Friday, 18 June 2010

Quad Day

Quadruple witching day. Wow, I thought it couldn't get better than triple witching. Lot's of stuff expiring today. Everyone has an agenda of where the market should close. My vision was a new high which happened. The day's range, at least while I was trading, wasn't brilliant. I'm happy I banked my ten point buck (was it yesterday?). The days flow one into another.

I both love and hate the week-ends. Love them because I have time to do other things - both private and research. And hate it because the markets are closed.

Trading is an occupation that can provide you with a nice life but it's an occupation that, I think, requires you to have a passion about it. We love the money, we love not having a boss, and we love the high of seeing green at the end of the day. But most of us also love the actual trading. The working out of what is going on. The Sherlock Holmes or Poirot of it. The Columbo or Perry Mason of it. That's the high and they pay us for it.

In line with my vision today, I used the EMAs as support and just jobbed the market from the long side. It was not very interesting as it was slow but hey, there are quite a few days like that. Volume was not a lot of help today. I think we are heading for the Fib target of 1120.00 or so.


  1. Hi EL,

    I have been programming and back testing trading ideas as advised. I am very happy with the results achieved.

    From my manual work the results are in line with those advised in the blog. However, when I program I am not skillful enough to program out certain instances that i would not trade, for example those areas where the EMA's are horizontal and overlaid. As a result while the results are still in the mid to high 60's and 70's there not as high as the manual work. Could you comment on this please?

    The back testing was a step I nearly avoided however I have learnt so much about the indicators. (I understand after the exercise for example why you maintain that certain of the indicators could be "dropped"). I also understand more clearly what works and look at your charts from a completely different perspective now.

    Thanks as always,


  2. Bondi9, this is a problem with automating. If you filter for chop, you also miss trades. Try using the 6CCI as a way to look at momentum. Maybe that will help you. There are a number of indicators in easylanguage and MarketDelta out there that try to filter chop too. These came from the old WoodieCCI room. I don't use this. The other solution is to use time to filter your trades. If you do an analysis on what time of day you have a high enough percentage of losing trades you can avoid taking trades during that time. But again, you will miss great trades. In the end it will be a calculation of whether its more or less profitable filtering out the chop.

  3. Hi,Tom,
    That afternoon, I went to take a photo. When I arrived, I saw the photographer was working one something. The studio was so quiet and he was so concentrated on his job. This peaceful scene soon let me realize that the trading is no different with other jobs, concentrating on what you love to do and make the job done. After I came back, I checked your blog. You just talked that trading is an occupation. What a coincidence!
    You are right. We should not focus too much on the results and ignore the joy on the journey. Sometimes I thought that the moment I “give up” to be CP is the moment I start to be true CP. Weird !? :)
    Always thanks for your posts.


  4. Thanks EL,

    Reviewed CCIST and LT behavior during chop. Quite clear what happens...reflects the lack of vertical movement of range bars I guess.

    Picked up on relevance of CCI OB areas and CCIST pull back as trade filter.

    As an indicator to incorporate in trading models to detect chop I looked at the BB Squeeze. Sure I can incorporate but eye balling it it seems to lag quite considerably and I also figure every man and his dog is watching that and that's then part of the 90%. Also I have been on a path for the last 6 months or so of dropping indicators and I think i have all I need and can process on the screen.

    So on balance I think I'll not continue to refine further the back-testing and trust in my ability to recognize horizontal/overlapping EMA's (possible chop) when trading and attempt to switch gears to ensuring CCI pull back is present of CCILT OB.

    Looking forward to the course.


  5. Hi

    What are your thoughts on using the momo dots as a trailing stop for the last scale?

  6. Phil, yes, that works. The thing with the MomoDotsexit after aeven a short trend is that if you exit and it was too early, its usually a pullback that lets you back in.

  7. Thanks

    Trying to find a simple way to push the last piece. This will make a huge difference in my P&L over time.

    Best always,