Before this thread I would have agreed with you 100%, but at least for now simply filtering on instrument, time frame, and times of the day combined with good money management seems to be providing profitable results. I have been looking at this and there are many inside bars that I would have never considered taking before, but with 8/16/+1 atm, these trades are working. For how long, who knows, but I don't see anything wrong with taking advantage while it is working.
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Thanks FT, your insight is very valuable and these are some filters I'd like to research some more with my backtesting. I am not convinced I have a statistical edge, but my testing leads me to believe that I do, at least in the short-term, so I roll with it. I appreciate your skepticism and concern for what we're doing because it keeps me on my toes and motivates me to make the systems perform better.
While my trading results may never be as impressive as yours the thing I like about what I do is that my trading happens while I'm asleep, while I'm working, while I'm driving on the freeway, spending time with my family, on vacation or anywhere else I may be while the markets are open. I actually spend more time on futures.io (formerly BMT) than I do watching charts or a DOM in real time, though I do read a lot of charts post-mortem.
So even if I eek out small to moderate profits I'll be content. In the meantime I'll continue to improve them by coding more sophisticated filters and more exhaustive testing. And I enjoy the challenge of "hacking the markets" and always learning something new about trading so I'm good with the path I'm currently on.
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I am trailing the second half of my second position, until I have a clear sign (volume) that the move is exhausted. Still I am not happy with this, as often I am either getting stopped out or I am taking profits early.
I still need to find a better method to exit the second half of my position.
The first half position is easy, as I just wait for the target or the stop to be hit, whatever comes first.
actually I am not trading CL, but I am trading 6E (European morning) and YM or ES (European afternoon). I intend to switch at some point, but currently this is not compatible with my risk allowance.
I have tried inside bars on ES and YM and the results were not as good as I had hoped.
As the approach looks valid to me - enter the market during low volatiity - I just worked on it. I think it will give a real edge, if combined with other rules, so I am currently looking for filters to sort out the bad trades. As you can see from my post, they are not formalized yet in a way that I can backtest them.
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This is one reason I like target-based trading. Sure, you sometimes leave a lot on the table, like I did this morning, by getting out too early, but every trend-trading system I've looked at has exits that also leave a lot on the table because they wait for an exit condition, or trail stops too loosely, leaving a lot on the table when the trend is reversing. Also, in chop a winning trade that goes a fair number of ticks turns into a loser because the exit condition fires while taking a loss, or trailing the stop too tightly whipsaws them out. I just haven't found a good exit strategy for runners that I'm comfortable with for trend trading. I think exits are a lot harder than entries.
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The first trade: My intuition told me it wasn't going anywhere so I got out +1. It would have stopped out so I did well.
2nd trade: I got stopped out at the absolute low of the pullback. Now that sucks!!! My max stop is 31 ticks which I determined from my backtesting. -31 ticks.
3rd trade: I got out early with 13 ticks. But for some reason I was still long. I don't screw around when that happens, immediately closed it for +10. Turns out I had put my buy order on, then somehow changed the ATM Strategy and put on a second buy order. So I got lucky with an extra 10 ticks.