Strategy Based On Chart Pattern

trading strategies and money management discussion, code, results

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fatdog1
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Postby fatdog1 » Tue Jul 11, 2006 12:05 pm

Good morning Ali,

I can't take any credit for what I do.

It is all based on Stan Weinstein's work from his book, "Secrets for Profiting in Bull and Bear Markets.

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fatdog1
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Postby fatdog1 » Wed Jul 12, 2006 8:10 am

Hi Ali,

Tradestation made a few modifications to the
trendline entry code.

Here is the eld and a workspace for the EURUSD.
I have it set to take a practice trade so I can make sure the stop loss and profit targets are working correctly.

You can enter the number of contracts you want to trade as an input.
You can enter intrabar on the 60 minute chart.
You can enter -1 to get the code to take a short in the inputs when the Euro trades near 1.2787.

It looks like it will trade near 1.2752 first today for a long.
It still has to touch the white line to enter a trade.





The DarvasBox caught this bull flag breakout on Friday for the 30 year bond. This shows that the congestion area can be big as long as it is
a tight range and still produce a nice trade.

Attachments
T_L ENTRY COLORS.ELD
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EURUSDTrade Workspace 7-12-06.tsw
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Ali Son
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Postby Ali Son » Thu Jul 13, 2006 11:34 am

Thanks Fatdog1. I will take a look at it.

Yesterday, I posted the updated Darvas Code on the two TS threads that you and I started a week ago. This morning, I will post4- 5 pictures from this site that you posted that I think best illustrates the bul-bear flag technique, including the one that you sent me yesterday. It should get things going as people have been asking for clarification and there are 300+ views of 1 of the 2 threads. A picture is worth the thousand words I wrote.

-Optionswings

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Postby Ali Son » Fri Jul 14, 2006 6:33 am

Fatdog1:

I got this response today:

"OptionSwings,

Can you write a statement in English which defines the flag pole in terms of the following values?
1. Horizontal size (# bars)
2. Price breakouts
3. Percent gain in price,
4. 'Flagpole low' compared to low with 'x' bars
Etc."

Can you accomodate this request, elaborating on it in simple language that can be coded in any way?

fatdog1
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Postby fatdog1 » Fri Jul 14, 2006 9:41 am

Ali Son wrote:Fatdog1:

I got this response today:

"OptionSwings,

Can you write a statement in English which defines the flag pole in terms of the following values?
1. Horizontal size (# bars)
2. Price breakouts
3. Percent gain in price,
4. 'Flagpole low' compared to low with 'x' bars
Etc."

Can you accomodate this request, elaborating on it in simple language that can be coded in any way?


Hi Ali,

I sent you a PM with this information before I saw this post this morning.
Someone else sent me that post from Tradestation last night.

Here is the answer I came up with.

Hi OptionSwings,

Here is a reply for Mark Mills.
I used the Tradestation User Guide to help me find answers to the 4 questions below.

Just as a flag sits on a flag pole, the flag pole should be
some kind of long key reversal candle indicating that the market is near strong enough support or resistance to indicate a possible reversal of the short term trend.

After the initial thrust, the market will go horizontal as the buyers and sellers try to decide on the next direction.
The length of the horizontal area can vary. A minimum of 5 bars in the congestion area is perferred.

My thought is that a upward breakout from a congestion area that is proceeded by a up bar indicates a uptrend and
should be more successful than a upward breakout from a congestion area that is proceeded by a down bar.

I have added the key reversal LE code to the DarvasBox strategy code as a filter to take a long trade.
I have also added the key reversal SE code to the DarvasBox strategy code as a filter to take a short trade.

I would like to add the key reversal condition to the actual DarvasBox code as a condition to be present before the box plots.

Thanks for the help,
FD1

OptionSwings,
Can you write a statement in English which defines the flag pole in terms of the following values?

1. Horizontal size (# bars) ( a flag pole is 1 vertical bar or candle)

2. Price breakouts ( Close is higher than the open for a bullish key reversal bar , Close is lower than the open for a bearish key reversal bar)

3. Percent gain in price, ( a 50% gain in price difference between high and low of key reversal bar minimum)

In addition, if possible, include a volume study to indicate up volume exceeding down volume
for bullish key reversal bar and down volume exceeding up volume for bearish key reversal bar. The volume of the key reversal bar should be greater than the volume of the bars in the congestion area.
I found this in the Tradestation User Guide:
(Note, Using the Key Reversal Up ShowMe Study with an indicator such as OBV (On Balance Volume) or an indicator that uses volume and price to determine buying and selling pressure enables you to more accurately analyze a market.


4. 'Flagpole low' compared to low with 'x' bars Etc. ( key reversal bar definintions) A bullish key reversal is characterized by a bar whose Low is lower than the previous bar's Low but ultimately closes higher than the previous bar's Close.
A bearish key reversal is a bar pattern consisting of a bar whose High is greater than the previous bar's High but ultimately closes lower than the previous bar's Close.

Mark Mills
Senior EasyLanguage Engineer, TradeStation Securities, Inc.

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michal.kreslik
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Postby michal.kreslik » Fri Jul 14, 2006 4:07 pm

I've moved our recent Refco discussion to the "Refco discussion" topic under the "brokers" foum:

http://kreslik.com/forums/viewtopic.php?t=146

fatdog1
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Postby fatdog1 » Mon Jul 17, 2006 8:14 am

fatdog1 wrote:Hi Ali,

Tradestation made a few modifications to the
trendline entry code.

Here is the eld and a workspace for the EURUSD.
I have it set to take a practice trade so I can make sure the stop loss and profit targets are working correctly.

You can enter the number of contracts you want to trade as an input.
You can enter intrabar on the 60 minute chart.
You can enter -1 to get the code to take a short in the inputs when the Euro trades near 1.2787.

It looks like it will trade near 1.2752 first today for a long.
It still has to touch the white line to enter a trade.





The DarvasBox caught this bull flag breakout on Friday for the 30 year bond. This shows that the congestion area can be big as long as it is
a tight range and still produce a nice trade.




I made a version of the Trendline_Colors strategy that only takes entries
as a buy or sell stop to go with the limit and market entries version.
I prefer to use it to make sure that the support or resistance in the area I am trading is still strong.
It should say "no order generated" until the price trades above or below it.
I plan to use it on GRMN later if it rallies.



I am making progress on my Weinstein strategy.
I just added a stop and reverse to it so it will take a breakdown once the bottom red line is broken. I still need to code in a few different exits to take partial profits.
The good news is I may not need the DavrasBox if I can get this to work right. The code is too much for my EL skill level at this time.


fatdog1
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Postby fatdog1 » Mon Jul 17, 2006 9:02 am

I am going to put the trendline buy stop strategy to the test some time this week on the emini Russell 2000.

We are coming into the area of support from last November between 675 and 673 for the second time this year. After that, there is a fresh area between 671.50 and 669.50.
If these two areas don't produce a bounce, it is a long way down to any fresh areas near last years lows.

Since the sellers are in control, I am going to hold out for the test of the fresh area at 671.50 to enter a long.




I will take the bounce trade up to this area of fresh resistance between 682 and 687 and sell one contract as soon as we trade there. I will tighten my stop up on the other contract. If we manage to clear that area, the next area between 697 and 705 will be my next target to reverse to a short.


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Postby fatdog1 » Mon Jul 17, 2006 9:32 am

Here is the Weinstein strategy running on the GBPUSD test chart.


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Postby fatdog1 » Fri Jul 21, 2006 3:45 pm

fatdog1 wrote:I am going to put the trendline buy stop strategy to the test some time this week on the emini Russell 2000.

We are coming into the area of support from last November between 675 and 673 for the second time this year. After that, there is a fresh area between 671.50 and 669.50.
If these two areas don't produce a bounce, it is a long way down to any fresh areas near last years lows.

Since the sellers are in control, I am going to hold out for the test of the fresh area at 671.50 to enter a long.




I will take the bounce trade up to this area of fresh resistance between 682 and 687 and sell one contract as soon as we trade there. I will tighten my stop up on the other contract. If we manage to clear that area, the next area between 697 and 705 will be my next target to reverse to a short.




"Since the sellers are in control, I am going to hold out for the test of the fresh area at 671.50 to enter a long."

If you are long from 671.50, use a tight stop since we have been down here twice this week already.
Have a good weekend,
FD1

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