Trading Dow Futures.. Is my system +EV?

[stephenNUTS]

[ QUOTE ]
The end of the day is when all the daytraders exit their positions. This phenomena causes there to be increased volume/volatility in the last 20ish minutes of the market day. For good traders, volatility = profit, so often this is a good thing. Some days though the day's ending is very range bound, so this is not always the case.

Your "system" makes two assumptions, one of which is completely valid, one of which isn't.

1) There is increased volatility in the last 30 minutes of the market day, and volatility is easier to profit from

2) A beginner will always know which direction to pick, how to handle their position, and that this will be easy money.

[/ QUOTE ]

You replied to me in the header.....but I am assuming you are talking about the OP's system... being a BEGINNER ,with your 2nd comment regarding "easy" profits at the close....as I NEVER said or implied any such potential results?

[img]/images/graemlins/confused.gif[/img]

[pr0crast]

[ QUOTE ]
[ QUOTE ]
The end of the day is when all the daytraders exit their positions. This phenomena causes there to be increased volume/volatility in the last 20ish minutes of the market day. For good traders, volatility = profit, so often this is a good thing. Some days though the day's ending is very range bound, so this is not always the case.

Your "system" makes two assumptions, one of which is completely valid, one of which isn't.

1) There is increased volatility in the last 30 minutes of the market day, and volatility is easier to profit from

2) A beginner will always know which direction to pick, how to handle their position, and that this will be easy money.

[/ QUOTE ]

You replied to me in the header.....but I am assuming you are talking about the OP's system... being a BEGINNER ,with your 2nd comment regarding "easy" profits at the close....as I NEVER said or implied any such potential results?

[img]/images/graemlins/confused.gif[/img]

[/ QUOTE ]
I clicked the quote button on OPs post. Don't know why it defaulted to your name - probably b/c you're the last poster. I am talking about OPs system, specifically [ QUOTE ]
it said how half hour before the close the market tends to pick a direction and go with it

[/ QUOTE ] which seems to imply some sort of intuition rather than objectivity. He didn't mention how he determines that direction - just that it's there, and somehow you are supposed to find it and "go" with it.

[stephenNUTS]

OK Thanks
Stephen [img]/images/graemlins/smile.gif[/img]

[ArturiusX]

Your system sounds like a simple momentum one. The problem with momentum systems is timing entry/exits, and dealing with whipsaws (I guess this could be said of any system, but particularly momentum ones).

You're relying on the pile on effect that happens when price starts moving in a direction. You have to get in early enough to see this, which means you have to have the foresight that no one else has about the momentum of a move. But in those cases, the move is weak, and could easily be pounced on by large traders. Its difficult to explain all the dynamics, and I have no doubt you could, in theory, design a profitable system using some sort of timing mechanism. But its extremely difficult to do so, because market conditions often dictate if these systems work, and with no tests for that, your system is a shot in the dark at hoping a momentum pattern holds up.

Today, for example, I'm seeing a bracketed market, and I just went short at the upper level on a volume surge for a 24 pt winner on the YM. Coincidently, your system would suggest the same thing. From my point of view, its luck that your system worked; mine was waiting for a bracketed extreme, which only coincidently came at 3:30pm.

[wickedgoodtrader]

Well at 3:30 today there was a long black candlestick pointing in the direction of another sell-off and sure enough it did. Got me another +$6k trade.

[ImBetterAtGolf]

These responses are a little depressing. I hope they don't lead you to believe that it is as simple as some have made it sound. It isn't just about your ability to handle the volatility; it's first and foremost about whether you have forecasting power. That is highly unlikely, but testable. Do yourself a favor, be thankful for your gains to date, then back off and test your trading hypothesis. If you do the test properly, you will learn a lot and also probably find that you have no signal.

Sorry

[stephenNUTS]

[ QUOTE ]
Well at 3:30 today there was a long black candlestick pointing in the direction of another sell-off and sure enough it did. Got me another +$6k trade.

[/ QUOTE ]

This kinda of post/thought is what sucks in DT'ers

[img]/images/graemlins/frown.gif[/img]

[ArturiusX]

Well, he made more money then I did today, time to switch to his system!

This sell off was weird and on very high volume considering most of the day was range bound. From experience, this won't happen very often, if ever.

[wickedgoodtrader]

Apparently according to what the tone of most responses say... isn't the "weird" sell-off exactly as to what should happen. It seems everyone's claiming there are no patterns and things are unpredictable. SO if you expect it to never happen... it will.

Many of you have said it would be easy to backtest. How? Like how could you get something to calculate the trend at a certain point of the day 3:30-3:40 then have it take the position and calculate gain/loss.

[ImBetterAtGolf]

you haven't fully defined your strategy, so we can't say exactly how to backtest. you may need some tick data.

please, do this for the education and only for the education. take your money and leave the table.