Discretionary scalpers or very active day traders may find that they trade well when they get into the market flow. However, recently I learned there are some negative sides to flow states. In particular, there is a risk that the trader ends up executing in auto-pilot mode without considering the account risk or why they […]
Continue readingGraybox Trading , System Trading
Most system developers are aware of the Max Favorable Excursion and Max Adverse Excursion measures. These measures track the max profit and loss a trade experiences over its lifetime. However, a very useful metric that I’m unaware of being even tracked in most trading platforms is Max Favorable Consecutive Ticks (MFT) before Max Adverse Consecutive […]
Continue readingEverybody wants to trade. Okay, that might not be true but a lot of people who watch the market want to trade. Some of us have even had a lot of success in the past when we worked really hard. But as time went on, some of us quit working really hard. And, we took […]
Continue readingIn 2009, the SPX was around the 1100 mark. Today, the SPX is stands at 2738. In 2009, one ES contract was worth approximately $55,000 notional value. Today, one ES contract is worth approximately $136,000. In 2009, a 2% move would work out to an approximate 22 point movement or $1,100 move. Today, the same […]
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A simple but effective technique for building your first graybox is to colorize the background based on whether you should be looking for short or long trades and/or based on identification of specific setups. A key benefit over simply using traditional indicators is that it eliminates the effort and tedium required to process multiple indicators. […]
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