|
PureBytes Links
Trading Reference Links
|
Al. Many thanks indeed for taking the time and trouble to post your methods
in such detail. I am sure many members will find them very useful. Even if
they are not suitable for some people's type of trading they are a great
source of interest, study and help to those not so experienced. Well done.
-----Original Message-----
From: Al Taglavore <altag@xxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Cc: metastock@xxxxxxxxxxxxxxxxxxxx <metastock@xxxxxxxxxxxxxxxxxxxx>
Date: 12 August 1998 08:56
Subject: Re: Profitable trades
>John,
> I use several methodologys, because there are different types of
>markets. I reject the statements that a good system must work in all
>markets and all time frames. I cannot trade bonds like I trade
>currencies like I trade big cap stocks with robust volume like I trade
>small cap stocks with thin floats. Perhaps the basic philosophy is the
>same, but the parameters will be different. I am a semi-mechanical
>trader. I would like to be more mechanical than I am, and perhaps in
>time, this will come to past.
>
>I have studied the bond and DMark market, have learned from Time/Sales
>studies at the CME and CBOT web sites what times of day retracements can
>be expected. Also, studying the Globex prices have led me to a "feel"
>of when prices are artificially marked up/down, so that I can take the
>opposite side of a trade. I have a chart window that shows me the 10
>day and 3 day Average True Range of the Mark and Bond. My weekly charts
>show me that the 4 week and 1 week ATR is very close. This allows me to
>enter low risk trades on Fridays. That is, if the Mark has traded it's
>four week ATR, then fading the move has been profitable. Often I can
>take this trade at 12:40-1pm on a friday, be in the market for 1-1 1/2
>hours and make a nice profit. Importantly, my risk is low. This works
>with the TBond also.
>
>I read my charts and do not rely on indicators. (I am currently working
>with the RSI and MACD, but they do not enter into my trading decisions,
>as of yet). I use moving average bands of 10 days sma of the high,
>median price (very important to me) and low. I use a 20 day xma of the
>median price as a support/resistence level. I try to keep everything
>simple and in a context that I understand: I must know where today's
>price is in relation to the bands. (If price moves up from the low
>band, I want a buy stop just above the median price. If the median
>price lines does not support price, I want out. Now! I have my trade
>entry, profit target and exit price written before I execute the trade.
>I believe when I place a trade that I do not know which way it will go.
>I have a 50/50 chance of being correct. If I am wrong, it is not a
>personal thing PROVIDED I EXIT IMMEDIATELY. I can calculate my loss
>after the trade is closed. If I am wrong, and STAY wrong, that is a
>major sin. As an example, I will buy 200 shares of CBE in the morning.
>I know where I will try to buy it, and I know where I will try to exit
>if the stock turns south. As long as I execute my program, I am
>satisfied.
>I cannot predict markets. I can only read my charts and hopefully, the
>market. If I am wrong, the market tells me in no uncertain terms.
>
>A Long Trade System that I use on the TBond is:
>enter long: Cross(Mov(C,3,S), Mov(MP<>,3,S))
>close long: Cross(Mov(MP<>3,S), Mov(C,1,S)
>
>That is, when the 3 day sma of yesterday's close crosses the 3 day sma
>of the median price, I will enter long at the high of the day I got the
>signal plus 3/32.
>I will close the position when the 3 day sma of the median price is
>greater(higher) than the 1 day sma of the close.
>
>I am saying that if the 3 day sma of the close crosses above the 3 day
>sma of the median(average) price, then I must be in an uptrend, and I
>want to be long. When yesterday's close falls below the 3 day avg of
>the median price, I want to be out at the low of the signal day less
>3/32.
>The 3/32 is my filter. I arrived at this system by studying the price
>movement on 100's of charts. If you will run this system in MS system
>tester on the TR98U, you will find you would have made 18 trades, 11
>winners and 7 losers. avg win/loss 2.08. In the real world, however,
>you would not have been trading the Sep contract before May. From May
>to date, there were 6 trades, 4 wins and 2 losses. The wins were 38/32,
>the losses were 19/32. Profit: 19/32 {$593.75}. It is because the Bond
>market has been stuck in a range and the good trades are slow, that I
>have started trading some stocks. The method is simple and sound. The
>parameters must be adjusted to whatever you are trading. Look at a
>chart where there is a strong trend. Notice that the low does not go
>below the low of the previous day. Then buy and hold on with a stop just
>below the low of the previous day. If you are stopped out and the stock
>turns back up, then buy again, commission is cheap. When I see a price
>movement below the low of the previous day, I cannot tell how much lower
>it will go. Remember, I cannot predict, I just read. If you see a
>price of 52 2/16, do you know what the next tick will be? Me either. If
>it is below yesterday's low, I want out.
>
>You asked me questions, and I have tried to answer. I know that the
>TBond trade outlined above works, I ran untold system tests. My tests
>did give me a different parameter to exit, but it did not suit my
>temperment, so I use what I have written. I scrifice some profit, but I
>take smaller losses. Importantly, it suits my personality.
>
>Thank you for giving me the opportunity to share with you and the others
>on this list.
>
>Al Taglavore
>
>
>
>
>John Manasco wrote:
>>
>> Al
>>
>> You seem to have been on this list at least as long as I have and I was
>> wondering if you would share some of your ideas. I know you trade
>> futures which is a scary thing to me, now that I think of it stocks are
>> pretty scary right now also <g>. What sort of systems do you use or are
>> you working on, i.e. channel breakout, moving average, etc? Do you do
>> strictly mechanical trading or are you also a discretionary trader? Are
>> you a daytrader or longer term? Am I nosey or what? Not really trying to
>> be nosey but I think you have a lot to contribute to the group.
>>
>> Thanks
>>
>> John Manasco
>
|