Friday, August 10, 2007

System template altered


I have been busy with my new system template, partially inspired by this guy who has been trading a mean reversion for more than 5 years! He's also written a very interesting book about his trading discoveries.


The first big difference is that the system is now more dynamic. More trades and more markets can be traded.

The most fundamental difference however is that I am no longer trading against the trend thanks to a very clever MT4 indicator which tells me the daily absolute strength on any time frame. So theoretically, the only day I will be trading against the trend is on a day when the trend changes. Otherwise it is fairly clear cut. If the indicator is red, I won't take long trades and if it is Blue I won't be shorting. There are some other colors used to give signals for flat markets or when the trend is changing, but these are ideal indications as mean reversion thrives when markets are NOT trending.

I have also subsititued my jsrx bollinger for a highly modified stochastic, I find this is quicker to find reversals and exit at a more robust point of market balance than previous incarnates.

Finally, I am not using ma bands anymore. Now I am using Keltner channels which are much more dynamic and responsive to short term moves.

All of these indicators are easily downloadable here

1 comment:

Yummy said...

Why don't you try using this package of MetaTrader 4 Tools and see if it helps? You can enter, manage, and exit your trades in a fraction of the time.

It might help when you're using your new system.

Cheers!
Mark