Linkon's guppyBB system...!

[jagankris]

Dear Linkon ji,Tnsn,

Pls find below the charts regarding sideways.
Before we take it forward.

http://img259.imageshack.us/img259/2469/sidewaysn.jpg

ADX chart - Violet indicates sideways.
Also PDI,MDI less than 15 also indicates sideways.
I have to fune tune the adx - matching various conditions.
Note the low bull bear volume in the last column of the chart below ADX.

I think we need to include several combination of volatility RSI,Stoch readings,ADX and aslo volume before coming to a conclusion of sideways markets.

I request all the senior members to come out with their inputs in this regard.

TIA.

 

[jagankris]

Problem with adx indicator is that, it lags. By taking the ema of the adx,pdi and mdi... we can smoothen it but we are delaying the signals even more.

One way of trading DMI is by noting the crossover of pdi and mdi, that bar's high / low plus filter is entry for the next bar.

Adx helps in exit. as long as adx is rising... hold on to the trade.

drawing trendlines on pdi / mdi is a good signal also...it lead price by 1 bar atleast...

Dear Linkon ji,

The idea to add ema to PDI and MDI is not to smoothen but to catch the reversal early.

PDI > MDI is lagging but by adding ema's the lag could be reduced.

For example - PDI < EMA(PDI) and MDI > EMA(MDI) indicates reversal.
I tried to combine various conditions.

 

[linkon7]

Dear Linkon,

After a lot many years, I came to a conclusion that there is no indicator which will foretell you the timing of the desired movement. Until I started 'feeling' the pulse of the market. No not through news and impact of global developments etc, but purely on the basis of simple charts for different TFs. IMO there is no other way but this 'unprofessional way' to time the movement.

With all the indicators, formulas, and programming, codes we are just beating around the bush, just feeling that we are near the destination, which is not to be.

Eyeballing is necessary and only an experienced eye can detect the move early and quite often precisely. And IMO this is the hard fact. You would be surprised to know that I do not use any charts except of a simple CS charts (ofcourse of multiple TFs, simulatenously) and decide on the entry and exit. To be precise, for me it is just the THREE preceeding candles do it all, all other candles are only for purpose of knowing the primary direction of the trend.....

Ok, won't interput your flow further. But thought I would say this after I saw your comments in your above post.

Regards,

comments and discussion are always welcome...!

Mechanical vrs discretionary methods is a big debate. Both methods needs well defined entry / exit / SL / direction. The same method gives different results when the number of lots traded increases. The human emotion factor goes up with increase in volumes and this forces many eye ballers to shift to mechanical.

Developing a good mechanical system is far more tougher than eyeballing. Simply because following the rules become tougher with mechanical. like today, my system gave a exit for my shorts carried from yesterday at 5414... it gave a short at 5459 and an add-on short at 5478... sl came at 5522... I could have easily avoided the add but the moment i try to second guess the system, i would defeat the very purpose of shifting to mechanical. I enjoy trading stress free and if that means bearing a loser... i will gladly do it... simply because i know end of the month i will remain positive.

lack of thinking during trading hrs is what differentiates mechanical from discretionary. Some times its the smart thing to do and ley the law of average take care of the profit....

 

[linkon7]

Dear Linkon ji,

The idea to add ema to PDI and MDI is not to smoothen but to catch the reversal early.

PDI > MDI is lagging but by adding ema's the lag could be reduced.

For example - PDI < EMA(PDI) and MDI > EMA(MDI) indicates reversal.
I tried to combine various conditions.

I have already tested this method long time back. Method was good... i forgot why i gave it up. I remember using BB(5,0.5) instead of ema. Problem is when we have a one direction move...all such indicators are king, but when it comes to choppy market, it has a habbit if tossing u around. do let me know what you experience has been so far....!

 

[tnsn2345]

comments and discussion are always welcome...!

Mechanical vrs discretionary methods is a big debate. Both methods needs well defined entry / exit / SL / direction. The same method gives different results when the number of lots traded increases. The human emotion factor goes up with increase in volumes and this forces many eye ballers to shift to mechanical.

Developing a good mechanical system is far more tougher than eyeballing. Simply because following the rules become tougher with mechanical. like today, my system gave a exit for my shorts carried from yesterday at 5414... it gave a short at 5459 and an add-on short at 5478... sl came at 5522... I could have easily avoided the add but the moment i try to second guess the system, i would defeat the very purpose of shifting to mechanical. I enjoy trading stress free and if that means bearing a loser... i will gladly do it... simply because i know end of the month i will remain positive.

lack of thinking during trading hrs is what differentiates mechanical from discretionary. Some times its the smart thing to do and ley the law of average take care of the profit....

Dear Linkon,

Absolutely right approach for mid and long TF tradings / investments. Incidently, the decision making for my mid / long TF trades comes from some very simple techinques based on EMA and couple of propritary mathematical models based on relative strength and rate of change of prices. These are purely mechanical approach but the TF are very long ranging from 3 months till 6 to 9 months.

For intraday and shorter TF less than a week holding periods, the best thing I have is the fund allocation is always constant so there is no pressure on the volume change. The profits are withdrawn and pooled for longer TF investments based on mechanical approach. These mid and long TF trades are non leveraged or extremely moderately leveraged, hence there is no pressure in any terms.

I would be covering a few of these topics in my thread in the Beginner Guide section, hope you could visit and give valuable comments/feedback there.

Regards,

 

[linkon7]

Dear Linkon,

Absolutely right approach for mid and long TF tradings / investments. Incidently, the decision making for my mid / long TF trades comes from some very simple techinques based on EMA and couple of propritary mathematical models based on relative strength and rate of change of prices. These are purely mechanical approach but the TF are very long ranging from 3 months till 6 to 9 months.

For intraday and shorter TF less than a week holding periods, the best thing I have is the fund allocation is always constant so there is no pressure on the volume change. The profits are withdrawn and pooled for longer TF investments based on mechanical approach. These mid and long TF trades are non leveraged or extremely moderately leveraged, hence there is no pressure in any terms.

I would be covering a few of these topics in my thread in the Beginner Guide section, hope you could visit and give valuable comments/feedback there.

Regards,

there is so much to learn and i remain thirsty for more....! I would love to hear about your mathematical model...!

 

[tnsn2345]

there is so much to learn and i remain thirsty for more....! I would love to hear about your mathematical model...!

On that thread, I have one topic called 'Don't Learn' (ideally it should have read as 'Stop Learning') I am yet to write you that topic. I got reminded of that topic seeing your above post.

Also at the end of covering all those topics, I may touch upon some of different real practice TF trading models and there I would write briefly about this mathematical model, which I have been using since quite a long time now.

Regards,

 

[linkon7]

On that thread, I have one topic called 'Don't Learn' (ideally it should have read as 'Stop Learning') I am yet to write you that topic. I got reminded of that topic seeing your above post.

Also at the end of covering all those topics, I may touch upon some of different real practice TF trading models and there I would write briefly about this mathematical model, which I have been using since quite a long time now.

Regards,

I remember one mentor who said that all we need is master one pattern to make a living. We need to breathe that pattern and make it second nature. Its true if i plan to trade multiple scrips and wait for that pattern. But since i trade only nifty, one aspect of trading doesnt help that much. Trading logic has to take into account all the 6 type of days that can develop.

That quest began with a huge collection of systems (over 12 K afl at one stage) over a period of 2 years. Then the process of mix and match took over. At one stage, all of these systems appeared the same. all trying to capture the trend or fade the extreame. That when i shifted to trading price bars as indicators lost its importance.

As long as trading volumes were low... results were good. Big volumes bring stress into the picture and now its back to mechanical. Now the trading process has become stress free and sometimes i carry a trade to the stoploss point simply because system said so. I innitiate positions that normally i wouldnt by watching the price bar alone. surprisingly... most of these trades turn out to be multi baggers...

fear of end result has finally been overcome..and that is a personal milestone...! process of learning still continues....!

 

[sumosanammain]

Dear Linkon ji,Tnsn,

Pls find below the charts regarding sideways.
Before we take it forward.

http://img259.imageshack.us/img259/2469/sidewaysn.jpg

ADX chart - Violet indicates sideways.
Also PDI,MDI less than 15 also indicates sideways.
I have to fune tune the adx - matching various conditions.
Note the low bull bear volume in the last column of the chart below ADX.

I think we need to include several combination of volatility RSI,Stoch readings,ADX and aslo volume before coming to a conclusion of sideways markets.

I request all the senior members to come out with their inputs in this regard.

TIA.

Yes you may also need to confirm with with DPO, MFM, EOM, HPI, Mass Index, PVI< PVT, and RMI. When all these are in confirmation, then the markets are in a trending phase..... though this would occur roughly once in 76 years, that too on a sunday.

Come on guys, the more the indicators, the more quickly you will have to replenish your account. Or as they say, you will have that many more reasons to blame the market. Indicator facination lasts for about 3 to 5 years. And if the trader survives that period with still enough capital to trade, then he starts real learning.

 

[jagankris]

Yes you may also need to confirm with with DPO, MFM, EOM, HPI, Mass Index, PVI< PVT, and RMI. When all these are in confirmation, then the markets are in a trending phase..... though this would occur roughly once in 76 years, that too on a sunday.

Come on guys, the more the indicators, the more quickly you will have to replenish your account. Or as they say, you will have that many more reasons to blame the market. Indicator facination lasts for about 3 to 5 years. And if the trader survives that period with still enough capital to trade, then he starts real learning.

So what is the solution ?

How to identify or avoid day trading sideways.