Some of you are asking about Systems One and Two built around my price proxy (I dropped sys3 a long time ago). Well, DavidB, a team member, has been doing excellent research, including some refinements of the rules! Here’s a tiny excerpt or two from his analysis:
On System 1:
“I did an informal backtest of the last 15 days or so of trading. (BTW, it was day session only.) System 1 is good for a 70% win rate. Yeah! The wins can be phenomenal, and the losses are only as big as you make them. [...]”
On System 2:
“For System 2, about 27 trades in 13 days, with only one loser. This was using absolutely strict rules of the EMA trending the right way, and of price pulled back through the EMA of at least 3/4 of a bar, or 3 ticks. [...]”
Two Take-Away Messages
First, the price proxy entry ideas I put together are viable, and people are doing great work on refining them. This was just an excerpt from a single example. Thanks, David!
Second, and most importantly, I think David would agree that, by his efforts, he has learned far more than he would if he had just asked me about the statistics and I rattled off some numbers to him. David is learning by doing! That is a powerful thing, and something I’m trying to get the majority of the team to do. At any skill level, you can lurk and benefit a little, or you can work with your ideas, share what you’ve learned, and get to the next level faster than you thought possible.
Excellent work David. You not only benefit yourself but others as well. And of course kudos to Richard for even coming up with the concepts!
Thanks. Richard is absolutely right in his post. First of all, it takes some trial and error to trade any system, simple as it is, because real trading is different than hindsight trading. Secondly, I kept experiencing hesitation when I started to trade live, and used the actual backtest above to reinforce my confidence that these two methodologies, along with the really solid PriceProxy tool work. If I see a really pristine System 2 trade, it’s likely going to work. If it doesn’t, the next one will.
My thanks to Richard, not only for this great indicator, but for the simple ways to use it. I certainly haven’t found any better.
Hi Richard,
Do I have to continue with EOTPro for Price Proxy or is it avaiolable? I mostly trdae with Tradestaion but have access to Ninja.
tams
My agreement with EOTPro was that I would wait to release the price proxy to the team until January 1st. Thankfully, that is the last of my agreements, and I’ll be glad to be out from under it.
So, you definitely don’t have to continue with EOTPro if my indicators (things like price proxy, everypush, channels, and on and on) are what you are using. Over time I’ll open them all up. I’ve already released one or two.
Thanks Richard.
I have been trying to put Price Proxy on minute charts so that I can backtest for a long period (i.e. 10 years) – any suggestions?
Hi there, not sure what suggestions you want regarding price proxy on minute charts. It applies to minute charts fine as far as I know.
Is there a place to read DavidB’s complete analysis of the price proxy system 1 and 2?
Most of his work is in this thread though there are others where he has talked about it. Basically look through all of his posts (the board lets you search for them).
How I do I get access to the thread? It says I don’t have permission.
It’s part of our private forum. Information is here: team info. David is sharing his research with our team. I don’t know if he wants to say any more about it publicly, but he’s welcome to if he wants.
System 2 seems really nice… in theory. However, when I attempted to demo-trade it, I got SLAUGHTERED. It would be really nice if someone could program an arrow that showed exactly where the entries are.
Hint hint. :p
you know, a lot of people, when they first try it, pick entries that have nothing to do with system 2. It seems to take most people a little trial and error to really get it. I know some of that fault is mine, because the wording in the original blog post isn’t as precise as it could be. But, people that stick with it do catch on. So, don’t give up!
I’m happy to report some more here. Both systems are robust. Some days, when the market cooperates, they are so robust one believes they can trade them “blind,” or that they could trade them if the entries were shown with “arrows.” But, on most other days, a basic knowledge of price action is needed. For example, do you want to take the first countertrend breakout of a trading range because you got a signal, or would waiting for a second entry re-trace be more reliable? As simple as the two methods are, it does take some time to be able to spot them in real time and understand the rules perfectly. The only time I see the rules for System 2 get risky, as in “slaughter,” is when price goes into a tight, sideways range and the proxy is flat for many bars, yet there are movements that look like pullbacks. The indicator, and the systems are really great to work with, especially side by side with price action trading.
Hi David,
Thanks for the explanation.
Can you confirm the chart details? Is it 4 tick range charts that you use?
Thanks
tams
Yes, it’s a 4 tick range chart with a 20-period “Hull” trend-adjusted EMA, and the PriceProxy.
I tried using the PP on my 5 minute chart, but for some reason that doesn’t work as well as finding confluence between setups on each independently.
To The MTM Team Members:
I would like to propose a group project for those who are interested. It involves automating the Price Proxy #2 system (NINJA)in order to fine tune the entry and exit points. We could decide jointly what aspects to explore and share the costs of development. Any who have an interest can leave a reply.
MarkW
Sorry if I’ve missed the appropriate info somewhere, but how do I get these indicators? Are they available if I join “the team”?
HI Scottie, all the stuff is there for the team members. Eventually I might open it up to everyone but they get first dibs.