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Fading the Open NQ
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Fading the Open NQ

  #11 (permalink)
Elite Member
Sydney, Australia
 
Futures Experience: Intermediate
Platform: Sierra Chart, IRESS
Broker/Data: IB, IQFeed
Favorite Futures: ES, SPI, ASX stocks, options
 
Posts: 399 since Jun 2015
Thanks: 169 given, 446 received

Save yourself time and pay for a proper feed and trading platform so you can test your hypothesis. You have to pay to play, especially in this game.

Patterns (presumably) happen all the time, whether there is an edge to it or not requires the work to find out.

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  #12 (permalink)
Elite Member
Berlin, Europe
 
Futures Experience: Advanced
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Fat Tails's Avatar
 
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If you want to fade the open of a bar, the final position of the Bollinger Bands for this bar is not yet known. You would either need

- need to use the Bollinger Bands calculated from the closes for the prior bar or
- have to calculate the Bollinger Bands from the opens for the current bar

In any case you need to make sure that the backtest does not use any information that was not yet available.

If you talk about an edge, this requires more than just an entry condition. You need to have criteria for both entry and exits, where exits must include both stop loss and profit targets.

The chart attached shows Bollinger Bands calculated from the open and 8 potential entries reflecting the idea. As you may notice the result will depend to a large extent on the exit strategy.


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  #13 (permalink)
Trading Apprentice
Washington
 
Futures Experience: Beginner
Platform: TWS
Favorite Futures: NQ CL
 
MNSTrading's Avatar
 
Posts: 17 since Nov 2015
Thanks: 3 given, 5 received

Update


So here's an update, it hasn't been long but I have been busy studying up on all the excellent advice given on this thread and some by Hobart on another thread concerning CCI. @PeakGrowth I do have an actual account and a proper feed. I did extremely well straight out of the gate as I seemed to have a talent for bear markets. When it changed to bull at the end of September I got slaughtered. I didn't know what I was doing, traded emotionally and lost the $10k I had made. At that point I went to SIM and sought advice here. I could say I should have started on SIM but it didn't happen that way. I did have the good fortune to see Adam Grimes webinar on here and that saved me from just blowing up my account right away.

In researching all the advice given, I have given up on the open and bollinger bands for now. The open is too choppy for my current level of experience and, as FatTails and others note, the bands form much differently live. CCI combined with price action seems to be a much better way for me to go and I have had some excellent success in SIM when I only takee the trades I feel solid about. My plan now is to continue SIM trading until I can prove some kind of edge, but to also trade the daily charts of the index ETFs with the principals I am using in futures on SIM. Unfortunately I don't have a fat bankroll so I've got this one chance to get it right.

Thanks again for all the advice. It's makes all of this seem a little less daunting, just a little.

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  #14 (permalink)
Elite Member
Sydney, Australia
 
Futures Experience: Intermediate
Platform: Sierra Chart, IRESS
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Posts: 399 since Jun 2015
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You've only posted 1 screenshot and it is of IB's paper trading account, I wouldn't consider that a proper platform/feed.

Proper platform/feed is when you go NT or Sierra Chart with an unfiltered feed like kinetick or IQfeed so you can do tick based back tests on your hypothesis and get a semi-realistic idea of whether you have an edge versus none if you just hand tested on IB's pretty crappy TWS platform and filtered feed. Your cheapest solution is NT/kinetick but SC/IQ or SC with their own feed which is quite cheap is even better.

Never ever trust hand based back tests, you will always bias and skip unprofitable trades you would have taken on the hard right edge versus the luxury of hindsight. It is almost inevitable this will happen unless you cover the right hand side without ever looking at it beforehand - even if you glanced beforehand you will be instantly biased.

Learn to code your basic rules and back test them with a machine.

Couple of things that should peak your curiosity (at least read about it, even if you don't like it):
- volume/market profile / probability distributions / standard deviations for trade location/context edge
- Price action / tape reading / cumulative delta / delta momentum for entry edge
- Tick / range (time unbound) charts

Price based indicators are meh at best. Volume based is better.

Good luck

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  #15 (permalink)
Trading Apprentice
Washington
 
Futures Experience: Beginner
Platform: TWS
Favorite Futures: NQ CL
 
MNSTrading's Avatar
 
Posts: 17 since Nov 2015
Thanks: 3 given, 5 received

I came across a thread on this forum recommending the very excellent book "Trading in the Zone". In the comments, when I bought it on Amazon someone wrote "Don't put in another trade until you read this book" I can understand why he said that and why psychology is more elusive and more subtle than anything else in trading. I love the idea of trading like a casino and taking the stress and addiction to market analysis out of the equation. I had heard that many people would rather be right about the market than simply make money, but never realized how deeply the need to be right is embedded in our subconscious mind.

I also downloaded and learned Sierra Charts. It is a wonderful tool and thank you to those who suggested it. I am currently using it to back and forward test my CCI related hypothesis and hone my theories into a reliable trading system. I am struggling most with when to take profits. I also got a new rug today. It really ties the room together.

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