101 ways to kill a cat

Whilst the lulzy content keeps a smile on my face (and a sore modding finger) it'd be nice to have some trading chat. It's always intrigued me the different ways people find to trade and I thought it would be interesting to talk about the different strategies we use.

So, to kick off, here's mine:

1. For my serious stuff (for well over 30 years now) mine is a retracement strategy. I'm looking for trend continuation after retracement and my vehicles are UK equities. Potential trades are identified from daily with entry and exit set-ups established on 1H and triggered on 15M.

2. For my play stuff (becoming a bit more serious) I exploit the FTSE/DOW relationship with contrary trades after periods of FTSE relative strength or weakness during the day. I use numbers rather than charts.


What's yours?

good trading

jon

Same as yours but using specific candle formations, S&R, and for the past week or so bollinger bands and ATR as well. Contrary to you I've had an actual strat for about a month and busy refining it.

just you and me trading then, iota - well i tried, but lulz wins

jon

Excellent thread idea Barjon buy why the hell you expect anyone to share their precious "strats" is beyond me.

Though you have to admit that flaming a mods thread is admirable.

trend trading via pullbacks.

I am not clever enough to know what the experts are thinking. (market info)
I am not clever enough to know which direction the market will go. (I am not into predictions)
I am, however, clever enough to follow the big players once they show their hand.

Following on from that;
I wait for the market to show direction on a largish TF.
I then seek out pullbacks (these days small congestion points as well), and look to jump onto the ride, using a smaller TF for entries.

In a nutshell, having defined a direction by the big players, I will look to buy into an uptrend by looking for oversold conditions on a smaller TF.
In an downtrend, I will look to short by selling overbought conditions on a smaller TF.

Weakness in my trading is getting left behind on ballistic moves with no pullbacks.

No moggies get killed in my trading.

scose

I'm not suggesting anyone shares the details of their strategy, just the broad outline. It's hardly giving anything precious away for someone to say that they trade reversals using a 1H time frame is it?

jon

barjon said:

scose

I'm not suggesting anyone shares the details of their strategy, just the broad outline. It's hardly giving anything precious away for someone to say that they trade reversals using a 1H time frame is it?

jon

Click to expand...

Godamn! Shuuuuuuush!

Serious stuff: fundamental analysis / valuation to draw up a shortlist (this is necessarily hit and miss because of the impossibility of tracking the entire universe of stocks), entries and exits through very basic TA (eg S/R from eyeballing a chart. Medium - long-term timeframes.

Fun stuff - scalping index futures.

Wow, I can't believe my strategy is similar (well, sounds similar to all yours) too.

I trade pullbacks too. But I think my system is different to all yours in that I use the 1min TF only and trade quite aggressively by adding to my position at each pullback. Position size and SL and TP are adjusted accordingly to suit the 1min TF. When price hits my SL then I know the trend is tiring and is almost over. 'The trend is your friend until it reaches the bend' ^^,

Here is a very easy trade I did yesterday:

Someone sold 11 000 lots of March 12 Short Sterling at 14. That's a very large trade for a sterling outright. Because I know the evil algos that run that market teh majority of the time "think", I knew they'd dump a little bit at 13 (they did) and then manipulate it up to 14 to see if they can a) get the market moving up and if not b) at least dump a bit of their inventory to idiots, before then assuming the big trader is right and trading in his direction.

Now a) isn't going to happen because the market is coming off for a host of reasons (ECB tomorrow (i.e. today) being a major part of it so no one wants to be long fixed income (for what we can now see is very good reason) as well as sterling PMI plus a general downward trend) so I instead take the opportunity to sell 14s... in my role as an individual liquidity denier*

Of course very shortly afterwards we're trading 12 and I'm out there, as algo (and others who are longer than they want to be) gets out.

Now a slight digression... you may wonder why if people have a problem being long there, why on earth were they on the bid? Well there's two major reasons. Firstly that level caused a lot of calendar spreads to trade as well, as I believe it was actually 15 before hand and someone just went to market with a load of size, so they bought in other months two. Secondly, many traders and almost all algorithms put more on the bid than they actually "want", as the market are usually pretty slow and 15s would trade again before the 14s would trade out... so by bidding for too much (the fill algorithm is not quite pro rata but for simplicity let's call it that) they can buy what they want if 14s partially trade, then pull the order.

Is that my only, or even my main strategy? No. I trade order flow and news. But that's an example of how to trade using order flow, backed up with a knowledge born of experience about how the market behaves.

*My little joke... officially locals on liffe are "individual liquidity providers"

H1M1, it's a flu virus. Daytrade UK100 index. Buy support, sell resistance. Used to do US equity indices, but couldn't be bothered waiting for the chinese dentist everyday(tooth hurty). Makes sense.

arabianights said:

in my role as an individual liquidity denier*

Click to expand...

I trade U.S. stocks intraday - never hold anything overnight. Not really comfortable with the overnight risk, e.g. market gaps.

I trade chart patterns. But since chart patterns cannot really give anyone a long-term edge, I use the order flow on level 2 and time and sales to confirm an entry. In effect, watching the order flow helps me confirm the story on the chart and time my entries/exits.

My morning trades are usually trend following trades, with reversal trades becoming more common after about the first hour.

I take trades completely at random, in a randomly selected direction. I use a PNN based system to determine a trend bias. If my random direction matches the PNN prediction, I risk 2%, if its against the PNN prediction, I risk 1%.

Losing trades are closed fairly promptly, If after a predefined period of time I'm lucky enough to have caught a trend, I'll trail a stop.

The clever bits are the PNN (although a 2 year old can tell if somethings moving up or down), and of course the exits, particularly knowing what constitutes a winning or losing trade from 'noise'. Most of this stuff is automated, but if I'm around to overide the trade management and markets are trending I'll manage the exits manually. Day to day trading has long since become more of an exercise in statistical process control.

If I'm really bored, or lulz at T2W are in short supply (or I'm temporarily banned for undermining T2W) I trade a couple of bbmacs trend reentry type setups just to keep my hand in.

the hare said:

I use a PNN based system to determine a trend bias. If my random direction matches the PNN prediction, I risk 2%, if its against the PNN prediction, I risk 1%.

Click to expand...

Hi the hare,
PNN?
Palestine News Network - Policía Nacional de Nicaragua or is this something to do with Probability & Neural Networks?
Tim.

lots of rep being strewen around here barjon!

arabianights said:

lots of rep being strewen around here barjon!

Click to expand...

Just thought everyone deserved a thank you, Arabian

Jon

hehe thought so... that was first serious post I've made in the last thousand so I'm just pointlessly padding the thread

arabianights said:

hehe thought so... that was first serious post I've made in the last thousand so I'm just pointlessly padding the thread

Click to expand...

...and it was worth the wait Just goes to show that the king of lulz is quite a sharp operator after all.

Jon

barjon said:

...and it was worth the wait Just goes to show that the king of lulz is quite a sharp operator after all.

Click to expand...

We all know that he is, which makes the excessive lulz to quality post ratio all the harder to stomach.
that's for you Dave!
Tim.