I am testing a new intraday system for my futures trading. The tough thing is to stay with it in actual trading for the next 2 months even though I know that it doesn't do well in non-trending environments like today. I need to get the data points to confirm the hypothesis that it is in fact a trending tool. I began using it this month and the small sample size thus far shows that as the days range narrow, so do my profits. Monday was a fantastic day for the system when we had a 235 point range on the YM, but todays 64 point range absolutely destroys this system. What is needed for those days, obviously, is a fade the highs and lows system such as using pivots. But even though one knows this, the trick is to define the type of day early on so that the proper system can be employed. Traders do this various ways such as looking at the range on the advance/decline line, whether ticks are exhibiting an "inside day", the size of the first 15 minute bar of the session, etc. Other traders develop "chop" indicators or use the ADX indicator. Well, I am off to re-create the wheel.Thursday, October 4, 2007
Futures Techniques
I am testing a new intraday system for my futures trading. The tough thing is to stay with it in actual trading for the next 2 months even though I know that it doesn't do well in non-trending environments like today. I need to get the data points to confirm the hypothesis that it is in fact a trending tool. I began using it this month and the small sample size thus far shows that as the days range narrow, so do my profits. Monday was a fantastic day for the system when we had a 235 point range on the YM, but todays 64 point range absolutely destroys this system. What is needed for those days, obviously, is a fade the highs and lows system such as using pivots. But even though one knows this, the trick is to define the type of day early on so that the proper system can be employed. Traders do this various ways such as looking at the range on the advance/decline line, whether ticks are exhibiting an "inside day", the size of the first 15 minute bar of the session, etc. Other traders develop "chop" indicators or use the ADX indicator. Well, I am off to re-create the wheel.
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