Registered User
Joined: 6/8/2006
Posts: 58
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Hi everybody
I was wondering if there was a kind soul out there who could assist me to devise a simple trading system? I have been a TC member now for 12 months. I think it's fabulous but I am now suffering from analaysis paralysis.I have read so many books; watched so many videos and attended so many courses that I don't know whether I'm Arthur or Martha!
I read the Knights' posts and Don's notes but the systems are all very complex. I had a very good and simple system while we were in a trending market but now it's got the wobbles my system is not appropriate and I'm finding it hard to make money.
Any assistance/suggestions/mentoring would be very welcome.
Thanks
Muniyba
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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This type of advice is beyond what we trainers can offer. I will move this to the Market Talk forum for you so others can offer their advice.
- Craig
Here to Help!
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Registered User
Joined: 1/28/2005
Posts: 6,049
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muniyba
If you don't mind. Could you describe your simple
system?
Also realize that the stocks you are selecting are
just as important as your system.
If we buy a $10 stock when a 5 day moving
average crosses a 20 day and it goes to
$14 a share.
Then we buy another $10 stock under the same
conditions and it goes to $8 a share.
Is it the fault of the "system" or the stock
we selected?
Thanks
diceman
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Registered User
Joined: 6/8/2006
Posts: 58
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Hi diceman
I use Sir Silent Knight's scan to give me a selection of stocks that are trending up. Then I use Multiple Moving Averages to select my stock. I don't know how to post an image or I would show you one of my charts. I set up in the middle window with price as a line in white. Then I plot the 3,5,8,10,12,15 day exp MAs in blue and the 30,35,30,45,50 and 60 day eMas in red. What I look for is a good separation between the red lines and a good separation between the red and blue lines. This is indicative of good investor support. What happens on the blue MAs is indicative of trader activity. If the blues dip which they do from time to time as traders take profits I can continue to hold as long as the trend line isn't broken and they don't fall over and begin to penetrate the reds. This is based on Daryl Guppy's Trend Trading system.
I haven't explained it very well but I hope you get the idea. There is a little bit more to it but not much.
Cheers
Muniyba
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Registered User
Joined: 6/8/2006
Posts: 58
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PS to the above post. the system is meant for trend trading. When the reds and blues are intertwined as they are at the moment, this system doesn't work - a fact that Guppy acknowledges.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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There was a lot covered on this system here:
http://www.worden.com/training/default.aspx?g=posts&t=18942
In this post an indicator was developed. Now known
as the "diceman indicator".
------------------------------------------------------------------
Check the reference here from hohandy. As to its
use for entry:
http://www.worden.com/training/default.aspx?g=posts&t=23605
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You can also check this out. How to measure
trend strength in the style of sir-fan -pattern:
http://www.worden.com/training/default.aspx?g=posts&t=25062
Thanks
diceman
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Registered User
Joined: 10/26/2005
Posts: 238
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Stock selection should start with a good quality scan. Sir Silent Knight's scan is fine. This an example of a simple system called Stoc. trap, MACD-H 5-35-1 above 0, stock above 50MA, Buy above close when Stoc 4-1-1 crosses down the 21 line, sell when crossing up 80 line.
Your system should be designed to fit you But it should be like this one, simple, clean and solid rules that do not bend. IMO, AB
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Registered User
Joined: 6/8/2006
Posts: 58
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Thanks AB I really appreciate your help and diceman too! I'll try to set these up and check them out. Still reading through all diceman's links.
BTW what is MACD-H and how does it differ from MACD?
Thanks again
M
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Registered User
Joined: 1/28/2005
Posts: 6,049
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MACD-H is the histogram.
MACD-H 100 is when you do a
visual sort and it has a
value of 100.
(it is at the top of its range)
Thanks
diceman
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Registered User
Joined: 6/8/2006
Posts: 58
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Thanks Diceman. Don't you ever sleep or are you in the Antipodes like me??
I tried setting MACD-H as AB indicated 5-35-1 but it doesn't show? I have visible checked and if the last number is greater than 1 it shows. What am I doing wrong?
Cheers
M
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Registered User
Joined: 6/8/2006
Posts: 58
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Registered User
Joined: 1/28/2005
Posts: 6,049
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Im not sure because I dont use 1
as the final setting.
But I think you will only see the
5-35 line. (if anything)
If you have trouble with the built-in
indicator.
It can be created with a custom indicator:
XAVGC5-XAVGC35
(select center zero line)
Thanks
diceman
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Registered User
Joined: 4/18/2005
Posts: 4,090
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I think the one is a typo ... try a 10 there I use macd 12,26,9 and machD H 12, 26,9 overlaid. Sometimes the histogram will point out activity the lines do not and viceversa.
these are common settings but they seem to work for me... pluss being common I get a sense of what the herd is looking at and making decisions on. if you want to speed it up a bit I use the spring summer winter fall concepts for buying on macdh. Basically a buy is earliest at spring which is MacDH bars begining to trend up but not yet above zero. Summer aslo a fine buy is from teh zero point up... fall is an early short period and winter is is below zero..... Most people, my self included use the centerline as the signal.... but I've read articles by "advanced" traders who suggest the above philosophy.
All indicators have their situations where they fail.... Tranding strategies are easier and tend to work better.... I've read that Macd dosnet work as well in a choppy market because it cant get a clean read on the swings.
If you are newer to trading i'd suggest for the moment wait and watch. Many of the best traders tend to spend large amounts of time out of the market altogeather as well... so I'm told. I know that a few of the ones I respect the most on this forum are all or mostly cash right now.
Go to the training video section on this web site and watch as many as you can... start with moving averages and macD videos.
gotta go
Scott.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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I have seen this before and
I believe it is 5-35-1.
Realize the histogram is created
by the difference of the last
average and the first 2.
If it is 1 (no smoothing). It will
be:
(5-35) minus (5-35)
which should equal zero.
(no plot)
Thanks
diceman
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Registered User
Joined: 10/26/2005
Posts: 238
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Diceman is correct, I should have explaned this one better. the PCF for MACD-H is AVG(AVGC5.35,1) > 0
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Registered User
Joined: 10/26/2005
Posts: 238
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muniyba to keep a clear head you need a simple trading plan made up and posted right above your trading computer here is a sample of what one might look like :
TRADING PLAN RULES
MARKETS: NYSE NASDAQ AMEX (MUST BE ABOVE 29 WEEK MA)
PRICE RANGE: $ 8.00 T0 $50.00
POSITION SIZE = ENTRY PRICE – INITINAL STOP PRICE / 2% OF ACCOUNT VALUE
STOCKS MUST BE:
TRENDING UP 20, 30, 50 150 MA UP (TSO)
GOOD QUALITY
RELITIVE STRENGTH MUST BE ABOVE 75
50 DAY VOLUME > 100,000
STOPS:
MAX LOSS = 2% OF ACCOUNT VALUE
BELOW SUPPORT - .06
EXIT:
IF CHART SHOWS SLOWING MOMENTUM
TACTICS:
DO NOTHING FROM 9:30 TO 9:40
ENTRY .06 ABOVE CLOSE
IF ENTRY IS HIT BEFORE 9:40 BUY 10:00 HIGH
MARKET NEWS GOOD FOR THE DAY (S&P FUTURES-TICK -ECT.)
CHETCH A BOUNCE OFF MOVING AVG
I. WEEKEND PREP
ASSESS MAJOR MARKETS: DOW NASDAQ S&P 500….........
• WHICH MARKETS LOOK GOOD FOR COMING WEEK?
• COMPARE 50 AND 200 MA ON INDEXES
• CHECK BROADER MARKETS IF MAJOR MARKETS OK
II. ASSESS INDUSTRY GROUPS
• LOOK FOR STRONG SECTORS
• LOOK FOR FALLEN ANGELS
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Registered User
Joined: 6/8/2006
Posts: 58
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Thanks AB. The tradig rules are good and I have developed some based on risk management etc. Yours are more explicit than mine and I think that's a good thing. BTW I tried your newest formula in the custom indicator but it didn't work. Anyway I tried the one diceman posted and that gives a good plot.
Thanks again everyone.
Cheers
M
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