Has anyone ever heard of Felton Trading? (www.feltontrading.com) | Trading Reviews and Vendors


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Has anyone ever heard of Felton Trading? (www.feltontrading.com)

  #290 (permalink)

Mercer Island WA
 
Trading Experience: Advanced
Platform: Ninjatrader/Strategy Desk
Broker/Data: Various
Favorite Futures: TF/NQ/ES/Stocks
 
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Posts: 561 since May 2010
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nakachalet View Post
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but then again, @djkiwi, do you thnik there are ligitimate vendors out there who have more than one so-called holy grails?

and is it plausible that the trader/vendor is willing to just part with the oldest one and withhold the most recent discoveries?
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Hi, I think nearly all vendors are failed traders who often have better sales and marketing skills than trading skills. It's like the guy who wanted to be a pilot but didn't qualify and ended up as an aircraft engineer to at least be close to the action.

Vendor products are sadly directed at novice traders who unfortunately do not know any better and greed overrides their normally sound judgment.

To answer your question specifically I've had a quick look at Felton trading's website and would put forward the following points for comment. Comments will relate to the following excerpt:

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1. Quote one highlighted - "the method itself often pinpoints the exact minute and second that the market is going to make a move".

Of course any trader with even a small amount of experience would recognize this claim as nonsense. Even the "smart money" do not know when the move will take place and will scale into a position around their preferred entry range.

Now of course if the Felton method was able to identify moves to the exact minute and second do you think the inventor would be telling you about it or trading on sim?

2. Quote 2 - "Stops are never more than a point in the Russell 2000".

This is also an interesting public statement. Tight fixed rate stops without considering volatility is often a proven recipe for disaster. Death by 1000 cuts.

To illustrate this, I've attached a volatility analysis of the Russell 2000 over the last 3 years based on the morning trading session. It shows the percentile volatility for each 30 minute period. I've highlighted the median (50th percentile) for each half hour period (in points) being 5.9, 4.8, 4.2 and 3.4. So as the day progresses we can see volatility decreasing.

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"Now based on Felton's 1 point stop method the probability of being stopped out in a trade held for more than 30 minutes is well over 90%".

You can see even the bottom 10% from 7.00am - 7.30 am is 3.0 points. So this means that only 10% of trades have an ATR of 3.0 or less.

3. Quote 3 - "capture larger market moves with a special trailing stop technique that is only taught in Felton trading"

Based on point 2, you would not be able to capture any large move because you would be stopped out with the volatility. The "special" trailing stop is simply a marketing ploy aimed at beginner traders. As we all know here, a trailing stop isn't special.

The other point to consider is the Felton method is a scalping method which competes with the autobots. I estimate retail scalpers scalping between 6-18 ticks on TF lose an additional 15-26% of each trade due to slippage and commissions. This is akin to taking your "zero" on a roulette wheel and adding another 7 zeros. Would you play roulette with the house sporting 8 zeros? The problem with scalping is you need an extremely high winning % just to cover your commissions and slippage.

In summary, I cannot say whether a trader would be consistently profitable if they took every trade on the Felton system. However, there does not appear to be anything special that would provide an edge to the trader. Furthermore systems that ignore volatility can get chopped up and slippage and commissions would likely further erode any profitability.



Cheers
DJ

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