Here's a quick video of a reversion to mean strategy that I've
been working on, the system identifies when price is too far from
the 5 and 9 EMA and then places an order at 50% of the candle
range, then puts an initial stop if filled and places a target near
the 9 EMA, watch the video. It's tougher to do than it looks,
but so far working pretty good
Matt, here's a question regarding the new reversion video: how
far away from the 5ema is "far enough?" Do you just look at white
space, or distance from the close of each green candle? Any kind of
objective definition would be most appreciated! (Your new video is
a 15 min chart, yes?)
I have a working set of rules for this strategy, and have paper
traded 1 contract for 2 weeks. So far, about 8 pts per week w/
e-minis. Taking profits at the 20ma, not the 9ema, however, as most
of the time price hits the 20ma. Better profits w/ 20ma so far.
Actually, holding until 2 ticks shy of the opposite BB is even more
profitable, but not enough data for that trade yet - doesn't hit
very often, but big pts when it does.
I find that distance to the 5 is rather subjective. The more the
better. But, I do like to have about 3x the distance from my entry
to my stop, to my 9 EMA. I want at least a 3x reward / risk ratio.
If that makes sense? And, also, enough room to my 9 EMA that I
break small symmetry is nice too.
That's interesting. The system I've been trading is not nearly
as extended. to the 9ema is about 1:1, and to the 20ma is about
2:1.
zenman are you using a 15 min chart? If so, I would think you
only get a trade meeting your 3:1 RR setup about 1x a week w/
eminis. Yes? So are you watching a number of instruments to get
more trade setups?
frtaylor, I am in a trade right now that meets that criteria. At
least athe time of trade, I had 3 to one. When the bar changed
over, the gap closed considerable. Looking through trades, there
are considerable 2 to1 trades. I like to see piercing of the bb's,
or closing outside the bb's, diversion neg or pos or hidden, trend
line support or resistance S3 etc. The more the better. Gold at the
moment is finally getting some diversion and is at S3 so looking
interesting.
I look at a 60 min and 30 min charts of 10 or so instruments. I
will zoom into a 15 min, or even 5 min chart if appropriate. I find
I get 6 or so trades per day, plus a few scalps off value area
highs and lows.
Right now gold will set up at 1174.5 on 30 min chart. We have
about 3:1. I got into oil this morning on a 5 min chart while
eyeing the 60 min chart. I have more than 3:1 on that. I took
profits just under the 5 EMA a little while ago.
That little gold trade went to 5 ema on 15 min where I took one
contract off. The other two stopped out at Break even and the tail
of the previous candle for a wash trade, btw.
Reversion to mean startegy
Posted by matt on 26th of Feb 2015 at 11:48 am
Here's a quick video of a reversion to mean strategy that I've been working on, the system identifies when price is too far from the 5 and 9 EMA and then places an order at 50% of the candle range, then puts an initial stop if filled and places a target near the 9 EMA, watch the video. It's tougher to do than it looks, but so far working pretty good
Video CLICK HERE
Matt, here's a question regarding
Posted by frtaylor on 6th of Mar 2015 at 08:24 am
Matt, here's a question regarding the new reversion video: how far away from the 5ema is "far enough?" Do you just look at white space, or distance from the close of each green candle? Any kind of objective definition would be most appreciated! (Your new video is a 15 min chart, yes?)
I have a working set of rules for this strategy, and have paper traded 1 contract for 2 weeks. So far, about 8 pts per week w/ e-minis. Taking profits at the 20ma, not the 9ema, however, as most of the time price hits the 20ma. Better profits w/ 20ma so far. Actually, holding until 2 ticks shy of the opposite BB is even more profitable, but not enough data for that trade yet - doesn't hit very often, but big pts when it does.
I find that distance to
Posted by zenman on 6th of Mar 2015 at 08:57 am
I find that distance to the 5 is rather subjective. The more the better. But, I do like to have about 3x the distance from my entry to my stop, to my 9 EMA. I want at least a 3x reward / risk ratio. If that makes sense? And, also, enough room to my 9 EMA that I break small symmetry is nice too.
That's interesting. The system I've
Posted by frtaylor on 6th of Mar 2015 at 09:41 am
That's interesting. The system I've been trading is not nearly as extended. to the 9ema is about 1:1, and to the 20ma is about 2:1.
zenman are you using a 15 min chart? If so, I would think you only get a trade meeting your 3:1 RR setup about 1x a week w/ eminis. Yes? So are you watching a number of instruments to get more trade setups?
frtaylor, I am in a
Posted by zenman on 6th of Mar 2015 at 10:06 am
frtaylor, I am in a trade right now that meets that criteria. At least athe time of trade, I had 3 to one. When the bar changed over, the gap closed considerable. Looking through trades, there are considerable 2 to1 trades. I like to see piercing of the bb's, or closing outside the bb's, diversion neg or pos or hidden, trend line support or resistance S3 etc. The more the better. Gold at the moment is finally getting some diversion and is at S3 so looking interesting.
I look at a 60 min and 30 min charts of 10 or so instruments. I will zoom into a 15 min, or even 5 min chart if appropriate. I find I get 6 or so trades per day, plus a few scalps off value area highs and lows.
Oh, and btw, since I
Posted by zenman on 6th of Mar 2015 at 10:07 am
Oh, and btw, since I am often getting into a 60 min chart trade by zooming into a smaller time frame, that gets me the 3 to 1 in many cases.
Right now gold will set
Posted by zenman on 6th of Mar 2015 at 10:27 am
Right now gold will set up at 1174.5 on 30 min chart. We have about 3:1. I got into oil this morning on a 5 min chart while eyeing the 60 min chart. I have more than 3:1 on that. I took profits just under the 5 EMA a little while ago.
Great information, thank you. I
Posted by frtaylor on 6th of Mar 2015 at 11:01 am
Great information, thank you. I really want to be settled w/ my final system by paper trading first. I have a couple more questions, so I will pm you.
That little gold trade went
Posted by zenman on 6th of Mar 2015 at 11:42 am
That little gold trade went to 5 ema on 15 min where I took one contract off. The other two stopped out at Break even and the tail of the previous candle for a wash trade, btw.
e-minis just went long 15
Posted by frtaylor on 6th of Mar 2015 at 11:52 am
e-minis just went long 15 min chart, on penetration of 1/2 of candle. About 2:1 to the 9ema, 4:1 to my standard target of the 20ma.
I'm watching gold as well.
Posted by zboy2854 on 6th of Mar 2015 at 10:55 am
I'm watching gold as well. Stop under the low at 1172.50?