Sunday, May 01, 2005

One Bar ahead

Hilarious discussion on Cheese's Blog:

Woodie frontrunning the whole room with the WCCI (btw in 2003 it was based on the Kurtosis indicator (Excel VBA example), which is available in Tradestation and Sierra as far as I know. So put it on your charts and see what it tells you)

Do me one favor. Take your trading chart and take a look at them. What would One Bar ahead of your tradesignal give you as Entry?

At least on my Eurocharts, just looking at 8h of trading, my trades on average would have gone 8–15 ticks against me, before going in the direction I would have taken the trade, having an early signal present. And that does not include all the trades where I would get in one Bar ahead, but then the Signal never materialize.

Looking to be in one Bar ahead is just another name for the search for the Holy Grail. But instead of the Holy Grail you would end with a lot more Stops and losing trades, before hitting the one big home run 100 tick train, which of course you leave at the next station with 10 ticks profit, as you don’t want to lose your precious profits, while forgetting that you already paid 5 stops before boarding this one.

Being in one Bar ahead is not the way to wealth and happiness!

  • Trading your Plan is …
  • Recognising what works for You is …
  • Building your mental strength is …
  • Trust yourself, not someone else, is…

the secret path to wealth and happiness

 

4 comments:

Anon007 said...

I agree croc, that being "one bar ahead" is no grail, especially in today's efficient markets. But in 2003, the claim of having a secret CCI formula that got you in a bar early played well to the troops. It's main function was to be the hook for the Vegas Convention, or maybe some TAL soon after that. And it worked brilliantly for that purpose.

Remember that in 2003 the switch was out of the efficient (no follow thru) ES, and into the new ER2 and YM contracts. And for awhile there there were well defined moves without the intervening long chop periods. So, trading the recommended 3 and 5 min charts back then, with the "80% ZLR win rate", and getting in before a 5 min or 3 min bar printed seemed like a good idea.

And in fact, it worked when the ER2 daily volume was only 20K, compared to today's 140K. Frontrunning the ER2 with an 89 tick chart, or a 1 min chart, did not present a large stop risk in 2003 and early 2004. And knowing that a room of 500 traders waiting for the moderator to take a trade at the bar close, in new and thin markets, certainly would increase the confidence of anyone with a one bar early indicator.

Today, I need to filter my entry signals to add lag, making certain the price is really moving in my direction with some momentum, before I enter. This was not a problem when the WCCI was being touted as the next grail.

It's also interesting how the WCCI was running only on TradeStation, which had been supplied free to the moderator. But only showing the WCCI a couple times a month to the room was not exactly the exposure TS was hoping for, so they pulled the free TS, and we all know what happened after that.

Globetrader said...

I don't know of any frontrunning in 03, I just know that I looked at the WCCI back then and it was even more erratic than the turbo or the cci of the cci, which was tested as well

dloomis514 said...

http://forum.esignalcentral.com/showthread.php?s=&threadid=12015&highlight=Kurtosis

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