Saturday, February 26, 2005

Winds of Change

Most will know me as croc, Globetrader was just an identity used to surf Teddy's CCI Room while I was still moderator in Woodies CCI club.

But Globetrader actually describes what I'm doing quite well:
Trading futures around the world.

In the morning at 8.30 CET I trade the afternoon session of the HSI in Hongkong.
30min later the DAX opens in Frankfurt, Germany.
At the same time I watch and trade the UK open of the currency futures trading, especially Euro, British Pound and Yen.
In the afternoon 2.30pm CET most important US news are released. I watch, but stay out of the market usually, as news releases creamed me in my earlier career and I'm still hesitant.
4.30pm CET sees the open of the US indices, which I trade normally until 6pm CET.
Later I usually just watch the market but do not trade it anymore, even if recently I found myself taking trades after 9.00pm CET into the US close at 10.15pm.

If you have followed my career in the WCCI and my trading progress in my trading journal on Trader Dave's e-minitraders site, (a copy is now available on http://www.futures-trader.net when you follow the link to the J"ourney of a Futures Trader"), you know I have been ranging in my account for about two years trading small but always real.
Slow and careful progress got smashed by a few spectacular losses bringing me back to square 1 or below, only to build up confidence again, to stand up, to continue trading, to press the trigger, to enter a new next trade. I would do it again, it was the only way to learn what I have learned in trading and to breing me where I'm now. Trading will give you no quick profits, it's a very difficult profession, as it will show you all your demons within yourself.

I stopped writing this journal as it started to repeat itself. Instead I joined in in some discussions on NQoos Yahoo list, and recently adding some of my thoughts on the famous cheese blog.
As this blog is now closed for new comments, it's time to move on.

This time I will try the blog format. Comments are welcome, as long as they pass the "Junior High School Test" Cheese introduced.

So where I'm now?
I left the WCCI, because I wasn't content with what I was supposed to say, what triggered my trades and so on (The resignation letter can be found on my website as well, so I spare you a detailled explanation here). This still holds true.

I went, where all traders coming from the WCCI seem to drift to: Teddys CCI Room on Paltalk.
In a flurry, my charts changed as long known information finally was put together. Unconscious understanding of the markets found it's way to the conscious mind and was expressed on my charts. Just a mention of Olmikey's slings where he is using stochs, let me add them to the charts, let me see, what I already knew: A Stoch 7,3,3 is nothing but a zoomed up cci 20. A chart showing cci80, cci 50, cci 34, cci 20 and cci14 within one subframe with the Sto 7,3,3 below showed, they all peaked or bottomed at the same bar. The longer the cci got the farther up or down it moved relative to the zeroline, while the peaks and troughs remaind the same. The Sto just swings from top to bottom of the subframe and back, having the highest range compared to the cci.

CCI can give you range and trend information within one line.
At a cost: The swings are not as pronounced as they are on a sto. This is the problem with the cci trend trades: The ZLR works nicely in a trend, but if there is no pronounced trend, you second guess the ZLR and you will have multiple false ZLR's until it finally rejects really.
With the Sto you have a similiar problem, but the Sto keeps direction longer than the cci, meaning it will not hook as fast as the cci, until the real bottom/top is near. It's sure no holy grail, but I like it more, as the swings are so much clearer.
STO needs a second longer Sto (I use the 20,4,3 %D line) to tell you when you are in a trend or not, and once you are in trend mode (The longer Sto being above 75 or below 25) you just trade the slings of the Sto 733, otherwise you trade the Sto733 patterns alone.

Being used to CCI, I now trade the STO 733 on a cci scale, which works nicely, once you get used to the larger swings. All cci patterns work with the Sto 733, PT's are common, but for me divergences are the pattern I see myself trading most, especially against price support or resistance.

For about 8 weeks my trading flourished, I'm up 27% for the year, but last week I took my first setback. 4 days in a row I'm down or barely breakeven.

What changed: I'm again in the process of changing. And this change is a most difficult one for me. I'm trying to turn myself from a scalper to a swing trader.

If you ever joined Teddy's room, you will know, who got me influenced in a manner, that I'm willing to take the next step now: Antiicc

Not a guru, just someone telling the room that he trades with targets, not small targets, but big targets, which you get usually not within minutes but within hours sometimes.
I was able to use this information for my own trading. Holding trades for a longer period of time is something I already do at times: When I'm down and HOPE for a comeback.
But holding onto a trade showing 10-15 ticks profits and seeing them evaporate to BE+5 only to HOPE for a bigger swing of 30 to 40 ticks is something I never ever did intentionally. I always took my 6-10 ticks profit and then I saw the contract take off without me, as I did not find a reentry point.
I'm trying to change that. With additional information on my charts giving me swing targets based on daily or recent volatility and with stops based on volatility. If this makes a difference we will see.

What I sure can say is, that I'm going forward again. In trading you need to find your own way. You can and need to use information given from other traders, but you have to filter it into your own trading system, where you feel at home. Every day you have to look forward, you need to see new things, try them and eventually use them in your trading. You need to keep the edge.


Globetrader

6 comments:

Momentum said...

Croc, you are doing more than trying to stay in a trade longer - you are changing your business. To me, the success ful trade is not how many tics you made but how much of the move you captured. So whether you get 60% of a 5 point move or 50% of a 25 point move then the success is the same

Fitzy40 said...

Croc,

All i can say is what works for my style. I am very happy scalping, i use gb's targetting method and it has served me well. If i wanted to start trying to take swing trades for more points all i would do is add a contract for that purpose. I would still do my normal trading as it makes money. If your old style makes money then continue but just add another contract to test for more points. If it aint broke dont fix it LOL.

rburns said...

Croc Best of luck with your Blog. I am sure you will do a knock out job. R Burns

jv said...

From what I have recently observed, the CCI is used (or abused) for scalping ticks out of a given signal. You mentioned that you want to transition from ticks to points, from scalping to position trading. Instead of taking 5 or 10 ticks profit, your looking for 3 or 4 points of profit (30 or 40 ticks in the ER for example). This is a smart long term move on your part, I commend you for taking this step forward in your trading career.

CCI can still be used for position trading, but you will be forced to ignore the string of premature exit signals that trigger before your profit target is finally reached. This is the exact reason why I do not use the CCI or Stochastic for my trading. I choose not to subject myself to these premature and false exit signals.

I think this is the struggle the good cheeze is wrestling with lately. Seeing the great entry points he has been getting, and then letting that price go for a measly few ticks just to watch the trend run 4 or more points without him. Perhaps what you learn, and share here will be of benefit to him and others struggling with this common problem.

I wish you the best with this new blog and good luck with your trading !
Tack

blueandyellow said...

i am very interested in your comments and look forward to regularly reading your ideas and observations...

olm said...

Chris.....we go quite a ways back in trading as you know......i want to send you my regards and my best wishes on your new blog...since you are a class guy ..it is only reasonable tht your blog become a source of learning and mind explansion

when i heard last week or in the last few days tht you account was up 16 percent one month and 24 percent the next...i was so pleased for you....lots of folks just cant seem to make the turn into ongoing and consistent profitability.......i have seen you struggle at times but there has never been the slightest doubt in my mind tht you would turn the corner tht all traders know so very well...

Olm