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Fading the Open NQ


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Fading the Open NQ

  #1 (permalink)
 
MNSTrading's Avatar
 MNSTrading 
Grand Rapids, Michigan
 
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So this is what I want to do; I want to fade any open that crosses the Bollinger band and buy/sell on the return, ride it to the moving average and then up to the opposite band if it will go. Using 10 minute candles in 90 days of backtesting, this method is about 90%, but here's the catch...

Its backtesting and the bollinger bands have already formed so they will look different as they are forming in live trading. How do I formulate a buy signal? Do they have to cross and return 5 ticks for example? In a creeping open like today, where do I buy? Hopefully someone has an idea on this.



Also what should my band settings be? I have 20 with 2.0 deviation now.

Thanks!

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  #3 (permalink)
 PeakGrowth 
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So.... why don't you test your hypothesis' and answer the questions and let us know how you go? Isn't that the point?

IB paper trading account is not reliable. Whatever results you get now will be vastly different to when you trade cash.

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  #4 (permalink)
 
Inletcap's Avatar
 Inletcap 
Murrells Inlet SC
 
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Very likely that your bands are calculated on the close of the bar so you are essentially asking to place a trade in the past which would of course be a great trade more than 90% of the time. It's much more difficult on the hard right edge of your screen

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  #5 (permalink)
 
MNSTrading's Avatar
 MNSTrading 
Grand Rapids, Michigan
 
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Inletcap View Post
Very likely that your bands are calculated on the close of the bar so you are essentially asking to place a trade in the past which would of course be a great trade more than 90% of the time. It's much more difficult on the hard right edge of your screen

Yes, exactly Inletcap. I just came up with this edge yesterday and do not have a platform to backtest in real time yet so I will have to forward test starting with today's open. I suspect I will not approach 90% in real time, but even 50% with the constancy I'm seeing would be fine. I will keep you all posted. Anyone have suggestions on Bollinger settings?

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  #6 (permalink)
 
MNSTrading's Avatar
 MNSTrading 
Grand Rapids, Michigan
 
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PeakGrowth View Post

IB paper trading account is not reliable. Whatever results you get now will be vastly different to when you trade cash.

How is the papertrading different? It seems the same to me as when I was trading cash (without the emotional rollercoaster). I made $600.00 on 2 NQ trades on paper yesterday on that rally you see above and the subsequent drop. Are you saying it would be a different number in cash? Why?

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  #7 (permalink)
 
Big Mike's Avatar
 Big Mike 
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MNSTrading View Post
Yes, exactly Inletcap. I just came up with this edge yesterday

Correction.

You just came up with a hypothesis that you've not tested and should have absolutely zero reason to believe it contains an edge until proven otherwise. In fact, you should assume it is negative expectancy until proven otherwise.

Mike

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  #8 (permalink)
 tradentravel 
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You will save yourself a lot of time if you skip lagging price based indicators. Start looking at context and price action. I suggest FT71 as a source for beginning to understand those terms.

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  #9 (permalink)
 
MNSTrading's Avatar
 MNSTrading 
Grand Rapids, Michigan
 
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that's an excellent point Mike. I wish it were an edge, but certainly cannot claim one at this time. I'm hopeful that something useful will come of my hypothesis, there's a good chance my failure to gain a proven edge at this point stem from over reliance on indicators, particularly lagging ones.

Tradentravel, what is FT71?

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  #10 (permalink)
 tradentravel 
Phoenix AZ
 
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Futures Trader 71. He does a daily review of market context before the opening bell. Look him up on twitter. He also has several webinars here on futures.io.

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