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

Trading Systems Free Forex Trading Systems
1087

Dale, All,

Yet again, I apologize for my lack of posts over the last few weeks.

Once again dale your sheer dedication to the cause is outstanding despite the fact that you were getting chopped up as you said. You deserve all the plaudits that come your way for the time and effort that you put in to all this.

My only concern is that can we (as humans) over do it and continue to modify indicators and systems until we are blue in the face? What I mean is that, overall you were doing great but a few weeks of bad results put you on a downer and had you looking to modify the system. I dont feel like I am in any place to offer any advice to you but maybe these losing streaks have to be accepted as part and parcel of trading.

I was traveling through Perth Australia this week on my way back to Malaysia and came across “Trading For a Living” by Dr Alexander Elder. I bought this book to read on the way home and I tell you, the first 60 or 70 pages of he book are totally dedicated to human psychology and behavior. It truely is fascinating reading.

From my own side, I have not had an extended period of free time to purely concentrate on wilder systems so I can not offer any significant observations or comments to anyone. However, I continue to learn and study as the days go by.

Next week I am off to Bangladesh so again I will not be able to attend to trading. It really is a hard life, but i hope to keep up daily with the thread.

Cheers to all

1088

Hey Boca,

And once again for the kind words.

Funnily enough: you’re the second person TODAY that has wondered whether or not I MYSELF have gone ‘full circle’ i.e. because I ‘hit a losing streak’ AGAIN I’m now actively LOOKING for things to ‘blame’ as it were (I know that’ not what you’re saying but whichever way you look at it that really would be a ‘to the point’ statement)!!! I’ve pondered this at length today (even while I was taking my afternoon ‘between four hour’ nap) and I can honestly say that I don’t think this is the case.

As far as the SIS is concerned:

The TRAILING INDEX SAR and it’s placement has ALWAYS been a ‘bug bear’ of mine i.e. it’s either been too close or too far away and the fact that, even although at the time I thought it was a ‘breakthrough’, simply removing bascially ONE THIRD of the ASI equation just to appease myself has also been constantly bugging me i.e. I’ve been saying to myself ever since then: ‘OK so the TRAILING INDEX SAR now looks right but what ELSE have I messed up by eliminitating the LIMIT’. This only ‘came to a head’ when the Dow dropped so much about three or four weeks ago i.e. only then did I realise that we STILL DO have LIMIT’s imposed and finally found out EXACTLY what those LIMIT’s were. Once I applied those LIMIT’s to the PROPER ASI equation and compared them to the results that I was getting with our ‘supposedly fixed SIS without the LIMIT’ I realised that there was a VAST difference between the two. Only then did I again embark on this ‘voyage of discovery’ i.e. to ‘right the wrong’ and, along the way, I discovered some interesting anomalies which has now resulted in the FSS!!! I’ve checked my ‘thinking’ on this through again and it all seems extremely clear NOW i.e. my comments about the volatility and such volatility being ‘capped’ by the LIMIT (which, ironically, is what a LIMIT is in place for anyway)!!!

The other thing that’s been really bothering me all this while is, oddly enough, something you alluded to today in your post i.e. ‘a losing streak’ (not your words but you know what I mean). This has been bothering me since I started getting ‘chopped up’ (obviously) i.e. the whole PURPOSE of us getting ‘the darn book’ (it has a new name now although it’s not yet been relegated to ‘that fu*king book’ YET) was to be enable us to trade in ANY market at ANY time and still come out on top. When this little ‘mess’ started I kept thinking to myself: ‘What’s the good of making piles of money when times are good but then giving it all back, and then some, when something comes along that rocks boat. Surely that’s not the way it’s supposed to be’??? So of course: my ‘analysis paralysis’ kicked in and the rest is history!!!

WHICH NOW BRINGS ME TO MY NEXT POINT (which I’m SURE you’re NOT going to want to hear or see but I just HAVE to ‘share’)!!!

ADX!!!

DMS!!!

As you all know: in my INFINITE wisdom (and also because I did not think that any of the platforms could do ‘Wilder smoothing’) I decided (and convinced myself at the time which is REALLY sad) that removing the smoothing (LOL!!! ‘removing the smoothing’!!! That’s good!!!) was OK. Well: turns out it’s not!!! Only today I discovered a method of ‘simulating’ ‘Wilder’s smoothing’ and, after sorting out the SUM() function and being able to now parameterise our ADX / ADX Oscillator, I decided to try to implement it with ABSOLUTELY ASTOUNDING RESULTS!!! ONCE AGAIN it would appear that I have ‘egg on my face’!!!

Take a look at the attached chart.

The only two indicators on the chart are the (our new) ADX Oscillator (which really is nothing more than ADX presented in an oscillator form instead of the lines which I find extremely confusing).

The upper indicator represents an ‘unsmoothed’ ADX (my ‘brainwave’)!!!

The lower indicator represents a ‘smoothed’ ADX (when I say smoothed I mean ‘smoothed simulated’ and the formula I’ll post below).

There are some VERY important things to note here:

Had you been using the ‘smoothed’ ADX / ADX Oscillator to trade and you were using it CORRECTLY i.e. using the ‘extreme point rule’ you would have done this trade:

Entered short on 29/09/2008 at around 190.463 (GBP/JPY 4 hour chart by the way). YOU WOULD STILL BE IN THAT VERY SAME TRADE TODAY WITH POSSIBLY ONE FALSE STOP AND REVERSE AND THAT WOULD HAVE DEPENDED ON YOUR ORDER PLACEMENT METHOD. Assuming you’re using my order placement method you would not have been stopped out or had to stop and reverse at ANY time and the result to date: 4 300 pips profit on that trade, without EVER being in a loss, up until RIGHT NOW at the time of posting. That’s 4 300 pips profit in around 7 weeks.

Now take a look at the ‘unsmoothed’ ADX / ADX Oscillator. Even a blind man can see just how many times you’d have had to stop and reverse and you WOULD have gotten ‘chopped up’ NO QUESTION!!!

Now what’s EVEN MORE interesting is this:

I modified the original color bar display of the ADX Oscillator (original, huh: I’ve not even SENT IT OUT yet) so that the lines will thicken when ADX is below both +DI and -DI thus indicating that we should be using something like the TBP or RTS. ‘My heart stopped’ (Billy)!!! Take a VERY close look at the difference between the ‘unsmoothed’ and the ‘smoothed’ oscillator!!! VERY SELDOM does the ‘unsmoothed’ version tell you that you’re trading in a range. Now take a look at the ‘smoothed’ version!!! It quite clearly indicates ranges (OK: the indication is STILL a bit late but nevertheless) and, had you started using the RTS over those periods, and I mean the STANDARD RTS i.e. not this ‘BS’ of not going into trend mode upon a breach of HBOP or LBOP, or had you started using the TBP system during these periods you would STILL have made money, and BIG money at that, during those ranging periods!!!

IN CLOSING: with the exception of the SIS LIMIT the original systems cannot be improved upon!!!

It is a VERY GOOD THING that egg (scrambled, fried, poached) is, in fact, one of my favourite foods!!!

Regards,

Humpty Dumpty!!!

Edit:

I almost forgot.

‘Wilder’s smoothing’ can be simulated by using a longer EMA i.e. EMA(value,(PERIOD*2)-1). Now I know that for some reason or other it does not ‘plot’ the same i.e. no ‘jagged edges’ i.e. ‘very smooth’ the values appear to be as ‘near as damnit’ to what you would get with ‘Wilder’s smoothing’ method (as per my tests anyway).

Another edit:

To ‘prove’ the ‘sumulated smoothing’ I put the ADX Oscillator (‘smoothed’ version) on a daily chart of the Dow. It’s a SAD SAD (trading) world my friends!!! The ADX Oscillator (‘simulated smoothed’) would have got you ‘in’ short on the Dow on around 03/06/2008 at around 12 338. YOU WOULD STILL BE SHORT TODAY AS I TYPE!!! You would not have lost ONE SINGLE CENT on the Dow during this period and THAT my friends IS SAYING SOMETHING GIVEN THE VOLATILITY THAT HAS COST PEOPLE BILLIONS!!!

Question: do I find ‘something high’ to jump off of OR do I trade the ADX Oscillator???

gbpjpyadxsmoothedsimulated.zip (74.9 KB)

dowdailysmoothedadxoscillator.zip (61.1 KB)

1089

Fascinating!!!

Someone has just remarked to me (after showing them the chart of the Dow above):

‘OK. Well how come you never made that money’???

I’ve now thought about this.

This is WHY i.e. this is what would have happened:

I would have got ‘in’ on the short trade as described.

About four or five days later I would have been about 300 Dow points ‘to the good’.

Then the Dow changed direction and starting heading up.

Chances are that at the time I had Bloomberg TV ‘blaring’ on my desk and chances are they were all talking about the ‘big reversal coming’ and ‘is this the end of the credit crisis’ and stuff like that. (By the way: I’ve taken to listening to Don Imus i.e. ‘Imus In The Morning’ now. It’s FAR more entertaining and any predicitions and forecasts that he may make from time to time appear FAR more accurate than any TV analyst)!!!

So: as soon as I saw the Dow turning I would have taken the little bit of profit that was showing.

After that: there was no signal to short the Dow again so no trade and, of course, golden opportunity missed.

Now looking into the future:

Chances are this:

(Murphy’s law):

The moment the ADX Oscillator turns green I will place my order.

Chances are that this trade will go sour within a few days costing me money.

I will then not give the indicator another chance.

I will then be doing the same exercise in a few months from now, demonstrating to you and myself, how much money was to be made from today until whatever day in the future that is. For all I know: I may then be looking at Dow 14 000.

And SO IT GOES ON!!!

THIS is why when, looking at a historical chart, there is ALWAYS money to be made. What’s not often noted is that ‘there is ALWAYS money to be made IF YOU FOLLOW YOUR TRADING SYSTEM’!!!

I WILL master this business.

Regards,

Dale.

1090

Just taking this opportunity to say goodbyte to you, Dale, till next year.

I am so pleased that my work is finished.
I am closing November 15 (Saturday).

I am truely exhausted from posting and editing all the graphs I did.

You are operating a fine thread here.
We are now the longest serving members on this forum - although I have seen a post from Ramrocket who has been here much longer than us.
But he rarely posts.

We are truely veterans, with Daydreamer65 close behind.
All the other old timers have disappeared.

Anyway, all the best, you seem to have plenty of energy to soldier on. :slight_smile: :slight_smile:

See you next year.

1091

Why is it so that if you keep a tight eye on something, nothing special happens, but once you don’t or can’t pay any attention for a couple of days, the action is immediately there? Now all these new findings of you, Dale, sound really exciting to me! And at the same time a bit disappointing. Let me tell why.

Earlier this week I got my trading system working so that it was making real demo trades just as intended on 5 min charts. There had been some peculiarities with Delta’s API, which took a bit more time and testing to get in line than what I had thought, but there it seemed to be anyway. I hadn’t tested it on longer timeframes so far because 5 min gives much more signals. So I was just hoping to get this flying from now on, and now it seems going to trash! Well, not completely, but some major parts anyway.

I really want to play with these new ideas. Let’s hope that we get proof that this starts flying in the long run as well. (There are some questions arising in my mind, but I must now digest all of this properly before throwing in something stupid.)

Anyway, thanks A LOT for your great work, Dale!

J.

1092

LOL!!!

That sounds like trading doesn’t it i.e. while you’re ‘on top of things’ nothing happens. The moment you get ‘fed up’ and decide to ‘step away’ the market rallys!!!

Don’t worry about it (the changes I mean). If anything they should (could) make your life a WHOLE lot easier I assure you. (Contact me over the weekend and we can discuss the ‘discoveries’).

Well: it’s Friday night now and close to closing time (well I AM close to ‘closing’ anyway i.e. I’m ‘bushed’). For what it’s worth: RIGHT NOW, thanks to the FSS, it sure looks like I’m going CLOSE the week ‘up’ which makes a refreshing change from the past few weeks!!! Not much, but ‘up’ nevertheless!!!

I’ll tell you all something though:

I’ve ‘slapped’ this ADX Oscillator (‘simulated smoothing’) on all the charts and sure enough: for once, no question, no complications, just $$$. It’s a crying shame I’ll tell you and I AM ‘beating myself up’ over this right now to be honest. There is not a problem in the (my) world that would not have been sorted out by this time today had I just taken single full lots on each instrument / pair when given a signal to do so I assure you. Ah well: some day soon I’ll ‘get it’!!! From what I’ve checked today: you would not even have to worry about ranging or trending markets with the oscillator i.e. even in a trending market the ‘odds’ of getting stopped out are few and far between and, when you have indeed been stopped out, you are put back in the correct direction within a few days at minimal losses. The one and only thing that can make it fail is a lack of ‘patience and restraint’ (which is one of the reaons I’m ‘hell bent’ on trading the SIS because it caters to someone like me who has neither of these inherent abilities BUT had better ‘harness’ these attributes very quickly)!!! (By the way: the shortest time frame that’s approriate for it is the 4 hour. The daily time frame, however, is without a doubt ‘the winner’). As I said earlier: ANY trading system that was able to make money over the past few months HAS to be a good one and this one SURE seems to have ‘kept its own’ over the past few months.

For interest sake: a single full lot of GBP/JPY would have netted you around $6 900 since July up until now (and that’s not inluding profits that would have been made on one or two stop and reverses but were not much). Here’s the catch though: that was about four to six trades in that period. And to put it in perspective: your margin cost would have been around $107 per position (back then). If I said to you that I know someone that if I gave them $107 TODAY he was going to give me back $6 900 in five months you’d think I was nuts!!! Take the charts and do the math. (OK: obviously you cannot REALLY work it out like that because you’d have to at least ALLOW for the trade to go against you at some point but I’m sure you’ll see and get the picture)!!!

Anyway: I’m just going to ‘tidy up’ these new indicators and I’ll send them out to all concerned. Believe me: you’re going to be AMAZED I assure you.

1093

Good (Saturday) morning everyone!!!

I have emailed the latest version of the Deltastock indicators to everyone concerned this morning. Check your email and have fun.

Now in the ‘spirit of sharing’ (and at the risk of putting myself out of the 'managed account business) I’d like to give you a trade (actually: it’s more of an investment than a trade). What’s more: it really is a ‘you cannot lose’ investment and I assure you will pay off FAR more handsomely over time than a bank. What’s more: it’s absolutely ridiculous in it’s simplicity!!!

Open a trading account.
Deposit the MINIMUM sum of $9 000 for each position you’re going to take.
Buy (long) a single FULL lot of the Dow per $9 000 as detailed above.
No stops.
No TP.
FORGET ABOUT THE ACCOUNT!!!
LET SOMEONE ELSE CHANGE THE PASSWORD AND NOT TELL YOU WHAT IT IS!!!
COME BACK IN A YEAR OR SO (and hope that the person with the password is still around)!!!

The logic is simple:

The Dow is NEVER going to go ZERO. It’s currently at 8 487 / 8 495. You make / lose $1 per point movement. And it’s different from investing in individual stocks for the simple reason that the Dow consists of the average of 30 major companies in the US. If any of those companies go ‘bust’ they are simply removed from the Dow and another one is added in it’s place. Interest is not an issue either because the interest will never come anywhere near the profit made over time.

Now to put it in perspective:

You will have ‘laid out’ $9 000. Let’s say that the Dow takes a year or two to get back to 14 000. If you did this today you would make $5 513 profit (before interest on the position) which, of course, is a gain of 61% for that period. Remember also that WHEN the Dow get’s to 14 000 it’s not going to stop there this time i.e. it’s going to go way beyond. I belive that if you have ‘years’ left and need to ‘save’ for a child’s college education or retirement or something like that then this would be a good idea i.e. LONG TERM.

How’s that for ‘cannot lose’!!! The ONLY POSSIBLE drawback is that your broker goes out of business and that does not happen very often and if it does then your capital is SUPPOSED to be guaranteed.

The same thing can be done with the S&P and Nasdaq 100 AT DELTA. NOTE: AT DELTA (I’ll explain why shortly). Less capital is needed but, of course, there is less profit potential.

Why ONLY AT DELTA???

Because at a broker like GCI the Nasdaq 100 and S&P is leveraged at 200:1 so you’d be making / losing FAR more than $1 per point movement at GCI so you’d therefore needs LOADS more capital. This only applies to the S&P and Nasdaq 100 i.e. the Dow at GCI is still only $1 profit / loss per point movement and the margin cost is only $50 per position. GCI’s interest is higher though but, over time, this would still not matter.

As I said: that’s not ‘trading’ in the true sense of the word but rather ‘investing’ or call it ‘tradevesting’.

This could also be done with certain commodities e.g. Silver. The ‘trick’ in all cases is to ensure that you have enough capital in the account to cover a move to ZERO. Silver at ZERO??? I think not. Not EVER!!!

Just a little ‘out of the box’ thinking is all!!!

Regards,

Dale.

1094

Well, it would seem that ‘Humpty Dumpty’ is posting again!!!

A funny thing happened today!!!

I was sitting here this morning checking the RSI and ATR indicator(s) to ensure that I’d added my ‘simulated Wilder smoothing’ to the RSI and it occurred to me that I’d made a HUGE mistake in the coding of the ADX Oscillator equation that I sent out this morning i.e. it in no way even RESEMBLES Wilder’s ADX (neither ‘smoothed’ nor ‘unsmoothed’). But get this: due to my inadvertent ‘turbo boost’ I’ve created some sort of ‘supa dupa ADX monsta’ which, no matter on what (daily) chart I ‘plonk it on’, is good for thousands of pips per trade over a relative period with very few or even no whipsaws (depending on where you’re placing SAR orders), and profits that far exceed losses in the thousands of pips / points!!!

As I said to my ‘clients’: maybe this is how fire or baking was invented (I’ve always wondered about those things)!!!

Can you beat it!!!

Regards,

Dale.

1095

Good (Tuesday) afternoon everyone (anyone???).

Is it just me or has this thread gone very quiet???

Anyway:

I just thought that you should all know that things have improved somewhat since my ‘adjustments’ to the SIS i.e. the FSS. No whipsaws, no losses, with small profits (the markets don’t seem to have much ‘energy’ at the moment).

I’ve also been using the ‘double smoothed’ ADX Oscillator (the ‘mistake’) and it turns out that it’s almost IDENTICAL to Wilder’s ‘standard’ ADX if the period used is half of the period used for the Wilder’s ‘standard’ ADX e.g. a 7 period ‘double smoothed’ ADX is pretty close to a 14 period ‘standard’ ADX. HOWEVER it has one MAJOR advantage: because of the ‘double smoothing’ most whipsaws or meaningless / confusing signals appear to be eliminated!!! I’ve been testing it on the 5 minute charts on GBP/JPY and some of the indices and so far so good.

By the way:

One other ‘trick’ I’m employing with the ‘double smoothed’ ADX Oscilllator:

Start with a period of 7 and scroll through the ENTIRE chart in front of you. If you see single bars of one color ‘intermixed’ with a series of bars of the other color then simply increase the period until you ONLY get bars in series. You’ll find that by doing this certain periods will work better for cetain instruments e.g. the FTSE 100 5 minute chart has no false signals with a period of 10 whereas false signals are eliminated using a period of 8 for GBP/JPY.

JUST keeping you all updated!!!

Regards,

Dale. (forexbrokersonline.net).

1096

I’m getting on the ride with these new ideas. After having a second look at FSS against my SIS trading application, it turned out that they were actually very close to each other. I had just change ASI to closing prices and TISAR offsetting to ATR. ASI --> close = sheer beauty of programmatic simplification, this is what I like / simple is beautiful / K.I.S.S. After locating and correcting a bug in trade placement, I have now a system that I look for making me money by itself one day. Some tuning will be needed, though, before I dare to use it live.

Here is a question about stop order placement with FSS. I have attached a recent snapshot of GBP/JPY 5min today. The indicator below shows FSS closing prices (black line), index SAR (blue line) and TISAR (pink line). Rules for reversing are as for SIS. Green dots denote long trades and red dots short ones. Real trades will not follow these dots perfectly if you use stop orders. My question is: where would it be best to place these stops?

At point A you can see a LSP formed after a significant HSP. This has moved the index SAR higher. The stop order for this trade must be moved as well. The LOP is formed one candle after the LSP, so we take it as the reference point. I’m now placing the stop at a distance of c*ATR(14) (c=0.9 remaining from the SIS backtests), but does anybody have any better ideas for determining the stop?

At point B the black line makes a deep dive through TISAR, which is above the index SAR. Here I was again calculating a stop in the similar manner as for the index SAR, but having seen that deep curve it seems now a bad idea. TISAR is already at a distance of 2*ATR from a reference price, and it should denote a reversing point as such. I’m leaning towards closing this kind of a trade at market when TISAR is crossed, and reversing at the same time. Would this sound reasonable?

Looking now again at A: if we place the stop here at a distance of roughly 1*ATR below the LOP, it would mean that the stop is actually placed below TISAR! And you’d better not place it too close to the LOP to avoid whipsaws. So you could place the stop at TISAR right ahead, making the index SAR completely redundant. While this would be another simplification of this system, I’m now afraid that something would be lost here, but I’m not sure. Any comments here?

By the way, I had to refresh the picture while typing this. There is the finest downtrend forming in this chart today, and my system picked it correctly after B (just being a bit late because of the reason explained above). 100 pips in a 5 min chart, not too bad!

J.

Edit: I’ve been watching the charts now and looking at confirmation to my ideas. It seems to be so that when TISAR is crossed, it is reasonable to reverse at market rather than by a stop calculated with ATR. There are not that many TISAR crossings, but when they happen, the turn seems to be that strong that it is more beneficial to jump on straight ahead than to wait a bit.

I’m not that sure about leaving the index SAR away. What might work could be to use smaller ATR factors, e.g. 0.5 for stop by index SAR and 1.5 for TISAR offset.

GBPJPY_181108.bmp (36.2 KB)

1097

Hello,

J.:

I think we’re onto something here with the FSS. As you note: it’s sheer simplicity combined with the SIS entry and exit rules is great and it’s working just fine for me i.e. it’s just been very good to me with 175 Dow points in the last half hour of trading!!!

I’m not 100% sure what you’re asking / saying but let me just give a very brief summary of what I’m doing with it:

An entry order is placed once there has been a close above a SIGNIFCANT HSP or a SIGNIFICANT LSP.

If the above order is executed then an order to SAR is placed IMMEDIATELY below the previously formed LSP or IMMEDIATELY above the previously formed HSP. I am using a percentage of the MY AVERAGE RANGE (or Wilder’s ATR if you prefer) for the value of this order e.g. price plus or minus 20% (which I think is what you were getting at). This is adjusted on a ‘per instrument’ basis i.e. it would be ridiculous if 20% of the AR (ATR) is calculated to be 2 Dow points i.e. it would get ‘caught’ every time because it’s too close so I sort of ‘judge’ what’s good for the Dow (as an example). These orders, of course, represent the INDEX SAR orders.

If the TRAILING INDEX SAR becomes the closest SAR point because no new HSP’s or LSP’s have been formed then an order is placed as per the above AFTER THE CLOSE OF THE BAR.

From what I’ve seen since last week the TRAILING INDEX SAR VERY RARELY (NOW) is the closest SAR point i.e. I’d say that 90% of the time the closest SAR is the INDEX SAR which, from what I can see from ‘the book’ as well as with my tests of the ‘proper’ SIS using the Dow LIMIT move is correct.

Remember that ‘the old man’ says that MOST times the TRAILING INDEX SAR order is NOT executed and price turns and continues to go in your favor. This is particularly true of the daily charts but less so on the shorter timeframes e.g. 5 minutes where you and I seem to be working.

The other thing that is now possible given the modifications to the SIS i.e. the FSS: one could actually TRAIL the TRAILING INDEX SAR because you now have the values instead of the ASI numbers. Having said that: I’d ONLY do this IF the position will close out at a profit if that stop order is executed and it would INDEED be a STOP order and not a SAR order.

One other thing: the INDEX SAR is only moved after the CPI (‘Closing Price Index’ / ‘old’ ASI) has made a NEW HIGH FOR THE TRADE. This is VERY important because moving the INDEX SAR each and EVERY time a new HSP or LSP has formed BUT has not been preceeded by a new CPI (ASI) high results in whipsaws as well.

Also remember that you don’t HAVE to use my 2 X AR (ATR) i.e. you could use any multiple you care for. I have experimented with 3 X AR (ATR) on the Dow but that’s just too far i.e. the TRAILING INDEX SAR then NEVER gets hit ALTHOUGH I will say this: 3 X AR (ATR) is VERY close to the ‘plot’ using the ‘standard’ SIS with the proper Dow LIMIT having been input.

I must say that the (your) indicator looks good i…e I like the way it ‘mimicks’ the TRAILING INDEX SAR as detailed in ‘the book’ i.e. your TRAILING INDEX SAR ‘levels off’ after a new HSP or LSP has formed which is great (mine is a bit harder to read).

The FADXOSDS (‘double smoothed’ ADX Oscillator) also worked nicely yesteday and today and was good for about +200 pips on GBP/JPY (5 minute charts) between yesterday and today as well as about +85 pips on the FTSE 100 today. I checked it on the Dow as well today and it would have made a little bit without any real loss or drawdown but nowhere near as much as the FSS.

I hope this helps.

Regards,

Dale.

1098

Good (Wednesday) morning everyone.

J.:

One thing I forgot to mention in my post above:

When calculating the order prices (entry, SAR, exit, whatever) by using a percentage of the AR (ATR) I use the CURRENT (well the previous period’s AR (ATR) i.e. the AR (ATR) at the last closed bar) EVEN IF the order being placed may ‘refer’ to a period / bar that is three or four or five periods / bars back (I don’t know if you noticed it in the code i.e. I ‘BACKSET’ the CURRENT AR (ATR)). The reason for this is that with the FSS (SIS) you’re constantly placing orders above or below previous periods / bars and it makes no sense to use the AR (ATR) value BACK THEN i.e. even although you’re placing orders above or below periods / bars ‘in the past’ it’s the CURRENT AR (ATR) / volatility that counts not the AR (ATR) that prevailed AT THE TIME.

Sorry: I know that’s a bit of a ‘messy’ way of describing what I’m doing but I hope it gets the point across.

As for trading: it would appear that things are now ‘back on track’ for me (I’m ALMOST ready to ‘bet the farm’ again)!!! I don’t know if it’s my recent changes to the SIS and the resultant FSS and my ‘variations’ on ADX and the ADX Oscillators or if I’m just managing to follow the systems AGAIN but so far (since last Friday with the FSS and Monday with the ADX Oscillators) so good EVEN with the current market volatility. Yesterday, using the FSS, I was stopped and reversed TWICE on the Dow for total losses of -200 points and I STILL closed out ‘up’ after those losses so ‘touch wood’ the FSS appears to be ‘on the mark’. Of the two ‘new’ systems the FSS is the more profitable because it gets you in earlier and out earlier but requires more concentration whereas the ADX Oscillators are sort of ‘the laid back way’ to trade so, as with anything ‘easy’, they generate less profits but profits nevertheless and I suppose that’s what counts.

Have a good day.

Regards,

Dale. (forexbrokersonline.net).

Edit:

By the way:

The same ‘logic’ described above is used for the TRAILING INDEX SAR placement as well i.e. the TRAILING INDEX SAR is ALSO always being adjusted by the CURRENT AR (ATR) and is not ‘static’ in past periods which AGAIN is one of the reasons I’m not getting stopped and reversed at every ‘price twist’.

1099

Just a little bit of insight here:

If you have a bit of capital (say a minimum of $1 000) and you CAN / ARE ABLE / ARE AUTHORISED to trade the indices then, in order to build your confidence in the systems, why not trade the CAC40, the S&P, or the Nasdaq 100 at Delta. Each of these yield around $1 per point movement and they ‘tend to trend’ on any timeframe intraday. They also don’t have the ‘violent’ moves (particularly not the CAC40) that the DAX, FTSE (UK100), or the Dow have so trading is ‘leisurely’ and you have time to sit and analyse the the systems without having to ‘panic’ when things go against you. You’re not going to ‘get rich quick’ but something like the CAC40 should be good for about $100 per day per lot. Unless you’re an ‘idiot’ (like me) or have ‘brass ones’: stay away from the Dow because of the HUGE intraday swings that manifest themselves right now. Unfortuanately the Dow is my ‘achilles heel’ i.e. I HAVE to trade it!!!

Please note: the above at DELTA NOT GCI. GCI ONLY has the futures and they’re leveraged at 200:1 (or 400:1) so you can ‘see your ar*e’ VERY QUICKLY AND EASILY!!! TRUST ME!!! I KNOW!!!. At Delta they’re all leveraged at 20:1 so you can ‘make mistakes’ without obliterating your account.

If you’re unable to trade the indices then take a look at a pair like EUR/RON or USD/RON. This MAY sound like ridiculous advice given the spreads but before ‘chastising’ me take a look at the 30 minute charts (for example) of those two pairs (with either the FSS or one of the ADX Oscillators). They also don’t suffer from the ‘violent’ moves that something like GBP/JPY does. Again: it gives you time to work ‘slowly’ through the sytems until you’re confident enough to move to the more volatile and ‘popular’ pairs. (Also take a look at USD/TRY and, to a lesser extent, USD/RUB).

Just some thoughts (I’m currently trading on the 30 minute charts to test the FSS and ADX Oscillators on this timeframe so I get bored between ‘periods’. Posting keeps my ‘fat fingers’ away from the trades. Catch you in 30 minutes)!!!

Regards,

Dale. (forexbrokersonline.net).

1100

Every now and then during the day I get a text message on my mobile phone but whoever is sending the text message is using my email to SMS service to send the message but is sending the message in HTML format and not in TEXT format. If you’re one of my clients and you’ve been trying to get a hold of me using this service then please ensure that you are sending the email message in TEXT ONLY format and NOT HTML format. If the message is sent in HTML format it is unreadable and I therefore have no idea that you are trying to get a hold of me.

Regards,

Dale. (forexbrokersonline.net).

1101

Hello all of u

hope that things are going well with every body happy to know that u (Dale) is back on track hope that this will last for good!!

I am just wondering why no one is talking about any other systems apart from the SIS .my question is just to make sure i am not missing or wasting my time with the VS. as a matter of fact i am sure that the TBPS is waste of time but is THE VS a good system or not .

this is my third day on opening a position with the VS and it is showing a good profit i know it is so early but i hope it is going to be good on the long run

have a nice trade

Akram

1102

Hey Akram,

It’s nice that SOMEONE other than J. and I are still at this!!! (Nudge nudge wink wink)!!!

The only reason EVERYONE is talking about the SIS is purely because, of all the systems in the book, it’s the one that does the most trades, and, if used correctly, limits losses and is highly profitable. Also: it’s ‘the system’ in the book that we’ve not been able to ‘crack’ up until now I believe.

It’s funny that you mentioned the TBP System. In my ‘spare time’ I’ve been looking at it again and I came up with another ‘simplified’ version of it that makes it easier to trade and far more reliable and would be great for those who feel the need to follow OTHER money management rules like the ‘never risk more than 1% of your account’ type money management rules. It’s also ideal for those who’d rather take ‘nibbles’ of profits out of the market as opposed to sitting in front of the charts hour upon hour i.e. take the trade, set your TP, set your stop loss, and GO AWAY!!!

Please note: I am NOT going to trade this i.e. it’s taking EVERY bit of self control that I have to stick ONLY to the FSS (‘new’ SIS) and my ADX Oscillators and it’s payinbg off once again!!! Once I’ve paid my clients out and got everyone else ‘off my back’ I’ll ‘igve it a bash’ but until then I’m NOT going to ‘waver’!!!

All it is (the simplified TBP) is this:

  • ‘Slap’ the RTS onto your chart (ONLY DAILY by the way).
  • Also ‘slap’ RSI on your charts.
  • You CAN if you want: ‘slap’ ADX or one of the ADX Oscillators onto your chart but I still don’t see the merit (this would be to ‘see’ whether price was trading in a range or not). As a matter of fact: this ‘version’ of the TBPS would work BETTER in a trending market than a range bound market (but will work for both).
  • Calculate the MF as per the TBPS.

Now:

Enter at market as per the TBPS in the direction indicated by the MF AND ALSO, if long is indicated, RSI is above 30 and sloping upward or, if short is indicated, RSI is below 70 and heading downward. TP is at RTS level B1 or S1 and stop loss is EITHER B2 or S2 (additional levels that I added to our modified RTS) OR the bottom of your entry bar OR as per the money management rules as detailed above.

The problem with the TBP has always been the fact that the MF does not take enough data into account when ‘predicting’ the momentum direction whereas RSI, obviously, is far more ‘stable’.

What you will also find (actually somebody else pointed this out somewhere earlier on the thread): the TBP’s TP points are actually identical to the RTS TP points so there is not much difference in this ‘variation’. Of course: you forget about the ‘Trend Balance Point’ and stopping and reversing i.e. you trade one way, TP or get stopped out at a loss, and that’s it. On the charts that I’ve checked the profitable trades ALWAYS exceed the losing trades.

We all had ‘high hopes’ for the VS but in the CURRENT markets the VS normally takes away most of your profit before having to stop and reverse IF YOU’RE LUCKY i.e. most times the SAR resulted in a loss. We then ‘modified’ the system to use a constant of 1.0 instead of 3.0 once ‘in’ to TP (you did not SAR at that point but only took profit and then waited for the next signal) but I lost a lot of money on stocks using that method and I don’t know if anybody carried on with it. In ‘normal’ markets i.e. where volatility is not an issue, the VS will work beautifully I have no doubt but in these markets you’re ‘a*se’ is left open far too wide in my opinion. I can tell you that had I tried to use the VS on the Dow over the past few weeks, given the volatility, I’d have lost BIG BIG time i.e. by the time the VS gave a SAR signal the Dow could have gone against you by 500 points!!! This would apply to soimething like GBP/JPY as well. All I’m saying is: be careful with the VS. Most people that have tried it out have started out ‘with a bang’ and ended up scrapping it after consecutive losses.

Have fun.

Regards,

Dale. (forexbrokersonline.net).

1103

Dale thanks for your answers, they matched my questions well!

When calculating the order prices (entry, SAR, exit, whatever) by using a percentage of the AR (ATR) I use the CURRENT (well the previous period’s AR (ATR) i.e. the AR (ATR) at the last closed bar) EVEN IF the order being placed may ‘refer’ to a period / bar that is three or four or five periods / bars back (I don’t know if you noticed it in the code i.e. I ‘BACKSET’ the CURRENT AR (ATR)). The reason for this is that with the FSS (SIS) you’re constantly placing orders above or below previous periods / bars and it makes no sense to use the AR (ATR) value BACK THEN i.e. even although you’re placing orders above or below periods / bars ‘in the past’ it’s the CURRENT AR (ATR) / volatility that counts not the AR (ATR) that prevailed AT THE TIME.

This is what I have concluded as well. I don’t see any point in using historical ATR values.

Of the two ‘new’ systems the FSS is the more profitable because it gets you in earlier and out earlier but requires more concentration whereas the ADX Oscillators are sort of ‘the laid back way’ to trade so, as with anything ‘easy’, they generate less profits but profits nevertheless and I suppose that’s what counts.

This is also nice to hear. Because of my restricted time, I need to keep focused better than what I have done earlier. And FSS is my focus now, though I have done only automated demo trading with it recently, and only with one pair and only on 5min chart. Maybe I should apply next the better parameters you described on some longer timeframe and add more pairs.

J.

1104

Hey J.,

I would say to try the FSS out on the 1 hour timeframe. I noticed today that even the 30 minute is slightly too short i.e. I got whipsawed a bit today on the CAC40 but, after changing to the 1 hour, things calmed down well.

For interest sake (and I never thought I’d see the day I advocated this): the ‘double smoothed’ ADX Oscillator (using one half the period i.e. 7) is an IDEAL ‘scalping’ tool believe it or not!!! Seeing as the CAC40 is closed for trading I thought I’d ‘give it a bash’ on the Dow and ‘hey presto’: it certainly seems to have merit (trying it out on the 1 minute chart)!!!

Regards,

Dale. (forexbrokersonlinet.net).

1105

Hello Dale,

Thanks for this great info .I am so upset now as u r saying this it is not working although i opened 2 positions based on the VS beside my earlier position and all are sitting in a very very nice profit Any ways ofcourse u and the other folks have more experience than me in the VS i will watch out

I hope that u never touched the Dow today!!

As for the TBPS it took me so long to study it and try it like what the man said and with different stuff that i came up with but it never ever happen to get profit as the losses are always huge .

I think in normal markets things will be better for the VS as u r saying. i tried to understand the SIS but i think it needs more and more concentration and clear minded as well i will try to do so then i will jump on the FSS (i think this is what u came up with).

By the way Criag are u there??u still around?

Regards,

Akram

1106

Hey Akram,

You get upset too easily (LOL)!!!

Let me just make something quite clear here:

Although I (and others) MAY come across as ‘authorities’ on these systems: just remember that what works for me / us may not work for you and visa versa. A good example is Parabolic SAR!!! I know of one or two people who simply ‘plod along’ with it make some money. As you know: it did not work for me. Do you understand what I’m saying? I know of some people who have no faith at all in the FSS (SIS) but it works for me WHEN FOLLOWED correctly. I know of some people who absolutely LOATHE the RTS but it’s only ever worked for me. You are having success with the VS: it’s only cost me money in the long run. Of course: one would ASSUME that because we’re ALL following the same systems that they would work ‘across the board’ ESPECIALLY seeing that they’re purely technical in nature. Unfortunately this is not so because we all succumb to our own shortcomings at some point or another. I REALLY WANT WHATEVER system you trade to work for you but that does not necessarily mean that that’s going to happen. You have to test these systems for yourself and see which ones work for YOU and then STICK WITH THE ONES THAT WORK FOR YOU. One thing though: don’t make the mistake that I and many others have made i.e. start a system, take one or two consecutive losses, then give up on it, and move on to the next one. I spend a LOT of time nowadays simply going through other indicators and things to pass the time while I’m sticking ‘doggedly’ to the FSS and the ‘double smoothed’ ADX Oscillator that I came up with and what becomes very apparent is that MOST systems / indicators (within reason I suppose) WILL make money over time. A good example is Bill Williams’ AC or AO (or both). If you really just did mechanically stop and reverse every time you were given a signal you would ‘come out on top’ over time but, as I said earlier, we all tend to try out a system, take one or two (MAYBE three consecutive losses) and then move on to the next one and the whole cylce repeats itself until your capital has been ‘eaten away’ ‘slowly but surely’. It’s as J. said the other day: why is it when you’re LOOKING at something nothing happens but the moment you STOP looking it ‘takes off’ (OK: he was referring to the thread but it applies to trading as well). I cannot tell you the amount of times that I’ve ‘bailed’ on a system because I’ve taken one or two losses, only to find that had I just taken ‘one more trade’ using that same system I’d have not only covered those losses but made a huge profit. Of course: there also HAS to be a certain amount of losses that your are ‘prudently’ willing to sustain i.e. there’s no point in taking loss after loss after loss JUST to prove that a system / indicator does NOT work (as I have done several ‘majestic’ times)!!! Unfortuanately: this is an individual thing i.e. only YOU know when you’ve ‘bled out’ enough for it to be time to ‘call it quits’ and then move on and try to find something else that works.

Regards,

Dale. (forexbrokersonline.net).