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THREE SET UPS
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Created: by Jeff Castille Attachments:243

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THREE SET UPS

  #921 (permalink)
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shodson View Post
I'll try that. I usually roll-over around the 19th or 20th of the month for my testing. Does that sound reasonable to you other CL traders?

Use: Light Sweet Crude Oil

The best day to start trading the new month should be the day before the last trading day of the expiring contract.

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  #922 (permalink)
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Bookworm View Post
Use: Light Sweet Crude Oil

The best day to start trading the new month should be the day before the last trading day of the expiring contract.

We want to trade the most liquid month, so when the new month becomes more liquid that's when we change. one can trade a less liquid month but you're more likely to have slippage and violent price moves against your position.

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  #923 (permalink)
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Inside bar confirmation


One way to confirm a 15 minute inside bar is a lower time frame........take for instance the first inside bar we had on Friday.......you will notice that a 1-2-3 reversal pattern had set up on the 5 minute chart.( See attached screen shots)

Hope you are having a great weekend.

Jeff

Attached Thumbnails
THREE SET UPS-cl-12-10-10_29_2010-15-min-.jpg   THREE SET UPS-cl-12-10-10_29_2010-5-min-.jpg  
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  #924 (permalink)
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More inside bar confirmation

Let's take another look at how a 5 minute chart confirmed an inside bar on the 15 minute chart........

Thursday morning an inside bar developed.....you'll notice on the 5 minute chart that a double top was in place and we had divergence on the CCI.

I would encourage anyone interested in deciphering "good " inside bars from "bad" inside bars (15 min) to take a look at a 5 minute chart.

Jeff

Attached Thumbnails
THREE SET UPS-cl-12-10-10_28_2010-15-min-.jpg   THREE SET UPS-cl-12-10-10_28_2010-5-min-.jpg  
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  #925 (permalink)
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Beating a dead horse

Just one more...........let's take a look at the 15 minute inside bar that developed on Wed afternoon.......you'll notice that a 1-2-3 reversal pattern on the 5 minute chart was great confirmation! Also the time of day was good as this is typically when you get the "push into the close."

Jeff

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THREE SET UPS-cl-12-10-10_27_2010-15-min-.jpg   THREE SET UPS-cl-12-10-10_27_2010-5-min-.jpg  
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  #926 (permalink)
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Jeff,
Great stuff can show an example on the small frame chart when the IB failed?

Thanks,
Babypowd3r

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  #927 (permalink)
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Today I was in a trade then an IB formed helped move my stop. It dont go my way for -7 ticks but I quickly reversed in the break for +21. IB can also serve as caution signal if your in a middle of a trade.

Babypowd3r.

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  #928 (permalink)
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babypowder View Post
Jeff,
Great stuff can show an example on the small frame chart when the IB failed?

Thanks,
Babypowd3r

Sent from my DROIDX using Tapatalk

Hey BP,

My observations concerning inside bars are NOT applicable to smaller time frames........also, it seems that CL exhibits the type of volitility that makes these inside bars more successful than they would be on other instruments. If you are interested in inside bars I suggest putting the Reversals indicator on your chart a studying a few months worth of data and note which ones work and which ones fail and try to determine why. Could be the time of day.....proximity to news events.....high level speeches etc......

Jeff

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  #929 (permalink)
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cunparis View Post
I think entry triggers are great because we can relax a bit while waiting for the trigger and potentially monitor several markets. But once it triggers, in my opinion, discretion is required. The reason is it's very difficult to have an exit trigger. Many edges only have a few ticks net edge (many only have 1 tick net edge). If discretion can get an extra tick out of it then that can increase the profit by 50% (or double it).

I give you an example: When I scalp, I look to get as much as I can. But if price stops moving in my way I'm out. Sometimes I get a couple ticks and sometimes more. But I try not to let it come back to my entry.

Now if I tried to automate that I'd have to pick a target and that would be making a lot of sacrifices. Let's say the target is 8 ticks, market goes 6 ticks in my direction and then pulls back 3. I can get out with +3 ticks. An automated system would get out with 0 assuming a "breakeven stop" is triggered. Now let's say the market moves 12 ticks and then pulls back 2. I could get out with 10, once again beating the automated method.

I quit messing with automation for this reason. I remember back when I was backtesting another strategy with Jeff, I optimized and came up with an optimal target that was bigger than Jeff's +8/+16. I forget what it was but I told Jeff that it's better to wait for the "optimal" target. I don't remember his exact words but it was something like "just because it has hit that in the past doesn't mean that it'll continue doing so". Which turned out to be exactly right. Over the next few weeks the "optimal" wasn't optimal.

So to conclude, backtesting entries can be good to find entry triggers. But in my opinion, discretion should be used once in the trade.

I hope you found this post useful. I wish several years ago I had known this and spent my time learning to trade with discretion instead of programming & backtesting.


Completely agree.

Although it has it's place in terms of maybe giving an initial indication (a baseline if you like) of the sort of success/failure rate you could have and whether it is worth investigating further.

IMO backtesting manually yourself is a good way to go. I.E go back a number of months and start with start of the day on right edge and just watch the bar unfold as you go thru bar-by-bar. This way you can work out the success rate of your strategy, but in addition you can also add discretion as you are in effect sort of 'trading live'. You can also see the whole day as it unfolds and have an opinon on whether it is looking like a trend day, range etc etc..

An added advantage is that you are observing price action to improve your eye and it can be done outside market hours. It does take time though and you can spend countless hours watching bar-by-bar...but this is not wasted effort in my view, as it gives you screen time. I've spent tons of hours doing this over the past year or so, and it's tough to take when you begin to see how a favourite setup etc is not all you thought it would be and it has to be chucked away (at worst) or at the very least modified and tinkered with. Anyway, I'm digressing a bit.

Good thread though...I'll have a proper look thru when I get some time.

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  #930 (permalink)
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jitasb View Post
IMO backtesting manually yourself is a good way to go. I.E go back a number of months and start with start of the day on right edge and just watch the bar unfold as you go thru bar-by-bar. This way you can work out the success rate of your strategy, but in addition you can also add discretion as you are in effect sort of 'trading live'. You can also see the whole day as it unfolds and have an opinon on whether it is looking like a trend day, range etc etc..

This is a great suggestion. I've spent hundreds if not thousands of hours doing that too. It got harder with multiple timeframes and that's one reason for not using multiple timeframes.

I was just doing this this weekend and have a few pages of dates & trade results on it. All in preparation for Monday morning.

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