|
PureBytes Links
Trading Reference Links
|
John, I wish I could help you more, in terms of exaclty how I trade Walter
Bressert's CycleTrader during the day, but it would just be too exhausting.
Let me try to indicate the outlines of what I do.
1. Decide at the beginning of the day, after 15-30 mins. of trading, what
kind of day it is likely to be - up, down, sideways. Read newswires and
faxes (DTN and Hightower) to get feel of the floor. Watch CNBC. Check bonds
in first 70 mins. See Globex. Use experience (e.g., three strong up days
means next day likely down, etc.). Use the long-term Bressert trend charts
(more in #2 below). I NEVER TRADE THE "OTHER SIDE" OF THAT "TREND" (by MY
definition), because too often I've been blindsided by the incedible
volatility on the S&P.
2. Then review all the CycleTrader charts on my TradeStation. I have these:
Weekly data; Daily data; 203-min. data; 68-min. data; 20-min. data; 5-min.
data; and 3-min. data. Trend confirmation uses the Weekly, Daily, 203 and 68
charts. I use the 68-min. chart during the day to make sure I am still
"right" about the trend.
3. Now the trading. I use the 5 min. chart to issue set-up paintbars. I
use the 3-min. chart to tell me when to enter exactly. I call in the order.
I use the 20-min. bar to determine the stop-loss exit, a bit broad, but I
got tired of being stopped out with the volatility. (Nuance noted: I don't
enter on the 5-min. bar unless the 20-min. bar would ALSO have called for an
entry.)
4. I get out one of three ways: (a) stopped out; (b) profit seems right,
given the way the 68, 20 and 5 charts look (e.g., cycle about to change, too
much loot for normal humans, a nice round $1,000 profit, my mood); (c) trade
going on too long - should turn a profit in an hour, certainly get out before
Big Board closes.
5. Results. I probably take an average of two trades in 3 days. I would be
able to take more, but I am very skittish now about trading long. So it's 2
shorts, one long, in 3 days. That's an average. I win some (about half),
lose some (about a third), and some draw even.
6. When I have failed, it is because I wasn't bored enough. Seriously.
Distractions kill you. To me, S&P day-trading is all about sitting in front
of a computer screen. You can listen to CNBC, mostly because you've heard it
all by 8:30 a.m. If I do more interesting things, like write e-mail to RT,
or try to slip in a movie cassette, I cannot trade. Bressert's method
requires NOT ONLY strict attention to the screen BUT ALSO almost continous
recalculation of the key target points and numbers you are able to use to
project things out. I take all that arcana very seriously, mostly, again, to
make sure I have the protection of a higher likelihood of entering on the
correct side of the larger trend. To me, it's all about lengthening my odds
of winning, which as I say are now 50%. I want to keep trying to get that
up.
7. You can make money, of course, on 50% winners if you use Bressert's tight
stops to close out the losers at small numbers. Then you should be okay,
because you got the trend right and that means your winners will run longer
than the "bar distance" of a tight stop. It took me a long, long time to get
greedy enough to let my winners run - still kind of tough for me. With the
volatility, on the one hand the winners tend to run longer, but on the other
hand they can turn faster and run hard the other way. Have to keep that eye
on the screen.
I hope this helps.
Good luck.
Larry
|