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Larry,
I've been following your daytrading experiences w/ CT w/ fascination;
especially your response to those who complain CT is "too hard." As a CT SP
daytrader I accept the different trading styles we all have. I also accept
the discipline required. Frankly, I have little patience for those lacking
trading discipline and who still want some "easy" way to turn the crank to
extract $$ from the SP. There's a reason the veteran traders say dues must
be paid. Daytrading the SP (IMHO) is THE hardest game in town. It takes a
special type of person to succeed at it. Those who've "survived" know that
it takes much more than a mechanical trading system or some software
package to give you the "edge". The MOST important factor is inside the
trader. If s/he survives, even makes a little $$ while paying their tuition
in the mkt, then usually you can say it's because they've learned a little
something of the NATURE of the market.
This is why I prefer an approach that requires some discretion. Don't get
me wrong, I'm not against mechanical systems, etc. In fact, I chair a
Mechanical Trading Systems SIG in my futures trading group. It's just that
I came to realize it's not so much WHAT you trade with as HOW you trade.
I've used CT now for nearly 2 yrs in the SP. I haven't yet used it for
position trading altho I'm migrating in that direction (in conjunction w/
seasonal tendencies, Taucher's linear cycles, Elliott, Gann, Fib, and
astro). I took a daytrading seminar from Walt Bressert about a yr and a
half ago & got a TREMENDOUS amount of value from it on how to daytrade SP.
NOT just his cyclical view of the mkts but 25 yrs of trading experience,
period. I left in a state of overwhelm, fiddling endlessly w/ his setups, etc.
I've arrived at a point where I combine mkt structure (Elliott & Gann) w/
cycles in previewing likely mkt direction. I see you already know the value
of trading the trend from the higher time frame(s). One thing I noticed by
its absence is you never mentioned CT's Timing Bands. If it's because of
all that "recalculating" you referred to I sympathize. But to get those
high probability trades you need to use them. If you've "fallen away" (as I
did) be reassured that the 4.0 upgrade will make that job easier. Will this
& the other improved features make CT easier to use? Probably. Will all
those people sitting on the fence change their minds? Bressert certainly
hopes so, but I can't say for sure, as some people equate a learning curve
w/ something to be avoided.
I treat daytrading as a business. I've owned several. Whenever I wanted an
edge over my competition I was willing to pay or learn or both whatever it
took. So it is w/ the SP. Personally I recommend the whole package: buy CT
(4.0), learn what you can (order the videos), then take Walt's seminar. If
you're serious about this you'll make $$. Maybe not right away, because a
lot of it is about working on yourself, not just operating a systematic
approach to trading (which CT is) vs buying a system to make $$. BTW, even
tho I took Walt's seminar some time ago I'm reviewing it this month in D.C.
I expect to get twice as much out of it as the first time because I've
learned so much more about the MARKET, not just CT. Like Larry, I have no
relation to anyone @ Bressert Group nor anything to gain by expressing what
is just my opinion. I hope I didn't come across too much like I was on my
soapbox. I'm holding off on my trading methodology until I return from the
seminar since what I'm currently using may be subject to change.
Good luck,
Michael Guess
At 12:31 PM 7/10/97 -0400, LHonigAtl@xxxxxxx wrote:
>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
>
>
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