This type of strategy is
valid mainly for a type of limit operations of bite-and-run, though
sometimes and possibly working with multiple contracts, could be it is interesting to
adopt an adaptive trailing stop tactic on the part of the position
or, alternatively, with one the smallest part of it,
an ambitious goal to close those positions that benefit from a strong
one directional trend and, in
case it is not reached, adopt the typical trend-following strategy based on stop and
reverse. In practice and only if I can work with a fair number of
contracts:
good part I close them
with the scalping and / op short release techniques, a smaller part
with a trailing stop pretty aggressively and a marginal part is left
to market to try to exploit
moves decided in a
favorable direction.
However, in this article,
it is necessary to keep in mind that both the information is small
and the superficiality with which the subject is addressed do not
allow detailed explanation of all sub-strategies just mentioned,
which is why it is necessary to keep in mind that the operation is
essentially of speculative type such as intraday scalping.
The basis of the
methodology, which in this case works on 15-minute charts (but it may
be valid
even on the 5 and 30
minutes, in my opinion) has as a reference tool a triple moving
average and it
fast stochastic; the
reference parameters are as follows:
- mobile medium of short
to 10, intermediate mobile medium to 20 and mobile medium of up to 50
periods;
- Fast stochastic at 14
periods (30 and 70 over-estimated and over-bought).
As it is easy to guess
the parameters adopted are nothing but classics, statistically the
most
frequently adopted; this
does not detract from the fact that anyone can adapt them as best he
believes on his own information and / or experience, or to make the
operation more / less aggressive (example, also classic, for mobile
averages would be 4-18-40 or 9-18-34 and so on, or
increase / decrease the
overcrowded and over-estimated stochastic or change its time
parameter to 10 or 20 etc.).
Let's see a graphic
example:
Compared to the normal strategies here,
the intersection between two or three mobile media is marginal or at
least considered:
only the first case, in fact, only if
no other exit technique is adopted may be useful
to close the position, nothing to find,
at utility level, for the second condition (intersection
triple). Let's see the use of averages:
- the main aspect is tied, unlike
usual, to the longest median inclination, condition
necessary to activate the signals for
the possible operation. Again in this case, as well as for
the parameters will be the aptitude or
not the most / less speculative and aggressive trading to determine
how mobile media should be inclined: personally I find it interesting
to work with
a slope above 20/25 degrees, positively
or negatively inclined, of course, to
depending on whether you are working
for long or short income entries. As can be seen from the graph
above, in fact, the blue dots indicate the
moment from which the inclination of the affected media begins to be on the expected levels and
therefore with a higher grade than the minimum valid for operation (long in this case); And in
fact, right from that moment on, the trader's attention
should be aimed at identifying the
valid operating set-up. Here is the use of the others two mediums.
- There is a need to wait for the price
pull back next to the other two averages - to say the truth
mainly on the fastest medium. Once the
price has relied on the average, in fact, the first part of the set-up is
completed and the 15-minute bar will indicate, above the maximum, the potential breakout level needed to get
the long position. Personally I decided to take the break over the top but, in
reality, the most aggressive trader could quietly opt for market entry or, alternatively,
one or two pips above the bar closure level:
you will do some extra operation, you
will take a few more stops (generally to all parameters)
respecting the increase in stoploss is
limited) but each operation will be saved one-two
eight to ten pips in limit cases, so
any major breaks would be covered). It's important
consider that if the closing price of
the bar in question was below (long) or above
(short) both moving mediums (short and
intermediate) the set-up is canceled or postponed to
the next one, if the parameters are
respected. The same thing for the exit from the market: one of the
possibilities, in fact, is just related to the closing on (short) or
below
(Long) both lower moving averages. Then
touch the filter.
- The stochastic serves just what
filter for entry into the position and also, at a later time,
for emergency exit if the targets have
not already been met. In fact, it will be necessary
wait, if it is not already, that the
oscillator is overcrowded to enter long or in
overwhelmed to enter short. And this is
not a mistake, clearly: in spite of how much you are
aspects as a traditional assumption, we
in this case do not act against the main trend
(supposed) but in his favor. In fact,
being very short or scalping, we are interested in it
take as many points as possible or tick
or pips as you want and, generally, the best way is to follow the flow of
money: if we are over-packed it's because in that moment the operators are buying (vice
versa for sales), which means they could it turns out to be profitable to enter
where the money flows. I repeat: we are not interested in staying in
position, as a basic concept for a long time, but to bring home a
profit with the least possible risk in relation to timing and market
prices. It goes without saying that the same stochastic will indicate
the eventuality exit from the market, stop loss or stop profit,
possibly: a return of the oscillator values within the intermediate
band 30-70 (or others, depending on the trader's personal
preferences) it will require the output with the closing of the
position (also in this case at stop with required break or a market).
Also to assess, personally, the opportunity to go out in advance if
the oscillator formed a clear divergence against the main trend and
thus against our position.
Here are some examples:
So
the strategy is very simple to implement once you set up charts and
analytical tools; the problem
the
main focus is the attention of the trader and his willingness to work
on the market for the most
part
of the sitting. Some
motivation: the wait for a minimum inclination of the moving average
longer makes it better operation,
not necessarily on the end result, but on the times of profit and the
impact of the stoploss on
performance. It also allows to avoid excessive lateral situations
(just by effect of inclination) and an excess of conflicting
signals (avoidable, at least in part, using the average a Long
and no crossroads).
Stochastic,
used in an unconventional way (except for early releases on any
divergence confirmed), it is useful because it shows the strength /
weakness of the market; is also one of the motives (the main,
probably) so I think this methodology is useful rather than
operational
fast
and scalping: in fact, the situations in which a stochastic in
overcrowded or hypervedued coincides with the determined
continuation (at least in the first instance) of the fundamental
movement, reason so its utility is exclusively to try to exploit the
timing of entry into speed and direction. Finally, it is evident
from the charts as in fact you can only take a limited part of each
trend directional; in spite of that, if you want to notice it in
the examples and studies you may want to do, the speed at which
you can profit each time is in the highest level of excellence.
Hoping
that this article can be a good starting point for those who want to
operate on our currency's future referring to personal checks and
supplementary / additional studies any other consideration.
PS:
in my opinion it is a more or less specific technique for this
market: use it on stock futures or bonds could give many more
problems, but that does not mean that personal experiments can be
made and check it out personally.
Article
translated by italian with Google translate.
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