| The Odds Czar: Index Futures Biases for January 30 |
| By Art Collins |
Published
01/29/2007
|
Currency , Futures
|
Unrated
|
|
|
|
The Odds Czar: Index Futures Biases for January 30
Sometimes you can view one trade environment as a metaphor for another. January has been a tough month for me. Although I’m up a modest amount of money by virtue of my longer-term ideas, each profit has been a hard-won struggle while many of the losses have been ridiculously close-to the-wire and extremely irksome. Part of the reason can be found in the lack of follow-through. Up and down days seem to be alternating to an unusual degree which translates into the CzarChart readings. There have been a lot of times where strong signals have flipped almost instantaneously from strong to weak and back again, or as we see in Tuesday’s readings, are just flat-out neutral.
I’ve been using different day systems for the last few weeks. One sets profit targets one-and-a-half times as far as the stop-loss. For the last five months of 2006, that system had a 500 win/loss ratio -- an obvious winning methodology under the circumstances. This year, (after doubling my size, naturally), I have booked one full winner and about 11 losses. The number of times one tick has sabotaged near wins has been beyond belief. Twice last week, I was stopped out to the tick. In one case, the market moved to where I would have booked a full-blown profit, in the other, it would have been a slightly better than break-even. Today, I came one tick shy of ringing the cash resister in the Russell. The market broke to my stop-loss with a mere two ticks to spare.
If you trade long enough, you’ll see every anomaly. Still, with an average of 100 ticks spanning the distance from my profit to the loss targets, I’d say the odds of just missing/just hitting the one tick three times out of six trading days is something approaching a million to one.
I guess the moral to all this venting is, January has been aggravating on an near-unprecedented level. Is anybody else perceiving an unusually unforgiving environment?
Either-Or Biases
The first set of biases includes six biases that individually signal either long or short on a daily basis, except for the rare tie. Each bias has a +1 value for long bias, and a -1 for short. The bottom line is the sum total, which can range from -6 to 6. Positive totals are bullish; negative are bearish. For bullish signals (opposite is bearish):
- The 2-day average is below the 5-day average.
- The close is above the 40-day average.
- The highest close of the last 50 days occurs before the lowest close of the last 50 days.
- The day's trading range is smaller than the 10-day average range and the day's close is higher than the 10-day average close OR the day's range is larger than the 10-day average range and the close is lower than the 10-day average close.
- The close is above the midpoint of the average 15-day range. (The 15-day high average plus the 15-day low average divided by 2.)
- Fade the majority direction of the last three open-to-closes.
Infrequent Biases
The five infrequent biases are listed below. For bullish signals (opposite is bearish):
- Four successively higher closes were followed by yesterday's down close. Today's action was irrelevant.
- Five successively lower closes were followed by today's up close.
- CUP trade. For the last three trading days, the middle day had both the lowest low and the lowest close. In addition, the low on the middle day must also be lower than the lows from the previous three trading days before the middle day. (CAP is the reverse and bearish.)
- The highest low minus the lowest low of the last three days is less than or equal to 20% of the highest high minus the lowest low of the last three days.
- For the previous two days, the market closed lower than it opened.
Calendar Biases
The calendar biases in the indexes are listed below. For a more in-depth explanation of these, click here.
Click here for the TradeStation summaries of all 14 futures biases.
DISCLAIMER: It should not be assumed that the methods, techniques, or indicators presented in this column will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented in this column are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The author, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
Art Collins is the author of Beating the Financial Futures Market: Combining Small Biases into Powerful Money Making Strategies. E-mail him at artcollins@ameritech.net.
|
Free Festival of Traders Videos
