In this method I use the ADX to help identify where the market is in relation to a trend. I got the 25 number from a professional breakout trader. He indicated that the market tended to stall in the SP market when the 30 min. ADX rose above 25. He uses it to help time his exits. I use it to just identify whether a big move is likely from my entry. Yesterday the ADX was above 25 and the market did nothing to the upside. Today the ADX dropped below 25 when the market dropped early. It's just now gone above 25 and there's been a good move today. Let's see if the market can go much higher above the current top of 1147.50 during the rest of today.
I stopped using the old methods because the frequency of trades was too low and the profit potential in this lower range market was too small to make a living without trading lots of contracts. I also wasn't comfortable trading more contracts with very tight stops. I didn't realize how soft my rules for this method were until I started posting about it. I had been paper trading it last month and thought I had it down pretty well. I went live and it's done very well so far (up more than 40 points per-contract last week alone). I'm still not very comfortable taking breakout trades but I feel very comfortable with the range trades. If anything, I probably shouldn't have started a journal on it until I have 2 or 3 months experience with it.
Not expecting much of anything for today. I'll be looking for a early test of yesterday's high and a shorting opportunity. RSI on 30 min. is above 60 and ADX is above 27 so I think very limited moves to the upside and small trading range for the day. Might not be even worth trading today.
Had a small problem yesterday. I knocked a bookshelf off and broke my DSL splitter. It's now fixed so let's see if I can make some money today. Looks like a possible breakout to the upside today. ADX is below 20 and CCI is -66 on the 30 min. chart. Should see a early test of yesterday's high. If it breaks through I'll look to enter on a pullback to the 1148 - 1149 area. If not, then I'll look to short in the same area. If we get a pullback to around yesterday's low I'll look to go long. Should be fun today.
Missed the entry this morning because I was working hard on trying to make this method into a system. As usual, doing research during trading makes me feel like a moron. They say a picture is worth a 1,000 words. Well, here's the picture with my method applied as a system (so far) for this trade. :eek: :eek:
Time well spent though. If you can code the whole thing it will save you a lot of trouble in the future. Plus of course, you can backtest and optimize. MarkB
I give up. I spent all day trying to get this done as a model and made no progress. I'm going to suspend posting to this journal until either I can simplify it or I can define some rules that accurately reflect what this method does. Be back when I have something worth posting.
no_pm, For your own sake, please don't lose heart. You may have come across a set of indicators which work for YOU on a discretionary basis, but which cannot be quanitified to the point of becoming a mechanical system. It's more important that you are fully comfortable with what you're doing instead of posting here. Your input has been very valuable, and will be in the future, but not if it's jeopardizing your confidence. You have a great and rational mind. You'll find a level of comfort for yourself. Only then, if you wish to share your techniques, will and should you do so. All the best to you always, MarkB
I wonder what happened to that guy (no_pm_please).He was an excellent poster but I've seen no post of him since months.