This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Long time, no write! Yes, I’m here an NOT trading after my BIDU blowup. Working my Seven Step Plan, testing out some ideas on paper and working on my emotions outside of the markets.
My big quest for a system is basically how to tell a trend change / reversal from a shallow retrace / continuation. Quotetracker has a built-in chart type called Renko Charts. This link describes what they are very well. Basically, they are like a PnF chart, only less cryptic IMO. Also, time is compressible, like in tick charts or volume-candle charts, so there’s no information or signals during slow times.
I was playing with Renkos because they provide a solution to the reversal / retrace problem. The trend is defined by the brick pattern. It’s not subjective at all! Choose a Renko brick size (say, $0.10) and you’ve got the trend spelled out. here’s an example I paper-traded in GRMN this morning. I made 10P’s (a P is a paper-traded R for those counting at home):
Nice, huh! The only problem with Renko charts is that they are a trend following method, so in non-trending markets you get whipsawed like crazy (see all the arrows on that GRMN chart? I would have given back lots of P’s through the rest of the day.) I’m trying to play with some different methods to only take signals that have better odds for a trending move. I’ve played with PPO, a stochastic RSI, and choppiness index, but nothing earth-shaking so far. Any ideas on how to cut down on whipsaws would be great!
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
October 31st, 2007 at 9:50 pm
very interesting…btw, even richard “paper” trades…the only difference is that the bank accepts his “paper”
November 1st, 2007 at 1:19 am
I think it seems very good but i just replayed my charts and in ranging market it can swallow your capital like there ain’t no tommorow. You can also use Heiki Ashi and Kagi charts for trends.. try your indicators on them and see if you can find good entry points. I tried ADX and DMI but still the signals were’nt too good.
November 2nd, 2007 at 2:30 am
There might be a simple answer to your question “My big quest for a system is basically how to tell a trend change / reversal from a shallow retrace / continuation.”
Since it is not possible to know for sure without hindsight, why not code your system so that it only takes trades at higher prices?
November 2nd, 2007 at 8:38 am
prospectus: teresa lo has $250 course (if i’m correct) that offers lifetime access….i know that TraderD took it, and i’m thinking seriously about signing up…u may want to consider it also
November 2nd, 2007 at 8:43 am
$295 lifetime
http://powerswings.com/library/
November 2nd, 2007 at 10:13 am
Many of us have bought courses like these very often.. even tyro bought a pretty good course as well but he’s still struggling.. I think you should avoid courses at all costs as they only teach you the obvious.. those who create them. do so to cover up thier losing days and never reveal thier trading system.. it’s a human psychology to keep things secret and especially when it involves making money in the stock market..”the less the merrier” in this case..keeps things rolling for a long time.. however, for a beginner you could go ahead and buy them.
November 2nd, 2007 at 12:12 pm
@DT Futures: Yes, whipsaws are murder! I tend to put the brick size a bit large, so it cuts down on them a bit, but still there’s got to be a better answer.
@Teresa: I don’t follow what you’re suggesting…
@BAT: That would have been cheaper than my death by BIDU. I’ll think about it.
December 22nd, 2007 at 3:00 pm
Hi Everyone!
I’ve been trading in the forex market for over a year already, I just started using the Renko charts, I really like it, it does have it’s draw backs but it’s like almost all systems out there. I have 2 accounts one with fxsol because they provide the Renko charts free and also I use fxtrade, I use fxtrade to trade with Renko, because I can start with betting with it with a small about then I keep double ing up until I come up with a profit then I start again from the begining. I hope I explained myself well, if you have any questions this is my email jhrgarcia2004@msn.com. Im not a profesional but I do very well. have a good day and have a happy new year