Lets develop a trading system...!

[linkon7]

To start with try defining the trend line objectively.

How do u plot it?

Would you prefer to use Linear Reg Line or use swing high/low?

If u always use swing high/lows or close?

If you need to have min 3 points or only 2 will do?

How do you handle fat tails, so on so forth ...:thumb:

Before one can start coding one needs everything defined objectively in terms of available data (i.e in our case price points OHLC/V and time)

Honestly, i dont know which is best. Thats why i have put the trading plan in a forum: to get feed backs...
I dont want to make all the mistakes there is... just to learn from it. Everyone can jot down their experience and we all can work on it.

I think a code to look back of the last "n" bars should do.... we plot the last 2 lows and highs and we can play with the number of bars till we find the ideal number.

Long tails will effect the rsi, so we do need to keep that into account.

RSI is leading indicator and hence should break the trend before the price.

lets hope someone develops a code first, and then we can work on the parameters....

Also we can plot the pivot lows and highs as that can act as a potential target.

 

[linkon7]

Try this .. I got it in forum.

no=Param( "Swing", 2, 1, 55 );
tsl_col=ParamColor( "Color", colorCycle );

res=HHV(H,no);
sup=LLV(L,no);
avd=IIf(C>Ref(res,-1),1,IIf(C<Ref(sup,-1),-1,0));
avn=ValueWhen(avd!=0,avd,1);
tsl=IIf(avn==1,sup,res);

Plot(tsl, _DEFAULT_NAME(), tsl_col, styleStaircase);

Buy=Cross(C,tsl);
Sell=Cross(tsl,C);

shape=Buy*shapeUpArrow + Sell*shapeDownArrow;
PlotShapes(shape,IIf(Buy,tsl_col,tsl_col),0,IIf(Buy,Low,High));

Thanks GS,
but this afl looks for the highest high value of the past no number of bars and the lowest low values of the same number of bars and then plot them depending on the close.

This afl gives a buy when a close of a bar is above the last HHV (Highest High Value) or below the LLV (lowest low value). It cannot be taken as a break of the trend. Its more like pivot trading i think.

Thanks for trying....appreciate your effort....

 

[burnsy]

so youre looking for something more in the lines of swing?
i think a swing system with the consideration of pivots would be a powerful predictor

 

[linkon7]

so youre looking for something more in the lines of swing?
i think a swing system with the consideration of pivots would be a powerful predictor

It is a swing trade.... and i would like to incorporate pivots into the system. But as of now, my plan remains to trail it till SL is hit. So i am not looking for any pre-determined targets or entry points. if the setup gives me a trade, then i will blindly take it and place SL accordingly and incase, it isnt hit, then i'll prefer to trail it to the low of the last 3 bars.

 

[Nishikant]

Thanks GS,
but this afl looks for the highest high value of the past no number of bars and the lowest low values of the same number of bars and then plot them depending on the close.

This afl gives a buy when a close of a bar is above the last HHV (Highest High Value) or below the LLV (lowest low value). It cannot be taken as a break of the trend. Its more like pivot trading i think.

Thanks for trying....appreciate your effort....

:thumb: KEEP IT GOING BRO.

GOD BLESS YOU FOR YOUR EFFORTS.


REGARDS,
NISHIKANT K. HADGE

 

[rushforgames]

Dear Linkon,
Try to Find Breakout On The basis Of Volume And Trend As They Appear More And Afl Should Give Target As Well As Stoploss So That We Know The Risk Before Trade. And Stop loss Should Be Bearable by Every One Which has Less Chances Of Trigger. I Have Read Some Where We Can use Stastical Calculations To know The Trend Perfectly. If Any One Has Information About Statistics And Standard Deviation And Stantard Error Please Share With Us

 

[linkon7]

Truth About Trading

TRUTH 1: There is no 'Holy Grail' out there. Those that squander their time and money hunting for a pot of gold at the end of the rainbow ( the magic indicator) will eventually end up depleting their capital and walk away in shame, confused and disgusted.

TRUTH 2: Simple is the best. We can only comprehend a certain amount of information at any point in time and the greater the information overload ... the less likely we are to succeed.

TRUTH 3: You earn your money from trading. This is not a game of chance like a craps table at a gambling casino or hitting your lucky number in the Lotto drawing. This is all about defining the probabilities of success and targeting only those opportunities that have much greater than average odds at producing a positive outcome.

TRUTH 4: Trading is a business, not a part time hobby, not a sporting event or an intellectually stimulating form of entertainment. It's a business and like any business, in order to succeed you need to commit 100% of your intellect, time and resources towards becoming a success. 70% of small retail traders fail at this business because they don’t treat it like a business.

 

[linkon7]

Dear Linkon,
Try to Find Breakout On The basis Of Volume And Trend As They Appear More And Afl Should Give Target As Well As Stoploss So That We Know The Risk Before Trade. And Stop loss Should Be Bearable by Every One Which has Less Chances Of Trigger. I Have Read Some Where We Can use Stastical Calculations To know The Trend Perfectly. If Any One Has Information About Statistics And Standard Deviation And Stantard Error Please Share With Us

The reason, i have ignored volume as most people track nifty spot and they dont get volume.

I dont like having a fixed target as situations are different everyday. under different conditions, same set of rule for exit will give mixed result. I prefer trailing SL as that will help us capture 80% of the trend.

Probability of tight SL hitting early is high, so my expectancy of success is just 60%. Out of 10 trades, i expect a false break out at least in 4 occasions. and 4 times, we get stopped out early due to whipsaws. Profit of the 4 trades will nullify the loss of the other 4. But those 2 trades, were i am successful, will ensure a decent profit at the end of the day.

lets be very clear about what to expect from our system. at the end we just want 2 big trades per day. thats all. the rest is just noise that we have to bear with every day.

No trading plan can have 80-90% success rate. So simplicity, is what we are after. Lesser the clutter, less we have to think and more mechanical we can become.

 

[rajendrani]

The reason, i have ignored volume as most people track nifty spot and they dont get volume.

I dont like having a fixed target as situations are different everyday. under different conditions, same set of rule for exit will give mixed result. I prefer trailing SL as that will help us capture 80% of the trend.

Probability of tight SL hitting early is high, so my expectancy of success is just 60%. Out of 10 trades, i expect a false break out at least in 4 occasions. and 4 times, we get stopped out early due to whipsaws. Profit of the 4 trades will nullify the loss of the other 4. But those 2 trades, were i am successful, will ensure a decent profit at the end of the day.

lets be very clear about what to expect from our system. at the end we just want 2 big trades per day. thats all. the rest is just noise that we have to bear with every day.

No trading plan can have 80-90% success rate. So simplicity, is what we are after. Lesser the clutter, less we have to think and more mechanical we can become.

Good goin linkon, but still volume does plays an important role too, well the trade what you are looking for may not be volume dependent.

If you would have gone through kartik blog http://stocktechnician.blogspot.com/ there he had posted an NWA system v 1.1 which gives the profit and loss in the chart itself. Explore this system it is really good.

Image for the blog

 

[rajendrani]

Linkon, this system is very simple you will definately get the result what you are looking for, smal trades and then capturing the big moves, overall ending in a profit.

But before that, you still need to determine what timeframe will you be going for. I have some charts on daily and for intraday on different time frames.

Daily charts using this sytem

Hourly charts