly true i.e. on a daily basis I have too many valid entries from ‘the old mans systems’ to cope with i.e. more entries than my money management rules will allow. What’s more: I find more and more (particularly with the SI System) that the major portion of the profit is made in the period immediately following the initial entry and some profits are lost (and losses sometimes incurred) upon the stop and reverse. While this may not be following the system ‘to the letter’ (the SI System is a ‘true reversal’ system) you have to ask yourself sometimes: 'what is more important? ‘Locked in profits’ or being able to say that ‘I’m sticking to the system’??? I have to admit that I do go through ‘phases’ i.e. sometimes I feel that I should be following the systems ‘to the letter’ and other times (obviously when I’m showing what I consider to be an ‘abnormally large profit’ on a position) I find myself being quite proud of myself that I indeed took profit ‘when I did’. Make sense??? Would my profits be greater if I followed each and every trade through to it’s ‘absolute’ conclusion??? Who knows. Am I happy to make % gains like I’m doing now??? Definitely yes. The point is that by following some trades through to their ‘absolute’ conclusion while taking profits early on others is working for me and my % gains are FAR greater than anybody including myself could ever have imagined possible.
Anyway (as I have said before): we have been ‘given’ some excellent, robust, and reliable trading systems by ‘the old man’ but the ‘creative’ possibilities using the trading systems as a base are limited only by your imagination, expereince, and skill. And always remember that ‘at the end of the day’ it’s profit that counts and nothing else matters!!!
Boca:
Are you SURE you’ve ‘got it’ now??? (Only kidding)!!!
By the way: you asked me how I ‘marked up’ that chart. It’s part of Delta’s charting package i.e. the FAR left icon at the bottom of a chart window is the ‘Instruments panel’ and the icon third from the left is the ‘Property grid’. Both of these are used to add / edit ‘markups’ on the charts and I tell you you’ll be amazed at some of the stuff supplied as standard (take a look at the different types of Fibonacci numbers / lines for instance).
(It’s a link to the first page of this thread which is where you should have started reading in the first place).
(It amazes me you know: there’s a new global phenomenon it seems: evidently people read books starting from the end of a book and then work their way backward to the beginning)!!!
Is this a wind up? Come on man, I appreciate that you’re a new poster, but have a look at the first page of the thread. Whilst there, check out the title of the thread.
The RT (Reaction Trend) is a system mentioned in the book of which name happens to be the title of this thread.
Great posts you two!!! Made me ‘cackle’ this morning!!!
Now listen up:
It seems that my ‘creative juices’ are starting to work overtime here!!! I therefore would like to propose an addition to the RT System and would like your opinions thereon (fancy ‘lingo’ for this early on a Sunday morn’)!!! (Yes I DO in fact sometimes dream about this stuff in case you’re wondering)!!!
Right:
I propose to add two new levels to the RT System i.e. S2 and B2.
Explanation:
As I’ve now ‘uncovered’ and posted the RT System levels are actually Pivot Points / Pivot Levels right? Right. So. I now understand the logic as to why this system works so well i.e. essentially you’re ALWAYS buying at B1 on a ‘B’ Day and selling at S1 on an ‘S’ day right? Right. Why does this work? Because 99.999% of the time an instrument WILL trade between Pivot Point / Level S1 and R1 during any given three day period ESPECIALLY when ADX/ADXR < 20 AND as we have now ‘uncovered’ RT System B1 = Pivot Point / Level S1 and RT System S1 = Pivot Point / Level R1. Now (and I was wrong in what I was saying the other day about Pivot Point / Level S3 and Pivot Point / Level R3 i.e. I was saying that these Pivot Points / Levels were commonly referred to as ‘the dead high or dead low of the day’. Turns out I was wrong here i.e. I had another quick read over the chapter on Pivots in John F. Carter’s book last night and it turns out that Pivot Point / Level S2 and Pivot Point / Level R2 are actually considered ‘the dead high or dead low of the day’ AND NOT Pivot Point / Level S3 and Pivot Point / Level R3 THUS making Pivot Point / Level S3 and Pivot Point / Level R3 EVEN MORE EXTREME levels)!!! Making sense so far??? Now what I’m suggesting is this: you buy at B1 on a ‘B’ Day as ‘normal’ and you sell at S1 on an ‘S’ Day as normal BUT you ALSO buy at B2 on a ‘B’ Day and you ALSO sell at S2 on an ‘S’ Day. In other words: if you’re on a ‘B’ Day and you’ve placed your limit order at B1 and it gets executed BUT THEN the price ‘barrels’ through B1 on that day all the way down to B2 you’d have another limit order at B2 which at this point would obvioulsy get executed (and if it ‘barrels’ through B2 to LBOP you’d have yet another limit order at LBOP which at this point would obviously ALSO get executed). Now you’re sitting with three positions on the same pair going long right? Right. Now I KNOW this is violating ONE of the (my) money management rules i.e. to not exceed 1.875% of your (current) capital balance on any single positions / pair / instrument. HOWEVER: this SHOULD be OK as long as you don’t exceed the OTHER portion of the (my) money management rules i.e. the total amount of your capital balance being margined at any one time does not exceed 15% - 22.5% (all the percentages based on an account with 200:1 leverage by the way). Obviously the opposite applies to an ‘S’ Day. Now WHY do I suggest this??? Simple: to increase profitablity and to decrease the possiblity of taking a loss should you have to close out the position at either S1 or B1 as per the RT System at a loss which DOES HAPPEN sometimes IF you’re following the system correctly. In other words (following the RT System ‘to the letter’) you would normally buy at B1 on a ‘B’ Day and then close the position at ‘S1’ on an ‘S’ Day BUT (in this example) if S1 is not hit on the ‘S’ Day OR if it IS hit on the ‘S’ Day sometimes the RT System levels MAY have moved against you (depending on what’s happened to the price since the B1 order was executed) and this would result in a loss (normally) in this instance. HOWEVER: assuming that you now had two or even three positions open i.e. B1, B2, and LBOP as per the above the chances of you closing out the position(s) at a loss are reduced DRAMATICALLY simple because you have three positions open instead of just the one single position. Also: if the price action has moved AWAY and in your favour by the time you’re ready to close out the position at S1 then your profits are DRAMATICALLY increased!!! I hope you’re all with me at this point. Feel free to comment.
Now one last thing:
The RT System works SO well BECAUSE you’re ACTUALLY trading using Pivot Points / Levels which are based SOLELY on price action!!! Having said that: I’ve tried to trade using Pivot Points / Levels with little or no success BUT I have now ALSO discovered WHY this did not work for me. There are two major differences between trading used Pivot Points / Levels and using the RT System. The first difference being the ‘sequencing’ which you would not ordinarily do using Pivot Points / Levels when trading using ONLY them. The second difference being that the RT System gives you a DEFINED exit time and price (level). What I’m saying is that the RT System is Pivot Point / Level trading BUT presented very differently. (And OK: I suppose if the truth be told there IS a third major difference and that is the fact that it’s presented by ‘the old man’ which of course as you know tends to make be ‘biased’ i.e. ANYTHING ‘the old man’ says works for me)!!! In other words: I had very limited success with trading Pivot Points / Levels BUT the RT System presents them in a form that I can understand and are comfortable with using.
For those that agree with me the formula for S2 and B2 would be as follows:
S2 = ( ( H + L + C ) / 3 ) + ( H - L )
B2 = ( ( H + L + C ) / 3 ) - ( H - L )
Last note (further to my ‘chuckle’ comment above):
OK so maybe I came down a bit hard on the guy yestderday BUT you know what I’ve realised: people that are serious about LEARNING to trade will always start a thread AT THE BEGINNING and people who are just here ‘to make a quick buck’ because they’ve heard how easy it is (LOL!!!) will always go to the LAST PAGE of a thread. Have you noticed that??? I used to do it so I know!!!
I know this is going to be a rather ‘strange’ post to some of you and I have been thinking very deeply about posting this here since yesterday but I feel I need to (maybe is ‘absolution’ I’m seeking by posting this. I’m not sure).
Between Thursday night and early Friday morning my Rottweiler bi*ch gave birth to ten perfect little pedigree Rottweiler puppies sired by my champion Rottweiler of the Von Sophias pedigree (some of you already know about this of course). It was her very first litter so everyone was very excited of course. Because she had so many puppies I was advised to assist her in bottle feeding them for about a week. Yesterday morning (Saturday) my eight year old son kept asking me to go out and move the puppies and feed them BUT being the ‘obsessive compulsive trader’ that I have become I kept on saying to him that I was ‘busy’ and that I would ‘be there in a minute’. I was not doing anything really important other than ‘obsessively’ going through the charts and my trades for the past week. I could have done this at ANY time before the open on Sunday night (tomorrow night). But: as I usually do EVERY day ALL day I sat here practically the whole day ‘pondering’ my moves for the coming week and striking up conversations with anybody who was interested in trading on Yahoo Messenger. FINALLY I shut everything down and went to go and check on the puppies and feed them. By the time I did this one of the puppies was dead (the mother had suffocated the puppy by lying on him accidentally). The puppy was still warm when I got there. Was this just ‘natures way’??? Maybe. I believe however that had I only got there an hour or two earlier that puppy would still be alive right now. I believe that had I not put this business and my obsession with it ‘above all else’ that puppy would be alive right now.
Now there is a message in the above from me:
It’s REAL REAL easy to become obsessed with this business and put it ‘above all else’ which is exactly what I did yesterday and it had what I consider to be a very sad result.
Be careful that you don’t let this business cost you MORE than money!!!
(I’m not looking for condolences or an in depth explanation of how nature works or anything else here by the way. I just needed to post this and share my thoughts because I feel so very strongly about what I allowed to happen).
Edit (15/05/2008):
Oh well. Lost another one today and this (thankfully) WAS INDEED ‘natures way’ i.e. the puppy could not / would not feed properly. We took her to the vet two days ago where she stayed and was tube fed but still could just not pull through!!!
Edit (18/05/2008):
Well: another one gone. Took ALL the dogs to the vet and apparantely it’s ‘just one of those things’ i.e. ‘natures way’. All the other dogs check out 100% (including the parents) and we’re told that there is nothing to worry about. As a matter of fact: in nature i.e. no ‘human intervention’ dogs can lost up to 50% of the litter or more apparantely. All of this another ‘learning curve’ for me!!!
Judging by the number of posts that appear over a weekend it’s gratifying to know that I’m probably the only ‘obesessive compulsive trader’ here which is good!!! It means that I don’t have to worry about you lot!!!
I hope you all have a very successful week (and I hope your trading goes well too)!!!
Dale-
I understand where you’re coming from. Don’t beat yourself up too much. Your obsession is whats paying the bills. Growing up we’ve had puppies die the same way. Takes alot less than 2 hours to die when you have no oxygen;) . I remember one year we had this puppy that would freeze up on us. We would be holding him trying to keep him warm and he’d stiffen up like a dead cow. We revived it a few times and tried to keep him alive but he just was too weak and we lost him.
I appreciate the thought and the post. It was a bit of a ‘wake up call’ for me though i.e. before this happened I was actually commenting to someone the other day that the last eighteen month to two years or whatever i.e. since I started trading (or at least started TRYING to trade) are simply a ‘blur’. Things that I thought happened just last year actually happened over eighteen months ago!!! But then: to be honest I suppose I’m just being ‘me’ i.e. never been any ‘half measures’ in my life!!!
(I’ll tell you one thing: I’m now already dreading the day I have to part with (most) of them man ESPECIALLY now that I’m bottle feeding them. Even at THIS stage they SEEM to have their own personalities)!!!
