New swing trading system

This link takes you to a new system I use for swing trading.

I trade this along my day trading system


http://www.paulus10-trendseeker.blogspot.com

Trade of the week 18th - 22nd june

Profit per contract on week $4,800

had several trades around this amount last week

Trade of the week

11th June - 15th June

For this example I have inculded signals that came after the trade of the week just to show the set ups.

The results were following

1st trade in blue + $430

2nd trade in red + $60

3rd trade at A - $20

4th trade at B + $60

Total = +$530 in 64mins per contract ,costs around $16 per contract

Trade of the week

4th June - 8th June

Due to time restaints I havnt had time to post a trade for every week since my post in April,I can say every week since then to now has been profitable.

Trade of the week

Week 23rd - 27th April

Week 16th - 20th April

Week 9th - 13th April

Week 2nd - 6th April

Week 26th March - 30th March

Tiger in the long grass

Tiger in the long grass..

You can run around the plains all day getting frustrated stressed and tired, taking a small gazel now and then but losing many more

Or You can be a tiger in the long grass.. we wait,we are patient,that gazel looks nice but its just not right so we leave it.... here comes our meal nice and fat and it almost walks into us ...we put out a claw and its ours..we eat..we sit back and wait for the next meal .

I want to be a tiger in the long grass -

Paulus

Trading figures for February and March

Special note - This week we have seen exception market volatilty hence the large increase in profit for the week 26th - 2nd

Click on chart to enlarge

This is trading 1 contract on the Russell 2000 future

Thses charts can be seen www.dacharts.com go to Daily charts then click on date you wish to view. Charts are under PAULUS

Any views, comments, tips, recomendations plesae send email to paul.naylor5@btinternet.com

Part 1 - A few comments on day trading in general

Id like to start by saying im no guro or trading genius I like many other traders have strived to become succesful in this very difficult arena called day trading.I often read books that had comments like ..

'I lost for 3 yrs broke even for 3 years then made money in my 7th year'

I now know that in the majority of cases thats true.As an electricain takes 5 years a doctor take 10years why should a trader not take 2-3 years to become adept at his art.This blog is about my own personal adventure the implementaion of a system and the evolution into the current system.

I would appreciate any feed back,suggestions,and or critisms to be sent to me direct at

paul.naylor5@btinternet.com

Paul

ps oh ..and yes I know i cant spell !


A few comments on trading in general..

Is it true that 90% of people that try to make money day trading fail ?
I can only comment on the people I have known over the last 8 yrs,but that percentage figure is about right

Do you need to be full time to make mony from day trading
No but you do have to watch what times you trade

Do you need to be wealthy to start day trading
You can start with as little as £1000 depending on the future you wish to trade

Do I need to take any special courses
No but knowledge of account managment and risk control will increase your chances of success

Can I trade as soon as my account is open
Yes but a wise precaution would be to paper trade 1st ..this is called simulation trading and will help you get to know the charting software,broker screens,and execution software all of which you have to thoroughly know

Part 2 - The 1st steps

The 1st steps

• Open an online broker account
• Transfer funds
• Subscribe to a charting service
• Subscribe to a data feed service
• Subscribe to trade execution software
• Trade on simulation for at least 2 months
• Trade on the lowest $/point future when live so any loses are kept to a minimum,you will need to trade live for at least a month or untill you become confident in the trade execution software.
• Move up to a bigger $/point future
• Increase futures contractsBuy fast car, big house, young wife or 2

Part 3 - If you want to fail read on

A few simple steps which if followed will ensure you fail when attempting to day trade the futures markets

Never try to outsmart the market,no matter how big,strong,intelligent,clever,old ,young,confident you are you can NEVER outsmart the market in the long term ,if you think you can you wont and you will fail

Never get emotionally involved in a trade..click the mouse forget the trade.. if you get involved at a mental level you will fail

Always use a stop and stick to it,never move it never cancel it never ignore it if you do you will fail

Never try and get back losses by trading harder or bigger than your management rules say so if you do you will fail

Never hang onto that losing trading hoping it will come back..99% of the time it wont and you will fail.

Never lose your temper or shout and scream..the market cant hear you it doesn’t care and you will have to take that next trade on an uneven keel..if you do you will fail

Part4 - If you wish to win read on

A few simple steps which followed will give you an edge when attempting to day trade the futures markets

1. Design a system that works on the mechanical principle of trading
2. Keep emotional descion making to the bare minimum
3. Accept that once in a trade the outcome is out of your hands completely
4. If you have a losing trade mentally move on and wait for the next signal
5. After a losing signal ask yourself ‘can I learn anything from this’. ‘did I do anything wrong’
6. After a winning or losing trade check in your trade execution software that you are flat in the market and hold no positions. Sometimes after a busy day you can find you are still live 1 position, that position could take all your profits and needs to be closed. Check and recheck after every trade.
7. Have a list of emergency contact numbers that can put you in touch with your broker in the case of your software going down whilst in a live trade.
8. If possible have a UPS so that if you have a power cut you still have time to close out any positions
9. Never rush into a signal because the market 'looks long or short' wait for a valid signal.
10. Sit on your hands if you have to while your waiting for a valid signal , stay out of the market,one reason for failure is peoples inability to remain on the side lines and they over trade trying to 2nd guess where the market is going to go - no signal = no trade = simple

Part 5 - Designing your system

This on the surface looks a very easy thing to do, but in reality needs a huge amount of time investment, self discipline and sacrifice. If you think you are going to buy a ready made system from the internet which is going to be profitable think again. Its true there are several excellent systems out there but from my experience they always have just that final piece missing. My own system is a combination of idea’s from several bought system over several years.

Just a few include systems that use

Volume information
Price patterns
Support and resistance areas
News
Mathematics
Japanese candle patterns
Point and figure charting
Wave principles
Moon and tide information

Now add to this list the 400 or so technical indicators that you can superimpose on your chart and you get a fair idea of just how big the subject is .If that’s not enough now add to the equation the time frame of your chart 1min 2min 3min etc up to daily and an unlimited number of tick charts 10 tick 18 tick etc etc.

If that’s not enough we now have to look at the number of chart we will use. Will we use 1 chart on say a 1min time scale or 2 chart of say 1min and 5min to determine a signal. Or if we are designing a signal for the Ftse do we want a chart up of the main US future ,after all if the US market is in a deep down trend do we want to go long in the Ftse.

Now you can see what just a huge subject this is.I think I can quite honestly say that in the 8yrs I’ve been trading 6 of those years have been spent in the search and the on going development of my system

Part 6 - Type of market conditions

There are various market conditions that occur through out the day that your system will have to deal with.

1. A trending market
2. An oscillating market
3. A range bound market
   
   A trending market is one, which has 2 conditions. The market is going up , the market is going down. See the example below

An oscillating market is one which is not making new highs or lows to any great extent, more it is ‘oscillating up and down in large wave like formations See the example below.

A range bound market is one which is stuck in a small range of just a few points, it seems to just meander up and down without any force or momentum. See the example below

No one system can deal with all these conditions. A trending system will fail when the market moves into an oscillating mode. An oscillating system will lose when the market moves into a trending mode. Both will suffer in a range bound mode.

Part 7 - Costs

Here is my list of trading software that I have found reliable. The costs are based on a real time package which is what is required for day trading.There are many more available

Charting software http://www.ensignsoftware.com

Ensign windows.. cost per month = £21

Brokerage firm http://www.interactivebrokers.com

Interactive brokers .. Minimum deposit required = £2,700

Commission (cost per round trip trade ) US futures £2.60. UK = £3.40. German = £2.80

Exchange fee’s US = free UK = £32/ month. German = £6 / month

Data feeds

If using interactive brokers the data feed is free, this feeds all market information into your charting software. If you do not wish to use interactive brokers as your online broker you will have to use a data feed company and the prices vary from £20 to £100 a month

Trade execution software. http://www.autotradersoftware.com

Again there are a few of these ranging from £20 to £60 a month I have listed the only the software I use

Autotrader software one time cost of donation £30

Broadband service .

BT broadband £26 / month

Monthly costs before placing a single trade

Ew £21+ Exchange fee +£32 BT + £26 = £79 or £3.95 a day

To put things in perspective if you win just 1 point trading the Ftse future per day you will make £10 less round trip costs.

If you win just 1 point per day trading ER2 you will make £55 less round trip cost.

Compared to some other businesses trading has very low over heads.

Part 8 - The signals

I have 3 signals that I use for day trading all are mechanical in there set up

1. Regular signal .. counter trend based
2. Delayed signal.. counter trend based
3. Inverse signal .. trend based

Each signal can be used to go long or short in the market

Each signal has a series of green lights, and each light has to be green for me to proceed to the next.Hence if green light 1 does not complete but light 2/3 and 4 do the signal is invalid.

Only signals with the appropriate light are system signals and will be traded.

Regular signal - 4 green lights .. Price, Indicator 1, Indicator 2 , Candle formation

Delayed signal - 5 green lights .. Price, Indicator 1, Indicator 2 , Candle formation, Open or Close of trigger candle,

Inverse signal - 4 green lights .. Price, Indicator 1, Indicator 3 , Candle formation

For my own security I cannot disclose what each indicator is, the settings of each indicator or how I use it.Neither can I disclose the time frame of the chart.

Below are examples of all 3 signals all on the FTSE Future

This is the regular signal and is counter trend based

This is the Inverse signal and is trend based

This is the Delayed signal and is counter trend based

Part 9 - The exit

Many a profitable system can still lose over the long term if your exit is not finely honed.
We can exit out of a trade several different ways depending how aggressive we want to be.

But the exit is split into 2 categories.

The target which if hit will exit us
The stop which if hit will exit for us.

Lets deal with the target.

1. Do we want to use a static target for every signal regardless of the volatility of the market and the time of day ?
2. Do we want to use a flexible target that’s makes allowances for the market becoming more volatile ?
3. Do we want to use a technical target .ie if we go long 10 points below the high of the day..would the high of the day be a good target ?
4. Do we want a technical indicator to act as our target ie..if the trade moves in our direction and keeps on going..hence the indicator will do so always and increase our target automatically.
   
   Lets deal with the stop

1. Do we want to use a fixed stop that remains static no matter how far the trade moves in our direction?
2. Do we want to use a sliding stop that will follow our profit on the trade at a discrete distance?
3. Do we want to exit the position when a technical indicator tells us to do so?
4. Do we want to exit the position when the technical reason for us entering the trade no longer exists, ie we go long just above the low of the day and 5 minutes later the low of the day gets broken. Do you want to exit or hold ?
   
   One thing is for sure when looking at the above lists and one I think especially applies to the stop.

You have to exit clinically and quickly.

• Do not dither
• Do not think
• Do not make a new technical appraisal of the situation.
• If you are told to exit or the technical reason for you entering the trade no longer exist.. THEN EXIT.
  
  In day trading a thought process of 30secs could cost you hundreds of pounds esp if trading multiple contracts.
  
  This is where written rules play a big part. In my own trading my whole system is rule based and where possible black and white, try to think like logical programme and think only in black and white or red and green
  
  If A and B happen do C
  If C and D happens do E
  
  The rules will save you money and save your stomach lining
  
  Lets say you go long the market and you use a moving average to exit your trade, as soon as the price breaks down and closes below that moving average you MUST exit. Do not get caught in the emotional trap of trying to convince your self the price may well come back up. It may do .........but you need a black and white approach to get you out of a potential losing trade,and when your out and in no position the pressure is lifted and you can look for a new signal
  
  In my own trading..................

• I personally use a fixed stop that remains static no matter how far the positions goes in my favour.
• I use a dynamic target and expands and shrinks and the market expands and shrinks.

On the inverse signal for example - I use an ema to take me out of the position, or a signal in the opposite direction what ever comes 1st.If I am looking to close my inverse signal with a signal in the opposite direction I can only do so as long as I have permission by another indicator,if no permission even though I have had a reversal signal I stay with my original trade ..all rule based all black and white

With targets my own thinking along these lines are ..

If the market is oscillating in moves of 5 points do you want to take ½ point as your target ? .. No …ok so lets take 3 points after all that’s a nice profit thank you very much.

30 minutes later the market is oscillating in moves of 1 point… hmm .. Do I want to use my old 3 point target.. No ?…… the old ½ point looks good to me now.

We need a target that expands and contracts..

This way we can take figures like +1, +0.50 +2 +5 +0.80 etc etc all winning exits.

Move, change, experiment,consider........ but do it all with a set of rules..write them down laminate them and fix them near the PC

Part 10 - Consistancy and time restraints

Consistency and time restraints

Due to the fact that both systems listed here are being traded and the fact that Im also reviewing 2 or 3 other system at this time this blog will not be updated for the next month.

This will reduce the pressure on me to keep the blog up to date and gives me a few more hours away from the PC.

If any one visits this blog wishes an update please email me.

paul.naylor5@btinternet.com



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Consistency

A word about consistency by this I mean the absolute necessity to take every signal and trade every day

Day consistency

Take 2 traders A and B both trading the same system….. this system

Trader A will trade 5 days a week trader B will trade 3 days a week.. The results for the week are as follows

2 losing days 3 winning days

Trader A has made a profit Trader B has made a loss as the 3 days he chose to trade he unfortunately captures the 2 losing days.

Signal consistency

Now break this down in signals trader A and B again

Trader A takes all signal and makes a profit trader B has a different mind set and does the following

Signal 1 wins

Signal 2 loses - he didn’t like that

Signal 3 loses – trader B decides to stopas the market ‘looks’ a bad market to trade

Signal 4 wins and this win makes several point – trader B kicks the cat and makes a descion to take the next signal

Signal 5 loses – trader B has now had 4 trades with only 1 win. - He decides to call it a day and quits, after all he is clever and limiting his losses

Signal 6 to 10 win and the day ends – he didn’t take them and stares at the screen in disbelief

Results

Trader A has had 10 signals with 7 winners a strike rate of 70% and makes a good profit

Trader B, same day same system took 4 signals with 1 winner and a strike rate of 25% and he loses miserably on the day.

If you decided to trade mechanically you must consol yourself to trade every day and take every signal.

Don’t try and kid yourself you know what a good market looks like..ok its true some period during the day can be rough but are you good enough to call it ?

I know Im not

Part 11 - ' Its all in the mind '

Is it all in the mind ...

I dont know , all I know is that the fear comes from the mind.When I 1st started trading futures 5-6 yrs ago I was absolutly terrified .My hand would tremble over the mouse and my stomach would be doing flip flops ... beacause of all that addrelanin in my system Id also have bad stomach which used to send me running to the toilet very 5mins.

When ever I closed out a trade win or lose I would need to go and rinse my face with cold water and then walk back into my office to take the next trade.On one occasion I lost £600 in the AM session of the ftse and was seriously depressed at the thought of having to go back and trade again in the PM session, but I knew if i walked from this .....its over.

Somtimes my execution software would freeze after i clicked buy or sell in the market..

was I filled ?
what price ?
what do i do now ?
Do i try and close ?
quick on the phone ?
engaged...ARGhhhhhhh

Every day i used to say to my self

Can I do this for a living .

We each have a comfort zone .. by pushing yourself into new situations we increase that comfort zone untill 3months down the line what used to seriously scare us , is now an enjoyable experience.

Here are just a few phrases Ive taken from other sites .. They were not written for or about traders ..



Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.
-Thomas Edison

Careers, like rockets, don’t always take off on schedule. The key is to keep working on the engines.

The man who moved the mountain began by carrying away small stones.
- Chinese Proverb

I'm not afraid of storms, for I'm learning to sail my ship.
- Aeschylus

If you are patient in one moment of anger, you will escape a hundred days of sorrow.
- Chinese Proverb

Softly, softly, catchee monkey, is the West African rendering of a very valuable precept. An awful lot of men fail through lack of patient persistence.
- Sir Robert Baden-Powell

The greatest pleasure in life is doing what people say you cannot do..
- Walter Bagehot

The pleasure of risk is in the control needed to ride it with assurance so that what appears dangerous to the outsider is, to the participant, simply a matter of intelligence, skill, intuition, coordination — in a word, experience.

Part 12 - The ameba effect

This is a new post after quite some time on this blog.One thing bothered me about the listed system - It created to many signals.

Like the ameba the system has changed to suit its surrounds.This system based on the listed system gives me 3 major advanatges as I see it

1. A better risk return
2. A better chance of catching the bigger move
3. Far fewer signals around 10 per day as opposed to 20.

The system is far from perfect because there is no such system.

If we win on average more ticks than we lose per trade we have stacked the odds in our favour

If we win more days then we lose we have stacked the odds in our favour

If we win more weeks than we lose we have stacked the odds in our favour

If we win more months than we lose we have stacked the odds in our favour

We have to stack up the odds in our favour to win in the markets.there are other ways to stack up the odds and I will give you my thoughts on that in part 13

Part 13 - Stacking the odds

There is a word in trading that few people like using but to me its a must especially when you go from paper trading to live trading..That word is LUCK

Imagine you’ve spent 3month paper trading building your account up 5 fold ..and then looms the big day..the live day.

And just your luck .. The market moves in a range of just a few points all day and you lose .. And guess what ...it never happened once in the 3months you paper traded. Well that’s just bad luck and it does happen and it happens alot more than people admit. We need an element of luck when we 1st go live we need nice ranging days with clearly defined signals.

I think its a crying shame if a new trader does all the right things and then decides to go live in a week the market gives his system the worst draw down its ever seen. The big problem here is that I don’t think there is a thing we can do about it. Perhaps you could look forward and see what news announcements are coming out that week and try to steer clear of any weeks that are full of impending results and reports.

If Nato decided to invade Iran this coming week I don’t think Id be too inclined to start my trading career at that time.

Another way of perhaps increasing our odds of having a good start is to look and how many losing trades in a row our system has given over the past 6 months. Lets our system has had at worst 5 losing trades in a row, and it is currently on 1 .... I personally would rather wait until we were on 4 or 5 before I started live because the odds of a 6th and 7th must be more remote than a 2nd or 3rd which is the case if we started now.

Or on the flip side if our system has a record of 7 winning trades in a row over the past 6 months and we are on 6 I personally wouldn’t think the odds are stacked in my favour of getting a 7th.....but if im on 1 or 2 then I think Id be more happy.

This timing need only be done when going from paper to live to try and give you the best possible start.. Would I for example wish to start trading in August when there is a high chance many traders will be taking their holidays which will be probably reflected in the lack of volatility in the market.

lets don’t kid our selves here .... we need volume and we need traders ..without volatility we fail simple as that.

Its all about stacking the odds

Part 14 - We adapt or perish

I think its important not to be hard headed about your trading system and method.If you see that a change will give you more success, cut down losses, or reduce stress then take it,its still your system.

Where would the car be without the natural evelution of trial and error and learning from ones mistakes.

My original system was giving me to many signals with an unsatisfactory risk return.

I now use 2 parts both quite powerful in thier own right.. a simple chart formation and a way of using indicators which will show strenght or weakness at a given point at a given time

Look at the chart above its quite easy to nominate the rough entry areas as I have done so just by using a simple chart pattern.The chart pattern is a simple but powerful ...... its one used by traders all over worlds markets

To have this setup in our arsenal makes good sense.

Its simple a double top or a double bottom.

But how do we find the double tops and bottoms ?

Part 15 - Finding the tops and bottoms

I must stress that the information in this blog is not a new ground breaking technique rather its the accumulation of several years and several course with a good degree of trial and error.

A double top or bottom is an easy thing to find by the eye, if the low of the day is 1050 and we again come down to 1050 and the level is not broken we have a double bottom, its just an area of high support and area where more buying than selling took place taking out the ask price and raising the price.

This is a chart pattern and many traders trade on just this type of situation with using a single indicator.

So we have our 1st criteria a perfect double top or bottom,but what happens if the price goes lower by just a couple of ticks or doesn’t quite come down to the last low by the margin of just a couple of ticks.This is called a technical double top or bottom but we need precise measurements after all is it a double bottom if the price comes to within 10 ticks of a previous low ?. These are my criteria for technical tops and bottoms, you may wish to change them or look out for just the perfect set up.

For a double bottom

• The price must come to within 5 ticks of the previous low


• The price must not go beyond 3 ticks of the previous low
  

For a double top

• The price must not go beyond 3 ticks of the previous high


• The price must come within 5 ticks of the previous high

We now have set our mechanical measurements for find technical tops and bottoms, we can kick the emotions to one side. If the price doesn’t come into our range of technical top/bottom we forget the setup and relax.

But what do we use to determine the point at which we measure the tops and bottoms. We use an indicator to guide us, again a mechanical a black and white way

Here is a simple explaination of the above

Part 16 - The actual top

We need a mechanical way to find our tops and bottoms, without this we are guessing...sure we may get it wrong but if its mechanical we should get it right more times than its wrong and that’s all we are after.. we want to stack the odds in our favour even at this stage of our signal selection process

Have a look at the chart below,

Now lets look at what actual happened...see below

And here is why i knew to leave it alone, we use a stochastic momentum indicator set to change colours on ticking up and down. lets look at the same candle action again.

As you can see to take the trade here rt to even consider it would of been a big mistake the stoch is telling us there may be more upside. Lets move to the actual signal that took place a few minutes later .I will pick out the entry but as yet you do not know why it was at this exact point.

We know just one thing we have had a technical double top and the stoch is saying 'I think there is no more upside at this point' - see chart below

To use the Stochastic momentum indicator to find the high candle its very simple.

• We find the Stoch peak ( where blue change to red for shorts)



• We then move back candle by candle until we find the highest high .. and I use the high of the candle ie the top of the wick.



• As soon as we get a candle that has made a lower high WE STOP

Look at the example below.

Part 17 - Next stage in signal selection

We now have our double top we have found this using the methods in section 16.

• We used the stochastic peak to determin the high candle




• We made sure we had a difference in the 2 highs of no greater than 5 ticks

We have now found a strong market pattern in its own right ..a double top .. this will give our signal a greater chance of success.We now have to go back to the stochastic momentum which I will now call the SM and use it to creat another part of the signal.

The way we use the SM is called Diversity which basicaly means that if price has made a technical top double top or higher high but the SM has made a lower high it shows weakness in price and the price may well be in a position to drop.

What do we have right now... we have a techbnical double top..lets now look at the SM.

See the chart below

Things left to be added to this blog.

1. Colour candle
2. How I use the macd
3. How I use the fast stochastisc
4. My exit and go flat
5. Reverse long to short.. short to long
6. When to ignore a valid set up ..candle size ,distance from ma
7. What stop to use

And most important ...

My bank account number for donations... heheheheheheheh

Part 18 - What colour candle

This is a very simple section we want to go short on a red candle and long on a green candle.I have a timer on my chart timed in ticks ( you can see this on my example chart below) .My chart is an 89 tick chart

I therefore know when my timer reads 50% I have approx 44 ticks left to fill on the current candle.When my timer reads 90%, if I have a valid signal I enter my trade.
I personaly do not wait for the bar to finish.

See the chart below it shows a very good example of why we should short on a red candle and visa versa for longs .
I should stress that this type of set up does not often occur but we have to be ready for it.

Part 19 - The MACD

This is another indicator used with the SM to determine divergence. The macd is just the difference between 2 moving averages.I use the moving average of the MACD, which gives me a smoother line.

To take a trade the signal must def have macd divergence, its the one indicator that must comply on all signals.

Here is an example of the MACD and how it helps filter out signals that could well move against us.

Part 20 - The fast stochastic

I use this if I have diversity on my MACD but not on my SM. You can often get double bottom and tops on price, which will show up in the MACD but not on the SM due to its smoothing effect.

In this particular event we go to the fast stochastic to help us with the exact entry time. This is particularly helpful when taking a signal that is directly off of the low of the day (LOD) or the high of the day (HOD).

Below is the 4 stage set up of how I use it.

Part 21 - System exit

This can be a big subject Im going to keep it as short and as sweet as I can.

We have to be careful not to clip the signal to early.There is difference between coming out of a trade because of danger signs and coming out of a trade just because it goes against us by a few ticks.

The one most important part of a stop is to let the position breath,the natural course of events if we to go long on a small pull back in an uptrend will be for the price to pull back after a rally to find more buyers.Dont panic if that happens its the way a good trend is meant to build .

The picture below shows a price move breathing.I look for the circled areas as at that point we have made a lower high















To be cond

Part 22 - Invalid signals

There are 2 occasions when I will not take perfectly good signals that qualifies under the rules in the previous sections.

There is prob 3 exception to this and they are as follows

1 -The invalid signal occurs just below high of the day and is a short

2 - The invalid signal occurs just above the low of the day and is a long

3 - If I have had a very good day and wish to take the risk knowing a maximum loss of $100 wont effect me being profitable for the day.

At the time of writing this section (1st march) 28th Feb yielded $1800 and the 27th Feb yielded $2000 trading the one contract. Both of these days mid way through the session I took the riskier signals.

Here are the 2 exceptions

1 - The trigger candle was 10 ticks ot larger

Reason for not taking – As our maximum stop is 10 ticks the price could easily pull back the full breadth of this candle over the next 2-3 candles and give us a losing trade

2 - The close of the trigger candle was more than 10 ticks for the moving average which acts as our stop

Reason for not taking – The moving average is there for 2 reasons

To support our trade
To close out our trade with a small loss if it goes against us

If we take a signal that’s 10 ticks or more away from the moving average we open our selves up to the 2 conditions above.

Example. We take a long signal the close or our fill is 12 ticks above the moving average. Our stop is 10 ticks and the price pulls back to the ma and we get a 10 a tick loss. The system then gives us another signal that qualifies under the mains rules and goes up 10 ticks. To wait and take the correct signal gives us 10 ticks of profit to take both gives us zero

Staff - Due to the demands of trading Ive had to take on a member of staff to deal with back room issues, like making tea.