Craigaudio's ER2 Buyzone Strategy

trading strategies and money management discussion, code, results

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eudamonia
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Postby eudamonia » Fri Feb 22, 2008 3:15 am

Jason,

Glad to hear your doing well with it. I'm still trading it and making money. I'm really working hard on finding a methodology that I like for the USD/JPY Fx.

Yeah I use ViperTrader's methods too (not for the BZ setup though). I'll check that out!

Blowfish,

I've been using StopLimit orders for about one year (that's an average of 1.5 traders per day so you do the math). Never had a problem. Not once. Of course if I did I would simply exit at market lol. It might cost me a tick or two. 20 ticks lol. That's hilarious. I would have to be asleep at my desk for me to let the market move that far without reversing.

Also keep in mind that I use NinjaTrader for my limits (they do the math of getting me out at limit and if it doesn't get filled within less than 6 seconds it automatically converts to a market order). I end up with market order exits on my stop usually about 5% of the time. The rest is at my price.

This method has a very tight expectancy of 2 ticks per trade. So if you consider this, getting out at limit isn't only a good idea - it's crucial.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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dcstrategies
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Postby dcstrategies » Fri Feb 22, 2008 5:45 pm

can not find the info to get this indicator working for futures on tradestaion--joined the paltalk room and still can not figure it out--I am a trader not a brain surgeon
so how exactly do I need to set this up for es er2 or nq
also, if anyone is trading individual stocks that would be nice to pop in as well. Thanks here is what comes up when i try to insert indicator
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dcstrategies
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Postby dcstrategies » Fri Feb 22, 2008 5:46 pm

can not find the info to get this indicator working for futures on tradestaion--joined the paltalk room and still can not figure it out--I am a trader not a brain surgeon
so how exactly do I need to set this up for es er2 or nq
also, if anyone is trading individual stocks that would be nice to pop in as well. Thanks here is what comes up when i try to insert indicator
Attachments
bzind1.gif
bzind1.gif (30.17 KiB) Viewed 395 times

dcstrategies
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Postby dcstrategies » Fri Feb 22, 2008 5:47 pm

sorry for the double post it said debug error when i submitted

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Postby eudamonia » Fri Feb 22, 2008 6:50 pm

dcstrategies,

Change iDecimals to 2, iBuyZoneSell to .11, iBuyZoneBuy to .11.

I don't use TradeStation so not entirely sure if that's correct but it should work. You want your BuyZone entries to be 11 ticks above the open or below the close.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby dcstrategies » Fri Feb 22, 2008 6:54 pm

edward do you know about the iopen and how do you get it to reset per hour or is it a once a day trade at the open?

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Postby BlowFish » Fri Feb 22, 2008 7:09 pm

Edward,

Thats a neat feature of Ninja. Maybe the ER2 is more liquid and a bit more sedate than when I traded it last, guess it must have been quite a while ago now. I am still rather surprised that the worse damage you have had is only a couple of ticks. Even though I only traded a couple of lots I used to sometimes get split fills and slippage (both positive and negative). I used to hang out with 10 & 20 lot traders and they where nearly always getting split fills. 20 was about the most the market could comfortably accommodate. 10 ticks in a second would happen now and then (especially round news) with internet latency you->broker->Exchange and back again, you wouldn't need to be asleep :D Guess your 1-2 trades are out of the way early in the day when the market is 'thick'. A plus to this approach. Anyway its all working out for you which is all that matters really.

I just wondered if you will move to ICE (or have you already) or will you trade something else? I don't believe ICE support stop limit natively which means there will be more instance of not getting filled.

Cheers
Nick.

!:D!May or your fills be complete!:D!

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Postby eudamonia » Sat Feb 23, 2008 7:48 pm

dcstratagies,

If you read the thread you'll see that this is only traded at the daily open.

BlowFish,

Yes the Er2 had become less volatile and more heavily traded in the past couple years. I agree that anything over 20 contracts is likely to cause slippage. Still I'm not really a 50 lot trader yet and making $200-$400 a day with this method is very doable (and you only trade for about 20 minutes a day) and to me quite profitable. Other's may think that is not enough $ but it really depends on their account size.

Yes NinjaTrader is pretty amazing. And of course I think technology has been getting better for retail traders in the past 2/3 years.

I'm already looking into trading other vehicles because I am not sure how ICE will affect the ER2 but most likely things will be pretty crazy for awhile. And I see no point in trading anything without the use to STOP LIMIT orders. Duh? Are we trading in the 1920s or what lol?

Right now I've been focusing on trading the USD/JPY with Avery and some other folks in his PalTalk room. Still learning the ropes but I'm pretty confident I'll be able to adapt something that will work well for this market. I also love the ability to fractionalize my lot size which is something that I think the Futures markets would really benefit from. This makes position sizing more flexible and makes your returns higher.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby BlowFish » Sat Feb 23, 2008 8:56 pm

Yeah I think ICE will screw the ER for a while. I checked IB's website and apparently the only order type that is supported at the exchange is limit, (so even a market order is simulated by a limit order way inside the market) archaic. Not sure what trades on there but it dosen't sound too main stream.

Personally I tend to use limits for exits. Stops well I tend not to use hard stops (an emergency one right outside the market) if price action says price isn't going my way I exit or flip. I must admit I do often put a limit away from where price is trading back toward my entry to try and eek out a scratch or a couple of tick loss. Thats where it all becomes art rather than science and of course where you can get stung. Price does back and fill most of the time (certainly in index futures, possibly less in currencies) but if it motors I might loose a dozen ticks or so.

Cheers.

BenP
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Postby BenP » Fri Jul 11, 2008 1:44 am

It's been a while since this thread has begun. Now that there are a few traders with experience trading the ER this way, I'd like to hear how you've have done with this method, and if you've tweaked the strategy any.

To start with, this is the setup, correct?:

if market opens at 650
My entry for long rests at 651.10 (650 plus 11 ticks)
and my entry for short rests at 648.90 (650 - 11 ticks)
(ALL orders are places as limit orders and stops)

If long, my target is 652.10 (651.10 plus 10 ticks)
and my stop loss is 650.90 (651.10 - 12 ticks)

If short, my target is 647.90 (648.90 - 10 ticks)
and my stop loss is 651.10 (648.90 plus 12 ticks)

Is this correct?

This trade is executed 2 times max at the very beginning of the regular hours session. correct?

If you win at the first attempt, do you trade it again if it reverses and setups up again?

Also, what are peoples thoughts about a partial exit when the target is hit, and let the other lots run? Or have you had better results exiting all with 1 point only?

Thanks for sharing your experiences.

Ben

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