|
Heart of Ohio | Don't have the answer to ALL those questions jpartner. Notice I ended my post regarding back testing "I wouldn't even know how to start myself"
First off, I'm learning, do we ever get done when it comes to marketing? Trying to understand what contributes to good marketing / better odds/ decisions for me. I've come to believe that a "package" of indicators is what may contribute to greater success. I would guess almost any one indicator can be shamed if not destroyed by the back testing riggers and time you describe. As you say the human element comes into play, hasn't it always? What I have come to take away from that long ago mentor / teacher broker statement is...... we/I need to try and identify what type of market are we in, trending, consolidating, sideways, parabolic? Then.... we have an indicator for that, if identified correctly.
I.e. the Bollinger Bands that I'm fond of, seem to do well in a sideways or easy trending market, last year about this time frame, I was able to pull .10 to .20 cents ea. on corn in three different trades triggered when price touched or nearly touched the upper and lower bands. (Lucky ? probably!!) In contrast I would not look for that kind of action in the heart of a growing season April to say end of July?, more of a seasonal influence considered here? It seems odds of a more parabolic harder trend type market takes over when so many unknowns about the crop (humans again?) Even then ,... when a daily bar significantly violates a band it tends to be good for at least a short quick trade, especially if MACD and Stochastics are already buried, RSI seems to help there too.
In regards to the Donchian , I included it in my template just since November, I'm watching it, it's my process. Todd's article got my attention, that's all. As he stated in the article I read "Donchian tinkered with various trend-following methods" trend is our friend, right? to continue quote "it's not clear when he came up with the four-week rule for which he is known, but it's easy enough for anyone to understand" (that's me right there, give me the simple stuff) again "The advantage of following Donchian's rule is that one is always positioned with the trend whether we understand why prices are going a certain direction or not. The disadvantages are numerous and start with the fact that one is always in the market, right or wrong (thought that humorous ... advantage and disadvantage "always in the market") "When prices chop up and down as they sometimes do......this method loses money. According to Investopedia, Test results for this system were published as early as 1970, and it was found to be the most profitable system then known" Quotation marks all from Todd's article. I will try to accurately paraphrase the rest.
He (Todd) wanted to update that data, so, he used only daily closing prices applied to December corn prices form 1995 to July 14 of 2016, the results were a hypothetical trading profit of 5.53 a bushel or 27,650 per contract, bottom line not so good, 3 cents per bu., NOT including slippage or commission. He suspected the 20 trading days was to short for corn (use 20 on beans) so he plugged in 30 days instead. To Paraphrase the results,.... 21 years, 102 trades, (roughly 5 a year), $66,525.00 profit or $652.21 per contract.
This does not mean the rule always produces positive results. The hypothetical account amassed BIG gains by November of 2010 only to lose 31% of it's equity over the next 18 mos. One could reasonably AND probably ACCURATELY assume most individuals would be done with that system forever, by then if not before. However, the ones that stick it out??? still had the 652.21 per by last summer. (less fees etc.)
Think I've read you write in the past, price matters (apologize in advance if inaccurate) I am growing to believe that more and more all the time, market "news",.... while I want to be informed and aware....... is carrying a little less weight with me each year and price indicators mean more and more. I'm just trying to separate the "chaff from the grain" on which of those I use and when.
I am a farmer, a producer of corn, beans, and sometimes wheat. For now, I only want to sell my product. Cattle, gold, etc. hold little interest for me (may spec it some day? IDK) So if indicators I use don't work for them but work for my grains (is that possible ? again IDK, a market is a market right?) I don't care right now. What I do know is .... my goal is to get better at this, with some consistency, I've grown into an 18 month marketing plan to market my crop. I use a combination of futures and cash sales to do that roughly half and half, I separate basis and price on nearly all of it, I sell increments, only once in my life have I sold a years production of corn (1/2 old 1/2 new) in a weeks time (it actually turned out very well, but my nerves nearly got the best of me) consider it a "win" when any sale I make is in the 80 percentile of the market for a month or two. I look at my charts everyday, I consider "should I sell, should I buy back nearly everyday", whenever candles on my chart are close to edges of the bands and MAC and Stochs are in upper or lower ranges... that question gets more focus and attention from me. I believe there's merit in seasonals and they play a part in that decision too. So do daily, weekly, and monthly trend lines and key levels, didn't realize till just now, it maybe the lines that fit your question best in regards to timing? When the market is tripping a combo of these and if I get a specific price from a TL or Key level, if able time wise (as in do I have it) I like to keep the DOM visible and watch for high contract counts at and around that price point. If it's huge I go a tic or so under, If it's similar to most around it or low.... makes me think something I'm missing, not seeing. I guess BB is what I trust the most right now, doesn't mean I trade it EVERY time its touched, but, when it's reasonably / seriously violated on the daily? THAT really gets my attention and the more I see it and trust it... the more I trade it, sometimes for only the day, I'm not to proud to pocket nickels and dimes, hate red screens, love green. The Doch is really just there for study and observation since I only included it in November.
So I guess I can't give you specific parameters on the whole package, but maybe each system individually can be hammered out (which broker did with some already, wasn't good, there gone) and then somehow combine? IDK like I said, I don't even know how to start, but again what I do know is... the last three years I am as happy and been rewarded with my marketing decisions as ever in my career. Have I been lucky? Some no doubt. Think I know all about the Market? Hardly, been humbled by it way to many times to let that linger for long. Might be a natural ? LOL, I enjoy it... most days anyway ! Work /try really hard at understanding, discovering, and wrapping my head around what works for me.
The forks, Andrews, you and others have posted in the past have sparked my interest and attention. Next on my list to learn and apply. Would welcome help with that. Think my email here is good. This all takes time for me, have kids at home yet, off farm work, and a farm and equipment to tend to. A girlfriend I like to see once in awhile as well. Doubt I've answered your questions very well but putting what I'm trying to exercise into words has actually been a very good exercise for me. Expressing the reasons for it verses a "gut" feeling. So honestly.... Thanks for the questions and input and you take care as well.
| |
|
chart template PATIENCE!! kind of long
