ftse trading system advice

[selang]

Hi,

Ive been following some basic rules of a trading system for about a month and have made gains on my investment.

Im pretty sure you will have seen this system before of a variant of it and was looking for suggestions on how I might be able to improve either by using another indicator or paying attention to other factors.

Heres the setup

FTSE 100 Rolling Daily
5 Min Time Frame
Candlestick chart
MACD Indicator 12, 26, 5 H - bar

Buy / Sell when MACD moves from up to down and vice versa
SL 15
TP 10

- This works really well when theres plenty of volativity. Sometimes I can get as many as 8 wins in a row. However on a day like today its more difficult.

Can you give me any suggestions on how I might supress some of the losses.

Ideally I only want to trade when the risk to reward is at its highest - even if this means just one transaction per day or not at all if the market is gapping or really flat.

Thank you

 

[rawrschach]

... was looking for suggestions on how I might be able to improve...

Ditch the indicators.

 

[options]

Ditch the indicators.

Lol. Wasn't expecting that!

Best bit of advice ever given.

Take it!

Why do you need 'indicators' to tell you what price is already telling you?

Study price and it's reaction to itself.

 

[shadowninja]

Work out how you can know when you're not getting enough volatility.

 

[e-TraderUK]

Hi,

Ive been following some basic rules of a trading system for about a month and have made gains on my investment.

Im pretty sure you will have seen this system before of a variant of it and was looking for suggestions on how I might be able to improve either by using another indicator or paying attention to other factors.

Heres the setup

FTSE 100 Rolling Daily
5 Min Time Frame
Candlestick chart
MACD Indicator 12, 26, 5 H - bar

Buy / Sell when MACD moves from up to down and vice versa
SL 15
TP 10

- This works really well when theres plenty of volativity. Sometimes I can get as many as 8 wins in a row. However on a day like today its more difficult.

Can you give me any suggestions on how I might supress some of the losses.

Ideally I only want to trade when the risk to reward is at its highest - even if this means just one transaction per day or not at all if the market is gapping or really flat.

Thank you

Hi there,

8 wins in a row?, You must be really proud of that.

I use the system as well but I have noticed it works better for me in the mornings before the American markets open. My daily target for now is 20 pips which is two successful trades,, once i have that, then I'm done for the day instead of being glued to my computer.

I also use DMI indicator, when you have a signal to buy for example and the D1+ is above the DI-, this is a confirmation to go long and vice versa.

Goodluck

 

[Lee Shepherd]

Hi,

Ive been following some basic rules of a trading system for about a month and have made gains on my investment.

Im pretty sure you will have seen this system before of a variant of it and was looking for suggestions on how I might be able to improve either by using another indicator or paying attention to other factors.

Heres the setup

FTSE 100 Rolling Daily
5 Min Time Frame
Candlestick chart
MACD Indicator 12, 26, 5 H - bar

Buy / Sell when MACD moves from up to down and vice versa
:!:SL 15
:!:TP 10

- This works really well when theres plenty of volativity. Sometimes I can get as many as 8 wins in a row. However on a day like today its more difficult.

Can you give me any suggestions on how I might supress some of the losses.

Ideally I only want to trade when the risk to reward is at its highest - even if this means just one transaction per day or not at all if the market is gapping or really flat.

Thank you

Yo dude,

As you're new to this I will ask for confirmation first as we get mixed up here and before EVERYONE comments.

:!:What is SL 15 and TP 10

 

[selang]

Thanks for the replies -

I agree. it is about learning the market. Ive been doing this for £1 a pip on Capital Spreads for a while - but it seems that as soon as Ive upped the anti its not working as planned.

I think its mainly myself getting too stress/excited.

I would therefore like to try and take more of me out of the equation.

How can I measure ftse 100 volativity ( Not just by looking at charts, which is what Ive been doing )
I could do with a rule to state that I will not enter unless vol => x

With regards one particular reply

Yo dude,

As you're new to this I will ask for confirmation first as we get mixed up here and before EVERYONE comments.

What is SL 15 and TP 10


SL = Stop Loss
TP = Take Profit

- Im new here, is it safe to say that we avoid acronyms in future posts?

Finally, does anyone know of a dealer that offers spreadbetting and MT4? - Im kind of sick of these flash based systems

 

[Lee Shepherd]

Thanks for the replies -

I agree. it is about learning the market. Ive been doing this for £1 a pip on Capital Spreads for a while - but it seems that as soon as Ive upped the anti its not working as planned.

I think its mainly myself getting too stress/excited.

I would therefore like to try and take more of me out of the equation.

How can I measure ftse 100 volativity ( Not just by looking at charts, which is what Ive been doing )
I could do with a rule to state that I will not enter unless vol => x

With regards one particular reply

Yo dude,

As you're new to this I will ask for confirmation first as we get mixed up here and before EVERYONE comments.

What is SL 15 and TP 10


SL = Stop Loss
TP = Take Profit

- Im new here, is it safe to say that we avoid acronyms in future posts?

Finally, does anyone know of a dealer that offers spreadbetting and MT4? - Im kind of sick of these flash based systems

O.k, This is what I thought but didn't want to jump in with me size 9's just in case you called it something else.

I have identified a huge problem with this, and its obvious.

Stops (SL) @ 15 and Target (TP) @ 10.

If your system is 65% correct then you would still only break even (excluding spreads/commissions/tax ect), also, this gives you a risk to reward of -0.5(minus) Your risk/reward should be above 2.

This in principle means that if you risk 5 you ideally want 10 as a minimum.
You also have to allow for spreads/commissions/tax ect.

Clearly put, using this ratio will lose you money the longer you trade it.

 

[selang]

Stops (SL) @ 15 and Target (TP) @ 10.

If your system is 65% correct then you would still only break even (excluding spreads/commissions/tax ect), also, this gives you a risk to reward of -0.5(minus) Your risk/reward should be above 2.

This in principle means that if you risk 5 you ideally want 10 as a minimum.
You also have to allow for spreads/commissions/tax ect.

Clearly put, using this ratio will lose you money the longer you trade it.

Thanks Lee.

I agree with you regards win:reward. The problem is that the win rate is greater than 65% when the waves are rough. - But if you take a look at this AM 5min chart is really calm.

Im only opperating on a 5M chart so etending the paramaters isn't going to fit in. - I do totally see what your saying though.

---

I normally trade Forex intraday with wider TP and SL's - trades usually last a few hours to maybe a day or so.

Maybe when theres a flat spot I could open long and short positions and wait for a break out

Would anyone advise this?

 

[Lee Shepherd]

Thanks Lee.

I agree with you regards win:reward. The problem is that the win rate is greater than 65% when the waves are rough. - But if you take a look at this AM 5min chart is really calm.

Im only opperating on a 5M chart so etending the paramaters isn't going to fit in. - I do totally see what your saying though.

---

I normally trade Forex intraday with wider TP and SL's - trades usually last a few hours to maybe a day or so.

Maybe when theres a flat spot I could open long and short positions and wait for a break out

Would anyone advise this?

Mate, believe me, you dont get what I'm saying. You may think you do but you dont.

You're justifying it to yourself by saying that it's better than 65%, so what, that equation does NOT include spreads/commmission/tax ect. So, has to be better for obvious reasons. Plus you state its greater than 65% when 'the waves are rough', I assume you mean volatility, this being the case, how do you know when it's going to be volatile?? you enter your trade then it goes into overload or reverses. Either way, what I'm saying is that the longer you use that ratio the more you will lose over time.

So, you're a newbie and you trade forex as well, why not be a one trick pony and specialise in one specific area and become highly knowledgeable rather than a jack of all trades knowing a little about loads.

As for waiting for a 'flat spot' and going Short AND Long waiting for a break out, well, hopefully you'll understand when I say this:

 

[selang]

Mate, believe me, you dont get what I'm saying. You may think you do but you dont.

You're justifying it to yourself by saying that it's better than 65%, so what, that equation does NOT include spreads/commmission/tax ect. So, has to be better for obvious reasons. Plus you state its greater than 65% when 'the waves are rough', I assume you mean volatility, this being the case, how do you know when it's going to be volatile?? you enter your trade then it goes into overload or reverses. Either way, what I'm saying is that the longer you use that ratio the more you will lose over time.

So, you're a newbie and you trade forex as well, why not be a one trick pony and specialise in one specific area and become highly knowledgeable rather than a jack of all trades knowing a little about loads.

As for waiting for a 'flat spot' and going Short AND Long waiting for a break out, well, hopefully you'll understand when I say this:

okok.

So if you were forced to trade this type of system you would alter the parameters to

20 profit 10 loss

Or are you saying this is a bad system full stop?

 

[Lee Shepherd]

okok.

So if you were forced to trade this type of system you would alter the parameters to

20 profit 10 loss

Or are you saying this is a bad system full stop?

This is the least I would do. This then gives you a 2:1 ratio(r/r)

As for being a good or bad system is purely up to the trader.
A cake receipe can be given to many students but only a few will taste/look truely good. It's not necessarily the ingredients but more the chef. Of course you have to have basic sound ingredients to start with. A good idea on money management and risk/reward is only a few of the important things you need to master.

Read some more books on trading related issues. I wont recommend any as each to their own, one thing is for certain is the more you read the more you'll understand what you need and what to throw away.

 

[london_lad]

Is there a way to backtest this system? I have been using this system on demo account and occasionally with live if the buy signal coincides with MA3 and 18 crossovers. Works like a charm, but I know that risk reward ratio is not good, however, by eyeballing, if I change r/r ratio, the system spits out many loser trades.

I really would like to try this on either a longer timeframe, so like 30 minutes with 3 variation on MACD. Can anyone backtest this on 5 min chart data. Going back not long but just about a year or more maybe. Any pointers / hints in how to backtest would be useful. I just dont have experience or any clue of how to backtest with excel or any other softwares.

 

[rawrschach]

why are you ****ing with the system?

You have to account for probability when looking at R/R.

 

[london_lad]

rawr: It's called optimising. The losing trades pile up on some days and non-volatility kicks the hell outta your calls.

 

[virtuos0]

What confuses me is this.. what on earth would make someone think that they can just take a generic mechanical system like this that takes no effort to trade or put together, and make a profit from it? If something like this actually worked why would there be such a failure rate? No amount of tinkering will make this work because the fact is it's a pile of poop, it will work in some market conditions, and will fail spectacularly in others. At best this kind of thing will breakeven in the long term, and even that would be an amazing achievement.

Whereas a trader who puts years of effort into reading the flow of the market will be able to trade in all conditions and has the EDGE that is necessary to come out with a positive expectancy.

How about someone actually learns to trade for once!

Sorry

 

[london_lad]

virtuos0:

There is information overload when it comes to learning about trading. MA Crossovers, Camarillas / PDC pivots, True value range, Fibs, trend, EOD or intraday or both, etc, etc, etc.

Is there a library of approaches to trading. Most of the books I have read are too high level and over longer horizon about investment or are the ones who suggest huge drawdowns temporary losses before your call comes in positive territory.

I really appreciate your stance. Would be helpful if you could give at least some directions ? Which books to read? which courses to attend? which indicator/method to focus on for which markets/etc?

Btw, am interested in FTSE100 index trading and FX.

Thanks

 

[rawrschach]

Well, firstly, FTSE is for gays, it's a fact - no getting around it.

Crossovers are for paedos.

Camarillas can work, but most new traders expect price to touch a pivot and turn around and go back the other way 100 ticks - look for the ES tonight thread to read about trading around pivots.

Everything has its place; if you try to trade everything all at the same time you'll never learn anything.

 

[virtuos0]

virtuos0:

There is information overload when it comes to learning about trading. MA Crossovers, Camarillas / PDC pivots, True value range, Fibs, trend, EOD or intraday or both, etc, etc, etc.

Is there a library of approaches to trading. Most of the books I have read are too high level and over longer horizon about investment or are the ones who suggest huge drawdowns temporary losses before your call comes in positive territory.

I really appreciate your stance. Would be helpful if you could give at least some directions ? Which books to read? which courses to attend? which indicator/method to focus on for which markets/etc?

Btw, am interested in FTSE100 index trading and FX.

Thanks

I would start by reading the thread 'making money trading' by Trader_Dante, not necessarily for the method, but more for his attitude towards the market, discipline, clear plan, and what he has gone through to become successful.

It's a frickin' long thread but I read every last word of it, opened every chart posted, and took the time to make notes and think it all over. If you aren't prepared to make that effort then you're doomed to be a loser, DOOMED I TELLS YA!

Treat it like a business.

 

[london_lad]

Well, firstly, FTSE is for gays, it's a fact - no getting around it.

Crossovers are for paedos.

Camarillas can work, but most new traders expect price to touch a pivot and turn around and go back the other way 100 ticks - look for the ES tonight thread to read about trading around pivots.

Everything has its place; if you try to trade everything all at the same time you'll never learn anything.

Can you post the link for ES about trading around pivots? Also, will appreciate what would you recommend as a starting point?