For those new, the systems people are discussing are located on
the BLOG and in some of the intra week updates. Please do a
search on the BLOG, there are many examples and write ups about
them, however as of yet I do not have a page devoted to them.
However here's two updates from a couple weeks ago that might help
you as well.
Posted by kevinwalker on 5th of Nov 2008 at 06:48 pm
Matt,
I know you mentioned to go long SSO and QLD on a pullback in the
watchlist notes.
Do you still stand by that. The charts look like they have
damaged quite a bit. I`ve been waiting for a pullback to go long in
my IRA. But now, after today action, i am having second
thoughts
BTW thanks for replying to my PM on SRS yesterday. I was hoping
to get out breakeven because I entered at 113-114 level yesterday.
But I ended up making a killing.
kevinwalker- that's why in this market YOU MUST take partial profits
along the way; if you have 20% gains, take some off the table
because 20% or 30% gains can turn into 0% gains in a day or
two. This is not the kind of market where you buy and forget
about it, unless you want to give a really wide stop.
The charts are ok so far, we've only retraced about 38% of the
rally up, but a retracement below 50% then you have to ponder if
this is still a large 4th wave correction with a 5th wave move down
to new lows yet to come. The ideas on the Watch List are trade
ideas only and they are only for aggressive traders. Only
play a few of them at a time, have stops in place, and take partial
or 1/2 off the table on the initial move up because in this market
anything can happen.
for example, QLD was up 12% yesterday, but now it's down -0.9%
if you didn't take any off the table. DIG was up 20%
yesterday, but now it's only up 8.6% if you didn't take any off the
table before today. UYM was up 14% yesterday, but now it's
down -1.9% if you didn't take any off the table...you see what I
mean, take partial profits in this market, especially on the
initial moves.
Posted by kevinwalker on 5th of Nov 2008 at 08:22 pm
Thanks for that reply. I usually lock 50% -60% profits which I
did this time. But I have to admit that I am kind of surprised by
the action today. I did not expect a 5% drop.
BTW can you please mention the levels of the 50% retracement
Matt I had noticed
STLD on the watch list last week but this a.m. it is gone.
What has changed ? The stock appears to be setting up for a
possible breakout. Thanks.
I don't know, the programmer is working on the Watch List and
may have accidentally deleted it, I'll give him a call.
As far as the other ideas on the Watch List, I added new
comments to DIG, GDX, EWJ, and QLD, most appear bull flaggish so
far, but don't get complacent; and for now I would view further
consolidations or pullbacks as potential buying opportunities
finam- I'm leaving tomorrow and will be gone all weekend, I don't
think I'm going to have time to put together much on the systems, I
plan do do so, but I might not have time before I leave
System overview links
Posted by matt on 28th of Oct 2008 at 05:17 pm
For those new, the systems people are discussing are located on the BLOG and in some of the intra week updates. Please do a search on the BLOG, there are many examples and write ups about them, however as of yet I do not have a page devoted to them. However here's two updates from a couple weeks ago that might help you as well.
System update #1
System update
from Ravun....
The Definitive rules and results for the 7/21 EMA Mechanical System.
Table 1
Above is a simple table which I keep updated for the overseas indices I trade and
below is the table for the local index, the TOP40, which I use as a proxy to place trades on
the futures board, which is called the ALSI.
Table 2
Now I would like to take some time to explain what I do and use for the various
(overseas and local – South Africa ) to trade these markets.
1: Overseas
I use IGINDEX (A spread betting site which allows me to trade the Daily Cash – The Dow)
http://www.igindex.co.uk/
I do the same for the Dax and the FTSE.
I don’t use their charts or anything, I simply use them as a platform to trade. I use Esignal
and their charting software and I use the CASH (that’s the actual Dow, Dax and FTSE)
charts to place my trades. I have found from experience (especially locally in South Africa )
that using the cash charts provides smoother trades and less whip than trading using the
futures charts.
The other benefit to IGINDEX is that it allows me to profit tax free (I am a British citizen)
due tothe laws surrounding spread betting. I place (on average) £10 per trade, which means
for every point I make I gain £10. Is that simple, so you can see that (lets take this month
(October- see Table 1)) I would have made a total (across the board) of £113.100.00 ($194,532.80).
2: Locally
It works slightly different; here I trade (again using the cash chart on Esignal – called the
Top40) via brokers and place my trades directly on the ALSI (the futures market), the big
difference here is the awesome gearing. Again let me use take this month October (Table 2). For
every trade I gain R10 (A Rand is worth about $1) a point times the number of contracts
(usually 10). So the total for this month is a combined 5233 points * R10 * 10 (contracts)
equals a nett profit of R523.300.00 ($52,330.00).
The point that is important to understand (apart from being really profitable and you can do
the year to date figures) is that it works across almost all indices (and on stocks), BUT one
must use the CASH charts as your proxy, not the futures charts.
The System:
Is quite simple (and before I start, I have removed all offsets, to make it easier, one doesn’t
have to use them). You have:
1: A 7 EMA (Open+High+Low+Close)/4
2: A 21 EMA (Open+High+Low+Close)/4
So when the 7 crosses the 21 then you are on alert for what I call the confirming candle,
in the direction of the crossover.
EG:
Chart
In this example you will see that the 1 represents the crossing candle and the 2 represents
the confirming candle, now this is a clear cut case, where you can apply normal rules
because the market is moving fast. One can, at any time after the confirming candle is
higher (or lower on shorts), than the crossing candle take the trade.
Normally on the 5 min system I wait till around 3 minutes of the next five minute candle
(and 10-12 mins on 15 min system) before taking a position. Here it worked fine.
Below is an example of where you have to be more patient and often you will see me draw blue
horizontal lines; which serve to tell me at what point one can enter the trade.
This is the FTSE 5 min
Chart 2
As one can see I got a crossing candle at 1, and in the first min it was HIGHER and confirming,
but the market was slow and dogged and against the major trend and sure enough it failed and
carried on lower, which means you would have kept your short.
And finally here are examples of the ALSI (South African) 5 min, where it is important to draw a
line at the top (or bottom) of the crossing candles and wait for a break of each line for a trade.
Chart 3
NB: The crossing candle can be any colour
In each trade (long and short) above you can see 1 represents the crossing candle and 2 the
confirming candle, sometimes you can wait 2, 3 or 4 candles before it confirms or fails and
crosses back to the direction of your original trade. Only the last one here breaks cleanly and
gets you in on what I call a normal trade.
Well I hope this all helps.
Regards
Ravun.
QLD in watchlist
Posted by kevinwalker on 5th of Nov 2008 at 06:48 pm
Matt,
I know you mentioned to go long SSO and QLD on a pullback in the watchlist notes.
Do you still stand by that. The charts look like they have damaged quite a bit. I`ve been waiting for a pullback to go long in my IRA. But now, after today action, i am having second thoughts
BTW thanks for replying to my PM on SRS yesterday. I was hoping to get out breakeven because I entered at 113-114 level yesterday. But I ended up making a killing.
kevinwalker - that's why in this
Posted by matt on 5th of Nov 2008 at 07:24 pm
kevinwalker - that's why in this market YOU MUST take partial profits along the way; if you have 20% gains, take some off the table because 20% or 30% gains can turn into 0% gains in a day or two. This is not the kind of market where you buy and forget about it, unless you want to give a really wide stop.
The charts are ok so far, we've only retraced about 38% of the rally up, but a retracement below 50% then you have to ponder if this is still a large 4th wave correction with a 5th wave move down to new lows yet to come. The ideas on the Watch List are trade ideas only and they are only for aggressive traders. Only play a few of them at a time, have stops in place, and take partial or 1/2 off the table on the initial move up because in this market anything can happen.
for example, QLD was up 12% yesterday, but now it's down -0.9% if you didn't take any off the table. DIG was up 20% yesterday, but now it's only up 8.6% if you didn't take any off the table before today. UYM was up 14% yesterday, but now it's down -1.9% if you didn't take any off the table...you see what I mean, take partial profits in this market, especially on the initial moves.
Thanks for that reply. I
Posted by kevinwalker on 5th of Nov 2008 at 08:22 pm
Thanks for that reply. I usually lock 50% -60% profits which I did this time. But I have to admit that I am kind of surprised by the action today. I did not expect a 5% drop.
BTW can you please mention the levels of the 50% retracement
kevin - see my SPY
Posted by dodgerdog on 5th of Nov 2008 at 08:27 pm
kevin - see my SPY chart above for the answer to your question. The SPX 38.2% is at 946 and the 50% is at 927.
STLD
Posted by rbreese on 3rd of Nov 2008 at 11:24 am
Matt I had noticed STLD on the watch list last week but this a.m. it is gone. What has changed ? The stock appears to be setting up for a possible breakout. Thanks.
I don't know, the programmer
Posted by matt on 3rd of Nov 2008 at 11:48 am
I don't know, the programmer is working on the Watch List and may have accidentally deleted it, I'll give him a call.
As far as the other ideas on the Watch List, I added new comments to DIG, GDX, EWJ, and QLD, most appear bull flaggish so far, but don't get complacent; and for now I would view further consolidations or pullbacks as potential buying opportunities
Posted by jerry1 on 30th of Oct 2008 at 07:37 am
System trading/Platforms
Posted by dfwalsh97 on 29th of Oct 2008 at 11:35 am
Raven/Matt, which trading platform do you recommend that can automatically execute the trades for your mechanical system? Thanks
Title: Systems Matt: a One or
Posted by finam on 29th of Oct 2008 at 10:23 am
Matt: a One or 2 Page summary fo your system would be GREAT.
I have not yet set up IB or TD (but am lening towards IB) and Ninja.
Whatever you have as written guidelines for these would be a BIG help.
Thanks for all that you and Steve do for us. FinaM
finam - I'm leaving tomorrow and
Posted by matt on 29th of Oct 2008 at 10:32 am
finam - I'm leaving tomorrow and will be gone all weekend, I don't think I'm going to have time to put together much on the systems, I plan do do so, but I might not have time before I leave
Title: Matt's System Thanks Matt: Enjoy
Posted by finam on 29th of Oct 2008 at 11:20 am
Thanks Matt: Enjoy your trip. (and break)
Someone on the blog is sending me a 2 page summary tonight so I'll go with that.
FinaM