TRADING STRATEGIES

Counter-Trend Trading with Simple Range Exhaustion System
Filed under: Trading System That Works, Trading - General — Lawrence Chan @ 11:12 pm Email Author

http://newsletter.neoticker.com/?cat=11

Here is an extremely simple trading system that violates the classic rule of trading, trend is your friend, with very good results. It is an excellent example that illustrates how counter-trend approaches work.

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December 21, 2005
Better OddBall System
Filed under: Trading System That Works — Lawrence Chan @ 9:59 am Email Author


The original OddBall System no longer performs since end of year 2001 (see OddBall System - An Update). Here is an attempt to improve the system.

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November 13, 2005
Stock Trading Using Stochastics (End of Day)
Filed under: Cool Sets, Trading System That Works, Trading - General — Lawrence Chan @ 12:22 am Email Author


Stochastics is one of the most widely used technical indicators in the world. Surprisely, most traders like to modify the original indicator into something else because they find the original implementation too noisy.

I am going to show you a trading setup using the original Stochastics SlowK indicator that works very well on daily data across many stocks that I think you will consider re-examine this classic technical indicator once more.

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November 5, 2005
Formula 301 - #4 Basic Consensus System
Filed under: Trading System That Works, Formula 301 — Lawrence Chan @ 8:42 pm Email Author


I am going to present a system that takes multiple technical indicators as part of its decision making. By combining these indicators through a simple scoring system, we get a very profitable daytrading system that works year after year.

(Lawrence - this system was designed many years ago (before year 2000) and was originally created for a trading platform that was very popular at the time. I was going through some old notes I have and adapted the code into NeoTicker. I am very glad that NeoTicker can implement the same system in 1/10th the amount of code required to implement the system. The original money management code has to be stripped due to various reasons, including NDA restrictions.)

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October 26, 2005
Moving Average Is More Than What You Think - Part 4
Filed under: Indicator Experiments, Trading System That Works — Lawrence Chan @ 11:00 am Email Author


The trading system presented in Formula 301 #3 is a moving average based trading system that works year after year.

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October 9, 2005
Classic Day Trade Modelling
Filed under: Tips & Tricks, Trading System That Works — Lawrence Chan @ 7:41 pm Email Author


Before we have access to intraday day data, how do we test trading systems that last only a day?

Long time ago, thats all we have access to, and I think it is a good idea for our readers to see how traders utilize classic bias without the help of intraday data in creating day trading systems.

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August 25, 2005
Advance Issues Momentum - An Update
Filed under: Indicator Experiments, Trading System That Works — Lawrence Chan @ 9:03 pm Email Author


I and Louis have written an article called Advance Issues Momentum published in the Technical Analysis of Stocks and Commodities magazine, August 2004 issue. Here is an update about this interesting indicator.

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August 8, 2005
Oddball System - An Update
Filed under: Trading System That Works — Lawrence Chan @ 10:15 pm Email Author


OddBall is created by Mark Brown, and was featured in Active Trader magazine. It is a trading system designed for trading the S&P index future (or the emini counterpart). The signal generation of Oddball does not depend on the price data itself. Instead, it is based on the Advance Issues data from NYSE. We originally posted this system’s implementation in NeoTicker and its performance back in 2003.

Here is an update of the current performance of this interesting system.

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August 7, 2005
In Early Stage Of System Development, Avoid Position Sizing
Filed under: Random Thoughs on Trading Systems, Trading System That Works — Lawrence Chan @ 1:00 pm Email Author


Many beginners in trading system development like to play with position sizing scheme. It feels great when you get a great equity curve with spectacular performance by simply twisting what position sizing rules to use and experiment with various sizing parameter settings. I have some bad news for you - such system will not likely perform in real life.

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August 3, 2005
Daytrading The Emini - An Update (Stochastic Midpoint Reversal System)
Filed under: Trading System That Works — Lawrence Chan @ 11:15 am Email Author


Back in August 2003, I have an article called Daytrading The E-mini published in the Technical Analysis of Stocks & Commodities magazine. It described a technique called Data Reduction that improves certain type of indicator performance drastically. The technique is applied onto a basic trading system that works very well at that point in time. We are going to take a look at the system today to see if it is still performing as expected.

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July 31, 2005
You Need More Than A Single Setup
Filed under: Random Thoughs on Trading Systems, Trading System That Works, Trading - General — Lawrence Chan @ 2:46 pm Email Author


Trading for a living requires a lot of discipline. It also requires a lot of streets smart if you trade discretionarily. One thing that many beginners missed is a basic concept of having multiple setups learned and practiced correctly.

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July 29, 2005
Moving Average Is More Than What You Think - Part 3
Filed under: Indicator Experiments, Trading System That Works — Lawrence Chan @ 9:07 am Email Author


Some readers are very forthcoming, they simply email me and complained to me for wasting their time in talking about moving average as something that is useful at all. I replied through email asking for their patience and wrapped up this third instalment as soon as I can.

Moving average based trading systems still exist and work very well still, even today. Here is a basic scalping setup based on average range channel, which in turn is based on simple moving average, that works very well for many years.

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July 27, 2005
Advance Issues Pattern 2
Filed under: Trading System That Works — Lawrence Chan @ 10:56 pm Email Author


After demonstating a pure daytrading short signals in Advance Issues Pattern 1, we are going to look at the data to see if we can figure out a daytrading pattern that works from the long side. Since year 2000, the S&P 500 is in a major downtrend, is it possible that there exists long side pattern that can make money?

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July 23, 2005
Advance Issues Pattern 1
Filed under: Trading System That Works — Lawrence Chan @ 11:00 am Email Author


NeoBreadth enables our users to collect user defined breadth data within NeoTicker, both in real-time and in reconstruction of historical breadth data. The analysis of customized market breadth data is not a common topic in technical analysis as NeoTicker is the only platform that can do that properly. How useful are customized breadth data? How do we utilize these information?

I’ll present a simple trading system based on advance issues of S&P500 as our first example on how to tap into the power of complex breadth analysis.

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June 28, 2005
Open Range Breakout Daytrading System
Filed under: Trading System That Works — Lawrence Chan @ 11:37 pm Email Author


Open range breakout system is a well known concept. It is a variation of the classic N-bar breakout system. This concept is so widely talked about because it works. I will show you a new twist of the concept that is never discussed anywhere else.