发信人: cuguys (小眼睛),
信区: Stock
标 题: zt：Profitable Strategy for Struggling Traders
发信站: BBS 未名空间站 (Sat Jan 19 15:32:34 2008)

The intention of this post is to help struggling traders turn their trading around. It's my way of paying it forward and contributing to a board that consistently complaints about the lack of useful trading information.
The strategy works in most trending markets but with your help we can make agreat thing even better. It is by no means complete but very much functional and consistently profitable once some of the trader's skills are polished.
It's simply a collection of ideas, personal experience, trial and errors, backtesting and things I put together that changed my trading around over the years.
I'm open to suggestions and ideas on how to improve what I consider a very good system for daytrading the market. Particularly, the e-minis.
Let's try to keep it civil and friendly as my priority here is simply to help and improve the system. It's long overdo that I do some contributions and well, tonight is the night.
Hope it helps and since I designed it I will indulge myself by calling it, for now...
Anek's Holy Grail v 1.0 or AHG for short. As we improve it we can increase the version number. Rest assure, it's a good working strategy for trading and has been my bread and butter for quite some time. I see no reason for this changing.
Help me help you and feel free to help us help more by chipping in with ideas.
I shall begin by placing the first stone......
STEP 1 THE TREND
- Determine if there is a MEANINGFUL TREND present
There are two types.
The meaningful ones:
Downtrend = lower highs, lower lowsUptrend = higher highs, higher lows
The ones you should ignore (for now) because they require greaterskill to consistently profit from orsimply, the sideway ones:
Congestion/Indecision = higher lows, lower highs (Symmetric Triangleformations)Consolidation = horizontal lows/highs
As you get more experienced you can profit off consolidation by fadingsupport/resistance but for now, stick only tothe meaningful trends.
Again, as you get more experienced you can profit off symmetrictriangles (HL LH) because they tend to give birthto POWERFUL new trends but for now I would rather you stick to themeaningful trends.
STEP 2 ONCE A TREND HAS BEEN DETERMINED HOW DO WE PLAY IT
- If a MEANINGFUL TREND has been found we need a logical entry.
Let's start with the UPTREND.
We BUY a pullback and we are nimble with our target.
Where exactly ? Well, it can be a 50% Fib retracement from the recentHigh to Low swing, or stochastics crossing, whatever you feelcomfortable with. We take advantage of minor WEAKNESS in a STRONGTREND to get a good fill.
What's your target ? It can be a few ticks below previous resistance,it can be an upper bollinger band. This is entirely up to youand only in time you will master this. You could trail the stop toride those breakouts, all very discretionary.
Stop ? Whatever would make it a lower low aka a CHANGE of trend.
Now, lets talk about the evil twin, the DOWNTREND.
We SHORT a pop up and again, we are nimble with our target.
Where exactly ? Well, it can be a 50% Fib retracement from High toLow, Stochastics Crossing, whatever you feelcomfortable with. We take advantage of STRENGTH in a WEAK TREND toget a good fill.
What's your target ? It can be a few ticks above previous support, itcan be a lower bollinger band. This is entirely up to youand only in time you will master this. You could trail the stop toride those breakdowns, all very discretionary.
Stop ? Whatever would make it a higher high aka a CHANGE of trend.
Important, we never go against the trend. When the trend is strong webuy a pullback. When the trend is weak we short a pop up.No exceptions, don't play hero or Nostradamus. There is not a soul onearth who can predict the market consistently and what we want is consistency, so be smart about this.
If STOPPED OUT, meaning, a CHANGE of a trend, we stay ON THE SIDELINESuntil a NEW MEANINGFUL TREND is defined and we take our stoplike responsible traders. If we get faked out, so be it, plan yourtrade and trade your plan. Losses are inevitable and quitealright as long as we limit them to small numbers.
Who is our enemy ? You got it, REVERSALS. REVERSALS stop us out.Lucky for us, they are not very common which is exactly why thisstrategy works. Some days will be filled with them and sadly I don'tknow how to overcome this. On days like this, I lose money.
Surprisingly so, people call reversals all the time then you wonderwhy 90% of traders lose money ? We never call a top, we nevercall a bottom, we never say "Oh it's too high" or "It's too low", themarket has no boundaries. Yes, you heard that right, NO BOUNDARIES.There are so many variables in the market it is IMPOSSIBLE to predictaccurately on a consistently basis therefore the best I can do isexamine what is happening NOW and try to profit from some possiblevolatility and situate myself in a strategic place, with patienceand conviction.
STEP 3 INDICATORS
I'm not a big fan of technical indicators, mostly because I have nointerest in using something that tells me what happened 10 years ago.Price action is all I need and when using tick/share charts I don'tneed to use a volume indicator.
However, there are some I use for strength/weakness references,entries and exits.
For example:
BOLLINGER BANDS with 2.5 Standard Deviation. (I feel 2.0 gets hit fartoo often and distracts me with noise)
When price is continuously hitting a band, pay attention. It's tryingto tell you which side is stronger. If you are having difficultyidentifying the current trend or suspect a reversal, the constanthitting of a particular band can provide great info as to wheremomentum is headed.
TRENDLINES, as many as you need to determine the current trend.
STOCHASTICS, a cross can be a powerful tool when you are looking foran entry in a strong trend. I like 5,3,3 but use whatever you feelcomfortable with.
FIBONACCI RETRACEMENT LINES, my favorite. 50% from last swinglow/high and you got an excellent entry point. Problem is sometimes thetrend is so strong it won't even give you your wish and you miss the fill.
STEP 4 MONEY MANAGEMENT
As you get more experienced, I highly recommend you use an average upapproach. More on this later, until then, use the same car sizeon every play and for God's sake DO NOT AVERAGE DOWN unless you arejust trying to get fills for your intended car size, neversurpassing it. I previously stated and those that known me for awhile know I advocate averaging up. I feel this is an advanced moneymanagement technique and for now I am not disccusing it to avoidconfusion/mistakes.
STEP 5 DISCIPLINE
I'll be blunt. Trading is not for the irresponsible. Break the rulesand you will eventually lose big, period. Trading will forgiveyou if you were wrong on a play even several ones, it won't forgive or tolerateidiocy and stupidity. All I need to say on this and you have beenwarned.
STEP 6 CHART TYPES
Longbars are evil, therefore I highly recommend tick/share charts soyou can split that data and examine it with care. For the YMI recommend 75 or 89 tick charts. This differs greatly from oneinstrument to the other, the more volume/activity it has the greaterthe ticks size you will need. Use what you feel comfortable with.