You set an OCO order Doomberg - (One Cancels the Other). Not all brokers will allow you to do this.
You set an OCO order Doomberg - (One Cancels the Other). Not all brokers will allow you to do this.
Doomberg (very clever name by the way!), if we're talking tomortons v7 rules - i think im right in saying that he places an OCO order as jimmc mentions - one at the BBH+2, and one at the BBL-2. So if one order gets filled the other gets cancelled. As part of the OCO, he sets a stop and limit for each of the possible orders - 13points either side.
e.g. today BBR on Capital Spreads FTSE 100 Rolling was = 5986 - 6006
So OCO order was placed as
Buy at 6008, stop at 5995, limit at 6021
or
Sell at 5984, stop at 5997, limit at 5971
The sell was triggered (at 10am I think) so the Buy order is automatically cancelled and the price proceeds to hit the limit at 5971 making tomorton a happy man.
Capital spreads do an excellent demo platform for free - and allow OCO on iPhone 🙂, best way to practice.To be clear Doomberg – I trade a slightly different method to tomorton, but ive tried to explain his method here as he is the BB master.
Bartlby – good point about the MA – maybe we could use 5min charts and look at the EMA(13) at 9am?... don’t think its providing much useful information though – and probably just complicating matters. Any thoughts anyone? Can you explain your pivot point a little bit better? Not 100% on what you mean.
Has anyone ever toyed with the idea of changing the 1:1 ratio on this? i.e. making profit target 85% of BBR, and stop as 50% of BBR say? Something about that 1:1 makes me uneasy. But yet the short term results have been good so I’m reluctant to change!
e.g. today BBR on Capital Spreads FTSE 100 Rolling was = 5986 - 6006
So OCO order was placed as
Buy at 6008, stop at 5995, limit at 6021
or
Sell at 5984, stop at 5997, limit at 5971
The sell was triggered (at 10am I think) so the Buy order is automatically cancelled and the price proceeds to hit the limit at 5971 making tomorton a happy man.
Capital spreads do an excellent demo platform for free - and allow OCO on iPhone 🙂, best way to practice.To be clear Doomberg – I trade a slightly different method to tomorton, but ive tried to explain his method here as he is the BB master.
Bartlby – good point about the MA – maybe we could use 5min charts and look at the EMA(13) at 9am?... don’t think its providing much useful information though – and probably just complicating matters. Any thoughts anyone? Can you explain your pivot point a little bit better? Not 100% on what you mean.
Has anyone ever toyed with the idea of changing the 1:1 ratio on this? i.e. making profit target 85% of BBR, and stop as 50% of BBR say? Something about that 1:1 makes me uneasy. But yet the short term results have been good so I’m reluctant to change!
Hi Doylen
Well the pivot point idea would work like this - 1st calculate the pivot point for the day using yesterdays range - lets say the pivot is at 5500. Then we look at BBR - if BBR was 5470 to 5560 then 2/3 of it is above the pivot and we'd go long. If the BBR was 5440-5530 then 2/3 of it is below the pivot and we'd go short. If the pivot fell somewhere in the middle third of the BBR then we'd use the normal big ben rules.
In someways if one is using an OCO then there's no reason to bother with such a system and one can just let price action decide which way the bet runs. However if one could find some system that gave better probabilities of one's bet being in the right direction, be that a MA or pivot or something else then maybe one could increase the profit target and reduce the stop and give the system a better than 1:1 ratio.
I'm thinking I might try paper trading both the straight system and a modified system and see what happens. I'm away much of next week so might be the following week before I start but if I do I'll let you know what happens.
Well the pivot point idea would work like this - 1st calculate the pivot point for the day using yesterdays range - lets say the pivot is at 5500. Then we look at BBR - if BBR was 5470 to 5560 then 2/3 of it is above the pivot and we'd go long. If the BBR was 5440-5530 then 2/3 of it is below the pivot and we'd go short. If the pivot fell somewhere in the middle third of the BBR then we'd use the normal big ben rules.
In someways if one is using an OCO then there's no reason to bother with such a system and one can just let price action decide which way the bet runs. However if one could find some system that gave better probabilities of one's bet being in the right direction, be that a MA or pivot or something else then maybe one could increase the profit target and reduce the stop and give the system a better than 1:1 ratio.
I'm thinking I might try paper trading both the straight system and a modified system and see what happens. I'm away much of next week so might be the following week before I start but if I do I'll let you know what happens.
Many thanks all contributors today, I haven't been able to respond on time but we're all on the same page. I have to admit, the points target / loss are pulled out of the air - a net gain or loss of 13pts from an entry 2pts outside the BB range boundary seems to work pretty well but this can't be the only formula. So 14pts net from +/-2 (or 3), probably equally good, 15pts net from +/13 (or 4), probably equally good too.
Eventually, you will stretch the envelope to breaking point (a 60pt target will rarely be achieved in 1 session, and a BBH/L +/-20pts for entry will often not be triggered) but there's lots of room to play around with numbers within the envelope.
Playing with numbers is one thing but MA's? Well, that's another matter entirely. I agree with the sentiment - find a confirmational indicator that might reduce the number of false starts - but MAs lag so badly. Using a long MA brings in data from way before the proposed entry point, can't be relevant: short MAs are so volatile as to be probably poor signposts. But again, maybe somebody can keep digging here and turn up a golden signal.
Keep digging I would say.
Eventually, you will stretch the envelope to breaking point (a 60pt target will rarely be achieved in 1 session, and a BBH/L +/-20pts for entry will often not be triggered) but there's lots of room to play around with numbers within the envelope.
Playing with numbers is one thing but MA's? Well, that's another matter entirely. I agree with the sentiment - find a confirmational indicator that might reduce the number of false starts - but MAs lag so badly. Using a long MA brings in data from way before the proposed entry point, can't be relevant: short MAs are so volatile as to be probably poor signposts. But again, maybe somebody can keep digging here and turn up a golden signal.
Keep digging I would say.
Hi Doomberg - on orders - yes, as jimmc says, use an OCO order. If you can't watch the market continuously, which defeats a main advantage of BB, it's possible your entry could be triggered, then stopped out, followed by an entry triggered in the opposite direction: it's possible this could be stopped out too, for a risk double what you planned when you got up that morning, or it might restore your earlier losses. Either way, an entry on a failed BB, whilst being a strategy somebody really ought to explore, is uncharted territory so needs backtesting and cautious forward testing before it's added to the play book.
Good thoughts Bartlby on both pivots and making the trade asymmetrical so as to be better than 1:1 r:r. Mark Fisher advocates pivot zones in The Logical Trader, for his ACD trades, which are basically BBs by another name. However, he then goes on to use them to define the strength of a failed ACD/BB trade which triggers, then collapes back through the pivot zone and emerges on the opposite side, setting out that such a move seems very likley to continue even more reliably and strongly in the new direction. Seems good logic, though I can't utilise it as I am away from the charts by 0905hrs and a BB position could be stopped and reversed at any time after that.
Hi Doomberg - Long-term (about 37 weeks), I find a 63% win rate, though this has reduced to about 55% since the beginning of February - this might be due to the Egypt / Libya / oil etc. situation but also coincides with use of a fixed target/stop, so I await developments. Nevertheless, BB is still profitable for me over -
each month Q4 2010
Q1 2011
April 11
May 11 (so far).
Weekly round-up to follow over the weekend, when I would usually also put up performance over the last 4-week period.
each month Q4 2010
Q1 2011
April 11
May 11 (so far).
Weekly round-up to follow over the weekend, when I would usually also put up performance over the last 4-week period.
Hi Tomorton - do you have any rules about the size of the BB where trades shouldn't be placed - an earlier post mentioned not taking trades where the BB was very small. I looked at the BB this morning and found it was way beyond the pivot point so I'm back to the drawing board with regard to creating some sort of asymmetrical trading rules for the BB. I do think the idea is worth pursuing though.
took the trade this morning (regretting it already) - my numbers show it as 66% of ATR...
Which in itself doesn't seem a problem. Tomorton rightly points out that when the price is very near BBH or BBL at 9 the trade is unsuccessful - wonder if these need to be filtered...
We'll see how the day goes...
Which in itself doesn't seem a problem. Tomorton rightly points out that when the price is very near BBH or BBL at 9 the trade is unsuccessful - wonder if these need to be filtered...
We'll see how the day goes...
ouch down 51 today. Shows loss of 71 this week - up 228 in 8 weeks. Showing 6 winning weeks, 2 losing. by far my worst week this week (only other down week was -6!). Really bad trade today - i don't like going against the rules of the system - but i knew this was a loser right from this morning.
Bartlby, im using BBR as both stop and limit.... i've had a few very good wins when the BBR has been >50% ATR - so I'm not necessarily putting it down to this, but I do take your point. I think tighter stops might be better on large BBR as % of ATR morning. I'm so wary of introducing too many rules though! Some work to do next week on some refinements I think - busy weekend...hoping my luck changes for the ticket ballot today and the game on Sunday!
Bartlby, im using BBR as both stop and limit.... i've had a few very good wins when the BBR has been >50% ATR - so I'm not necessarily putting it down to this, but I do take your point. I think tighter stops might be better on large BBR as % of ATR morning. I'm so wary of introducing too many rules though! Some work to do next week on some refinements I think - busy weekend...hoping my luck changes for the ticket ballot today and the game on Sunday!
Good luck with the ticket ballot. I'm still thinking about what we were talking about yesterday with moving averages and pivot points. I'm sure its a good idea but it does make the whole thing more complex but might also provide useful filters - for instance todays BBL was around the level of Support1 suggested by using pivot points suggesting a bet in that direction was unlikely to work. My plan is to work out some rules and then make up a spreadsheet where I can simple enter the high and low of the BB and it tells me where to place stops/limits etc. Then of course we just have to test it to see if my refinements actually refine anything.
