|People have asked me many times, with your
development effort, your dedication to customer service how do you find the
time to trade? Really, its not that difficult. What's difficult is
monitoring your computer screen all day waiting for set ups or, taking the
marginal set up because you need something to do. We have all been there,
forcing the trade because your bored. What I find is by devoting time to
NinjaTrader it can help keep me focused on trading the right set ups and
waiting for them to come.
Following is a set up that I have been
trading over the past month. I have spent a few months forward testing it
with much success. I started trading this live with one contract September
1, 2003. I am not sure what name to give this, so I will call it the Ninja
set up for lack of creativity. The initial concept of this set up came from
a user (Ben) back in June. He provided me with the idea of using a Time
Series Forecast indicator applied on a weighted moving average which in turn
was applied to the data series. For the most part, I have no clue, nor do I
care what these indicators do. All I saw was an uncanny ability to pinpoint
some market turns. With some tweaking and testing and more tweaking, I came
up with a discretionary set up that fits quite well for my style of trading.
The Ninja Set Up
The set up is a multi-time frame set up for
the ES that uses a 630 tick to generate bias and a 70 tick chart to generate
the signals. The trade attempts to scalp 2.5+ points with a 1.25 stop. The
average duration of each trade is around 8 minutes.
A trend indicator is used to generate bias on
the 630 tick chart. To build the trend indicator, you will need the
- 10-period WMA using the 630 tick chart as a
- time series forecast (TSF) indicator with a period of 5 and a projection
of 18 applied on the 10-period WMA.
The indicator is bullish when:
Current TSF value > TSF value using the WMA
value of one bar ago
The indicator is bearish when:
Current TSF value < TSF value using the WMA
value of one bar ago
You can download a copy
of the trend indicator for NeoTicker here.
Plot this indicator on a 70-tick chart as a
histogram. You will end up with something like the image below.
The basic idea is to only go long when the
trend indicator is bullish (green) and go short when the indicator is red
(bearish). The actual trade signal is generated on the 1st retracement after
the trend indicator changes state.
1) After trend indicator changes state, wait
2) Retracement must be in the 38% - 62% fib
3) Wait for a reversal candle and enter on
the tick above the reversal candle (for long reverse for short)
4) Exit based on the NinjaTrader strategy as
per the image below. What is not displayed is the BE+ value of 0.75 points.
This does seem like a very simply enter on
the pullback of the 1st change in trend. In fact, this is very much what it
is with the exception that the trend indicator filters out when or when not
to enter. I also mentioned that this set up is discretionary which means
that I personally do not enter each set up that I get. I also use 5 and 15
minute time charts with 20 and 200 MA to filter out set ups that come at
times of low probability based on those charts.
Below are actual live trades with this method
for the time period September 1, 2003 - September 19, 2003.
The statistics are based on trading only one
contract. The one area that I have been unhappy with is the low Avg Win/Loss
of only 1.24. In my forward testing months of July and August, I had average
between 1.7 and 1.8. I believe that the past few weeks have been an
exception due to the tight ranges we have seen. The trades have not followed
through as much as during the summer. Overall though, the method is tracking
to generate 20+ points for this month.
Below are two actual trades that I took over
the past week.
As time permits, I will add more and more of
the various set ups that I trade myself.