Several members of our Dow Trader service have asked us to set up this blog to share thoughts on our favorite market of choice - the Dow Jones Index which we trade daily using the Dow Mini.
Members know through witnessing themselves the consistent success of our trading system, with a full set of recorded trading results - every single trade, both winners and losers - published since Jan 2006 on our home page.
In this blog, we want to share member thoughts, our updates, bulletins, bits and pieces of info we feel our members [and potential members] will benefit from.
As you know, core to our trading system is our unique Inter Market Strength [IMS] Indicator, a powerful minute by minute analysis of the Top 30 Stocks which make up the Dow - the inter-relationship between the internal 'trend' dynamics of these stocks, ultimately provide one, all powerful, unique measure/indicator, which we call the IMS. Look at the results - the power/profitability of this method is self-evident. Through this blog, we hope to share a multitude of experiences.
Members are invited to participate in this blog. It allows you to view the very latest in our own trading, developments, ideas, etc., and provides a means to post your own comments/suggestions...
750 comments:
1 – 200 of 750 Newer› Newest»Hello
Congrats on a faster service - much appreciated.
I hope a similar upgrade will be made soon to the FTSE100 index.
Best wishes
Rob
The FTSE 100 is not a 'primary' index as we define it, as it oft takes its cue from the Dow Jones. The Dow is arguably the prevalent index which all others watch and 'react' to, hence we prefer trading the Dow instead of any other index. Hope I am making sense?
Hi, I have tried many trading systems and i know that yours is the only one that produces result consistantly. well done and keep up the good work.
I quite agree this is a very pleasurable system to use one thing I would like to see though is a synchronised clock on the Clickvolume page to show times between the Dow and the Footsie to make it easier to be ready for the volatility the Dow creates when it opens for business for those of us that also trade the FTSE 100
How about a day trading system on the dow, do you plan making that?
The dow moves at least 25 points in each direction on any given day and somtimes more then 100 points. so there's a lot to capture in one day.
Maybe your system would work in day trading too.
You guy's have really done a great job with the Dow Trader. I have been a member for almost a year, so I have seen all of the changes and your latest change by far is the best. I use you Dow Trader in a little different way. I will take your long and short signals and buy call and put options of the DIA Diamond Trust. I buy the front month with a Delta of 70 or above. I am hitting about 90%. Thanks for all of your efforts you are helping me to make a lot of money.
Dave, thanks for your contribution - this is great! While I personally only trade the Dow Mini future, I suspect many of our members may prefer trading ETF's and DIA Options to profit from the Dow. It would be wonderful if you continued to contribute any tips/comments on trading Dow Options as you develop your experience using this instrument.
Msg for Jhon - Day Trading is a forte we tend to shy away from, largely due to the stresses involved in watching the market all day - it ain't much fun after a while - but everyone to their own. We are happy [and consistently profitable] with swing trading [holding positions for a few days]... this allows us to capture sizeable swings as opposed to scratching a few points at a time. This is simply an opinion.
That's it for today - I am now going to go away from my screen and get some sleep - back tomorrow to see how the day progresses. We are currently short the market since earlier today - my expectations are we may see a slight recovery tomorrow but I will be keeping 'short' until the screen signals 'Go Long'... Take care - good trading!
Hi, I think this is a great system. But, do you have time constraint on trading mini dow futures? Say you went long late August with September Dow, would the indicator give signal before the settlement day? The future is already expired now, have you closed the trade of Auguest 29? Also, why do you use closing price for performance, since the signals are generated overnight, I think the openning price would better mimic the actual trading, right?
I would have to say the best constant system out there.. non-emotional... I use it to trade the DJIA E-mini futures when I am not playing with the R2K futures...
Would like to see it updated at close for the next day's trading...
Check out my E-Mini Index Futures Trading Blog
I am new to the system and have a couple of question. Is there somewhere on your website that shows the "go long", "go short" during the trading day or do we have to wait until after the market close? I am trading the DIA but will consider the options on DIA as Dave suggested he is having good success. Keep up the good work!
Msg for Shawn [great blog btw] & Raymond - We are updating every 10 mins throughout the day. Ideal entry is to check around 10 mins pre-close and enter the market depending on whether the signal states "Go Long" or "Go Short". If it says "Stay" Long/Short, don't do anything. Hope this helps!
Hi,
I've been a member for a few months and have had great results.
Couple Questions:
1) If the Dow is the "leading" index, would it not make sense to trade an index that follows the dow? Wouldn't you be getting in and out of trades with better position in a lagging index?
2)The "Learn it" button in the members area is still under construction. Do you have an idea when this will be functional?
Thanks for the feedback.
Hi John,
please ignore my last email, the superb blog page answered all my questions and subsequent questions, this is a super system in terms of transparecny, user friendliness and good old fashioned simplicity itself!. I am sure you heard the terminology: K.I.S.S............ KEEP IT SIMPLE STUPID
I am profiting with small amounts of money at present ( lets's learn to walk before I run), and early next year to do larger scale trades, but in the mean time I intend to accumulate a consistent stream of profits/income .
Keep up the great work!!
All the compliments I wish to give to you and your staff have been covered on the blog already !!
all the best
Anthony
Hi
I am new but the system looks great! and simple couple of questions.
I start trading during GMT hours before DJI opens. For example today the DJI futures is +28/31 etc. Does this have a strong influance when the market opens in NY?
In cases like this should one hedge the DJI or just wait till NY opens ?
Best wishes
Kevork
The 10-min update is a great improvement to your excellent trading system. I also trade the TSE 60 ETF (XIU) and would certainly appreciate your maintaining coverage of this index on a daily basis.
Your program is educational, simple and fun! The Inter Market indicator is an awsome tool! What a blessing. ONe question: Does the Inter Market indicator reflect the movements or moods of the actual futures DJIA futures? I have noticed that over the past few days, there has been a big point spread between the Dow points and the E-Mini. Keep up the fine work and thanks for adding the 10 minute update feature!
Anyone trading other index futures? Interactive Broker has a nice platform for trading the Nikkei, Dax, FTSE and a number of other global equity index's. I particularly like the bracket orders which allow you to set up an entry order and if it is executed, it also executes a hard stop or trailing stop automatically, which is nice if you are sound asleep!
Oops, that was a reversal today!! But what a system thankyou! two questions, I'm in the UK, what time zone is the Dow at, and where is the Dow 30 screen gone? You probably gather I've not traded before, but now have the wherewithal to begin doing so without losing my shirt as it were. This seems the safest system to begin with at least.
Finally, do I understand that you never close your positions, only buy long or buy short?
Great improvements to the system. Thanks for all your hard work. Let's hope Uncle Ben turns this baby down today.
I just like to say that what a great idea a blogg page is, and how it will help the new kids on the block like me. Is there any one out there who uses this simple system to spreadbet the dow, and what results are they having ?
If you are spreadbetting are you using Dec Dow Contract or are you using the Dow rolling contract as the trades are only lasting a few days.
Look forward to comments.
BB
Msg for John-David [UK] - The Dow Screen is there - simply click on Dow Trader on top left menu. Dow is Eastern Time [New York], around 5 hours behind UK GMT.
Msg for Jahn - ideal entry into the market is around 10 mins before the close - as I said earlier in this blog, "the trick is to wait until around 10 mins before the close. If the signal is a "Go Long" or "Go Short" signal at that time, then enter the market, if it is a "Stay" [long/short] signal, then hold."
Orders are always 'market' orders as the Dow is extremely liquid and you would have no trouble getting a fill. There are many good brokers out there - check out the comprehensive list in the manual. Thx for the positive comments!
Hot off the press - Dow Trader is a father again!!! Mother and baby are fine - means I will not be able to spend as much time on this blog as I would like to but please keep those comments coming - it would be great if 'experienced' members might like to contribute and answer/respond to any beginner questions/comments on this blog - we want to try and create a community where we can interact and help each other!
Well for the second time what can I say than well-done, Impressive result...! Keep up the good work!
This is a great site and your new Dow Trader is working very well for me trading Calls and Put Options with the DIA. I get a little nervous watching the 10 min update, but your post of looking at the Dow Trader about 10min prior to close is really all I need to do. Can you update your main page "history" of your trades more often? Thanks, Jim in Seattle
Hello,
Firstl i must say this is a great system that with responsible trading makes alot of money.
I would like to see how the indicators (long/short) are arrived at would also like to configuration parameters for the signals so users can prgramme it
Hi
This is for BB. In short spread betting Dec or Roll is almost the same. You can buy sell either one as many times but in my case the platform I use the main difference is the spread. Dec has 9 points spread rolling has 5 points spread. That does not bother me much except the overnight interest you pay or receive. I normally sell rolling and buy three month(Dec).
Spread betting is fine specially now that we can get trade signals from Dow Trader before the close.
Rgds
Kevork
hi guys,
I trade the dow through spreabetting and to reply to an earlier question here is what I found. It is best to use the dow roling daily if we are short or selling because you will be paid an amount of money for holding your position overnight. Also the spread is tighter on the rolling daily, 4 points as opposed to 8 on the december contract.When going long, I choose the dow december as I will not be charged for holding my position overnight although there is a wider spread to pay. I think spreabetting is a great way of trading the dow and more importantly it is TAX FREE which as a Frenchman gives me great pleasure !!!
Didier UK
Quick note to all members - the "Learn It" button on the Dow Trader screen is now updated and fully operational - provides important information on how to use the screen... take particular note of the "10 mins before the close" entry system.
The FAQ section is now also updated and live - it answers many of the popular questions for members. This will be updated regularly to form an archive of solutions - accessible simply by clicking on the FAQ/Support link on the left hand side of the main Dow Trader screen. The Dow is expected to open up today - we are LONG the market so should be a good day! Discipline and persistence pays in the long run.
When I buy DIA option I will look at calls or puts depending on the Dow Trader signals. Before I execute I use the 30min opening range to confirm the signal from the Dow Trader. This has worked quite well for me. Using this morning as an example the opening range would have kept me from executing a call option. Opening Range works for stocks or options.
Dave
Can someone explain speadbetting on the Dow?
Spreadbetting is covered in the online manual: go to http://insight.net/dow-online-trading-manual-13.htm
Thanks to Kevork, for your expanation of the contract to trade with spread bets.
Question for Dave. Can you explain opening range? Does this mean that you are waiting for 3 (every 10 minutes)updates after the market opens to get confirmation to do OR not do the trade? Also, what expiration month would you buy now, October?
Thank you,
RC
We are looking for some feedback from current members - a plan to roll out an 'email' version of our online Dow Trader screen, 3 times a day: 10:30, 1:00pm and 15:30pm. We feel this will better serve members and protect from any server downtime risks, which thankfully do not but can [very rarely] occur. In order to make this possible, members will need to ensure they have reliable email addresses which they should double-check. More information on this service will be posted in due course.
Its a good idea if there is a risk of server going down. The times suggested is also good because as you mentioned erlier 10 min should be just as an information rather than trading.
Rgds
kevork
I think the e-mail backup is a great idea. I would suggest a 3.45 to 3.50p m e-mail time though.
What I will say, well done Mr. Insight. Keep it up.
Emails would be great....3 might be a bit much daily... but 2 (10:30 & 15:30) is an excellent idea...
Keep up the good work! We really appreciate your hard work on this.. Blogging was an excellent addition to your site.
Readers, Check out my E-Mini Index Futures Trading Blog if you are into Russell 2k action.
Hi. I have just joined as a new member. I know the system is designed for end-of-day trading, but in the manual it says that some members use it for day trading. Has anyone got any such experience? How did it go?
Many thanks,
I am new to insight but not new to trading. I have been trading for 4 years and have spent thousands of dollars on many other complex trading software. I love insight because it's easy to use and I can still work for a living. Also, I just wanted to share my plan with other insight users. Since the S&P 500 follows the dow I plan on using the dow trader signals to trade S&P options.
-Kevin
Chicago,IL
Hi, this blog is great! But it's kind of hard to follow, with the current timestamp which shows the post time only, not the post date. Would the moderator please enable or configure to show both date and time of the posts? Thanks!
I like the idea of e-mail updates for members. Barring that, it would be very nice if we could access the current site on our hand held devices (like my TREO 650). The strategy is so simple that it should be possible to make trades remotely. The e-mails or some adjustment to the way the site loads would do the trick.
The Dow Trader is a very neat program, is it possible for you to set up the site so that it can send an e-mail to members, every time the trend indicator changes direction. This would really be helpful for someone like me who is always on the go, but can access e-mail via palm/blackberry
Great idea to have a email verification service, would help the novices like me. A bit of hand holding. Keep up the good work.
BB
Phil in UK asks;
Does anyone know of a UK brokers office through which you can trade the DOW call/put options
Thanks in advance
hello:
I am very impressed with the recent changes to the Dow Trader site
I would love to have the required knowledge to allow myself to trade options on the DIA with confidence.
I would love to have a further explanation from Dave's post at 2:35pm. "I buy the front month with a Delta of 70 or above". - What does this mean exactly and where do I acquire this info on a going forward basis?
Thank-you in adavance, to all who reply.
Ken.
Hi,
Another suggestion....I ran across the new proshares ETF's that go both long and short the DOW. You can also buy these ETF's as "2X" funds which double the gain (or loss) relative to the index. They are still a bit thinly traded, but I just traded a lot and had no problem getting filled. This might be a solution for people with IRA's who cannot short stocks.
Denis
More feedback requested from : A suggestion was made by one of our long-time members to see trading results whereby we ONLY TRADED WHEN THE IMS WAS ABOVE 70 [short signal] or BELOW 30 [long signal]. If all the other signals were ignored [eg when IMS is between these bands such as 60, or 42 etc.] then we are out of the market. Well, we have researched this and have found that this would have kept us out of all losing trades in 'choppy' markets. Results would be: 20 trades since Jan 2006, 15 winners, 5 losers. Total winning points: 2798, losing: 598, net profit: 2200 points. The great thing with this is that we are not entering new positions when the IMS is somewhere in the 'middle', but onlytrade above 70 or below 30. Once we enter a trade, we exit if the IMS turns around at any point [even midway, but do not initiate a new reverse position unless IMS is <30 [long] or >70 [short]. We would welcome members input on this. If this is favorable then we will publish the new signals based on this tweak/improvement.
An additional development is the pursuit of the 'ideal' stop loss point. From our research into ALL our trades, we have found that a 1% FIXED stop-loss point provides protection while [most importantly] allowing ample room for our trades to move. Visit the web page www.insight.net/imsXtra.htm which posts the results of the IMS system based on applying the 1% stop-loss rule AND the IMS filter whereby you only trade LONG if IMS is below 30, and SHORT if IMS is above 70. Check it out - give us your comments!
I tend to agree with forex1665. The beauty of the dow trader is it is simple to follow, and you want to keep it simple. One e mail at the end of the trading session confirming the signal for the following day is all that is needed IMO. To many emails /signals would only complicate things for new members/novices like myself.
I like the idea of the tweak, could members have access to these results before they are published on the website ?
The results of the improvements are published at www.insight.net/imsXtra.htm
Dow Trader, your suggestion of trading long only when the IMS is below 30 and short only when it is above 70 sounds like a good way to limit losses. Are the results you showed based on historical data similar to the current system track record on profits? If so, I would say that such a loss limiting tweak would be a good change.
Hi guys,
This is to reply to Phil in the UK. I trade from the UK also and I couldnot find a UK based broker for trading options on the Dow. However I was able to open an account with a firm called optionsXpress based in the USA.They are excellent and also have a very neat virtual trading platform which you can access without actually opening an account with them. Hope this helps and don't forget that as a british citizen you can spreadbet !
DidierUK
Dowtrader--I quite like the idea of using the IMS 30 long and 70 short. The indicators would seem to generate stronger signals for the trade, creating more profitable results with fewer narrow range trades.
As Edwin Lefevre said, "it is the Wall Street fool who thinks he must trade all the time"
I love the new look of the site as well as all of the new ideas. I think the <30, >70 IMS rule is a great idea. It would help if the IMS chart were a bit more detailed so that we could see exactly when the indicator is at 30%. Also, why were trailing stops ruled out as a rule in favor of a fixed stop?
Wow! What a great system, so simple. Are your trading results using the 70-30 and 1% loss rule based on intra-day trades or at the close?
Keep up your good work.
RC
I have backtested the DOW TRADER history from Jan 3, 2006 to Aug 29, 2006. The strategy I used in the backtest is buying calls and puts on DJX. I bought at the money calls for going long and puts for going short with at least 30 days to expiration. The max risk was $4K per trade, in other words I would buy no more than $4K worth of options on a single trade. Contract size was from 15 to 40 contract based on the price of the option. To keep thing consistant, I would buy at the ask and sell on the bid (worst case). Every time the indicator would change I would sell the existing trade call/put (close the trade) and buy (open a new trade) put/call. The results were amazing, with a profit of over $40K in this 8 month period.
Has anyone considered using this strategy or am I dreaming or doing something wrong. It sounds like it is to good to be true. By the way I am an experienced options trader, and new to the DOW TRADER. Thank you for any comments and feedback
Hi everyone
I have an Excel spreadsheet which shows a staking plan for spreadbetting. I have applied it to the "revised" results issued by Dow Trader, showing net gains since january of 2788 points. It starts with a stake of 2 pounds per point on the first trade and builds up with success, reinvesting profits OR withdrawing them as required. After 21 trades to date and no withdrawals, the Bank is at 67,000 pounds. If anyone wants a copy of the spreadsheet (free, of course) drop me a line on timdwilliams@wanadoo.fr
Happy trading,
Tim
I agree with the concept of the 30/70 screen, however, your data suggest maybe a 35/65 screen to capture all the signals you show on the test result screen. For example, May 10th Signal Date shows an IMS of 68, to go short. If screened out att 70 a large gain from the short would have been missed. Good concept to screen out trendless noise unless IMS is at the extremes.
Hi guys,
Following dow trader suggestion not to trade when the IMS is between 30 and 70% and using a 1% stop-loss,I have looked carefully and mathematically at the new result table and have made the following observations :
Under the "old system" we would have achieved a profit of 103.43 points per trade made which represents a 71.42% rate of success.
Under the new system, a profit of 122 points per trade made (winning and loosing ones) would have been achieved turning into a 76.19% success rate. I think the figures speak for themselves and bearing in mind that fewer trades would have been made, broker's fees would have also decreased resulting in more profit for us. Well done to the dow trader for an excellent fine tuning tothe system.
Didier UK
Thank you for all your feedback - this is very important to us. There is yet to be a scientist who can measure the synergy created when minds that think alike, come together. It keeps us on the right track. Looks like we will be working through the night - so we can go live with the new updates BEFORE tomorrows open being Sept 28th 2006. The updated system will include "Go Long", "Go Short", "Stay Long", "Stay Short", "Exit & No Trade" and "No Trade" signals. Check it out tomorrow - and before we go - a BIG thanks to our dedicated programmers without whom none of this would be possible!
great update with the stop loss and entry into trade rams technique with buying options sounds great maybe rams could ellaborate ie.. why you chose 4k and if this is the dia options and at least 30 days to expiration would mean an option probably two months out. ie for sept would be nov options hope im understanding this right any input would be appreciated
I really like the idea of a 1% stop loss if the numbers work. In the event we have major league negative event such as 9/11 or the Crash of 87, we will be saved! I think that is a huge benefit from a risk standpoint. It certainly reduces the anxiety.
Sam you should take a look at the CBOT web site www.cbot.com to understand more about the mini Dow futures.
Good Luck,
Kevin
Hi...,
Excellent system you have put together here. Results are very impressive and the tweak on the entry is good. Like many people on here I trade the UK market and i appreciate many people have mentioned using the system for ftse. Maybe you should do a back test on the ftse and dax and let the subscribers decide whether to trade it or not. Further more the trade would give a good feel as to the general direction of the markets/stocks. regards D
Sunday Oct 11th: Ok - I think we will get to work this coming few days and test the signals on the FTSE, and S&P, Russell 2000, and Nasdaq 100 Index. If anybody out there wants to help out it is a very simple process... Take each and every Dow signal we have provided to Go Long/Go Short/Exit, and calc number of points gained/lost, number of winning trades vs losing trades etc. As soon as we have objective, checked/verified results, we will publish these on separate web-pages... Happy Trading!
Greetings to all:
I ran a backtest on the Nasdaq 100 (symbol NDX)based upon the trigger points provided on the Dow Trader. The Opening price was used to buy and sell the Nasdaq 100 index (NDX).
Total completed trades: 21
Total winning trades: 15
Total losing trades: 6
Total winning points: +672.45
Total losing points: -55.52
Net Profit: +616.93
Overall percentage of success: 71%
Monday Oct 12th: The Dow signal have been tested on the DAX [thanks Tim!]... Results below...
1675 DAX points, which when pro-rated up to the equivalent of Dow points = 3256.
13 winners, 8 losers.
2089 winning points, 414 losing points.
Can anyone also test on the FTSE, S&P, Russell 2K?
Thank you also to the person who did the test on the Nasdaq/NDX last night [see blog above].
Quick note: You should follow the Dow signals to test any other index. Reason: The Dow index is primary, from which most other indexes take, to some degree, their 'cue'. Hence we stick to the Dow signals, and apply them to any other 'secondary' index such as the Dax, FTSE, CAC, etc.
Happy Trading, and please be patient - sometimes a 'no trade' [our current signal/position] is better than being in the thick of a choppy market!
Just for clarity...are all the backtests being run with the 1% stop against the original entry? I'm amazed that the NDX seems to be doing a quite a bit better than the DOW from my calculations (net points against the current index price).
Greetings to all:
This is Kenny Caleb with some more back test information however this time on the S&P 500 vs. the Nasdaq 100.
Once again this is utilizing the signal we receive from the Dow. All purchases and sells are done at the opening of the S&P 500 Index (symbol: spx)
Total completed trades: 21
Total Winning Trades: 16
Total Losing Trades: 5
Total winning points: +415.13
Total losing points: -21.45
Net Profits: +393.68
Overall percentage of success: 76%
Tuesday Oct 3rd: Firstly apologies - last datestamp on my post should have been Oct 2nd, not Oct 12th. Thank you Kenny for the S&P backtest - this just gets better!...
We may now consider adding pages for S&P, Nasdaq 100 indexes on to our site - all based on the Dow Long/Short/Exit signals - this is the primary signal we follow and - based on our original hunch [now backed by research/findings] - can absolutely, be used to trade all the major indexes.
Markets remain choppy - it seems like the market is creeping into 'spooky' October with a lot of caution. In any case, we are presently in a 'No Trade' signal [thank goodness], and await the next Long/Short signal - maintain patience - its all part of discplined trading! Keep well.
Hi, Tim here.
I tested the DAX against Dow signals - see results in a blog a few above. However, the stated results were raw results without stops. I have since added a stop calculator whereby you can choose the level of stop and the results for each trade will then be calculated automatically.
The DAX is MUCH more volatile than the Dow, and a 1% stop reduces the DAX overall performance to under 1000 points (still not bad).
In order to get the best result from the DAX, you need to use a stop of around 3%!! However, decent results (DAX 1455 points) would have been achieved with a stop at 1.75%.
Once again, if anyone wants my DAX spreadsheet, just let me know (timdwilliams@wanadoo.fr). Please put DAX in the subject, thanks.
Happy trading,
Tim
Comparing results by backtesting systems can be fun, particularly if we compare the original Dow Trader system with the most recent version.
Let’s assume we are a moderate trader, trading three contracts of the mini Dow (YM) at $5.00 each, i.e. the stake would be $15.00 per point of the miniDow future. The profit / loss per trade is simply $15.00 multiplied by the difference in closing prices for the days we enter and close the trade (ignoring slippage and commission).
Thus using the original criteria, i.e. taking every signal regardless of the value of the IMS, we would make 30 trades to date with the following results:
YM Original
Net Longs $38,600.00
Net Shorts $26,325.00
Net Profit $64,925.00
Winners 22
Losers 8
av win $3,831.82
av loss -$2,421.88
Risk / Reward 1.58
% Wins 73.33
Biggest Win (Short 10/5 to 23/5) $15.225.00
Biggest Loss (Short 24/4 to 5/5) $ 5175.00
If we compare this with the revised system, i.e. we only trade Long if the turning point of the IMS is below 30 or only trade Short above 70, we would make 21 trades:
YM 02/10/2006
Net Longs $32,025.00
Net Shorts $31,375.00
Net Profit $63,400.00
Winners 17
Losers 4
av win $4,425.00
av loss -$2,956.25
Risk / Reward 1.50
% Wins 80.95
Biggest Win (Short 10/5 to 23/5) $15.225.00
Biggest Loss (Short 24/4 to 5/5) $ 5175.00
The biggest wins and losses happen to be identical short trades in both systems. The new system would save on broker fees and has the better percentage of wins, but interestingly a poorer risk/reward.
I hope that these results confirm what other traders have found – if not I am sure the blog will tell us so.
Good Trading.
Rob
Comparing results by backtesting systems can be fun, particularly if we compare the original Dow Trader system with the most recent version.
Let’s assume we are a moderate trader, trading three contracts of the mini Dow (YM) at $5.00 each, i.e. the stake would be $15.00 per point of the miniDow future. The profit / loss per trade is simply $15.00 multiplied by the difference in closing prices for the days we enter and close the trade (ignoring slippage and commission).
Thus using the original criteria, i.e. taking every signal regardless of the value of the IMS, we would make 30 trades to date with the following results:
YM Original
Net Longs $38,600.00
Net Shorts $26,325.00
Net Profit $64,925.00
Winners 22
Losers 8
av win $3,831.82
av loss -$2,421.88
Risk / Reward 1.58
% Wins 73.33
Biggest Win (Short 10/5 to 23/5) $15.225.00
Biggest Loss (Short 24/4 to 5/5) $ 5175.00
If we compare this with the revised system, i.e. we only trade Long if the turning point of the IMS is below 30 or only trade Short above 70, we would make 21 trades:
YM 02/10/2006
Net Longs $32,025.00
Net Shorts $31,375.00
Net Profit $63,400.00
Winners 17
Losers 4
av win $4,425.00
av loss -$2,956.25
Risk / Reward 1.50
% Wins 80.95
Biggest Win (Short 10/5 to 23/5) $15.225.00
Biggest Loss (Short 24/4 to 5/5) $ 5175.00
The biggest wins and losses happen to be identical short trades in both systems. The new system would save on broker fees and has the better percentage of wins, but interestingly a poorer risk/reward.
I hope that these results confirm what other traders have found – if not I am sure the blog will tell us so.
Good Trading.
Rob
What about backtesting the DIA options? Has anyone tried that?
Re the mini Dow trades
Did you spot the error? My spreadsheet was set up for trading 5 mini Dow contracts and I quoted these results as if they were for 3 contracts. Apologies all round. Corrected tables below updated to 02/10/06.
Original System taking every signal and trading 3 contracts:
Mini Dow (YM) Original
Net Longs $23,160.00
Net Shorts $15,795.00
Net Profit $38,995.00
Winners 22
Losers 8
av win $2,299.09
av loss -$1,453.13
Risk / Reward 1.58
% Wins 73.33
Biggest Win (Short 10/5 to 23/5) $9,135.00
Biggest Loss (Short 24/4 to 5/5) -$ 3,105.00
Latest System, only taking signals above or below 30/70 and trading 3 contracts:
Mini Dow (YM) Latest
Net Longs $19,215.00
Net Shorts $18,825.00
Net Profit $38,040.00
Winners 17
Losers 4
av win $2,655.00
av loss -$1,773.75
Risk / Reward 1.50
% Wins 80.95
Biggest Win (Short 10/5 to 23/5) $9,135.00
Biggest Loss (Short 24/4 to 5/5) -$ 3,105.00
Rob
Wednesday October 4th, 2 hrs before New York Opening: Important - I don't know if many of you have noticed, but despite the relatively low number of stocks trending up [IMS reading registered only '42' yesterday evening], the Dow surged to new highs. Is this a good sign? I am not sure... but we will wait and see. It appears only a few stocks were fuelling the rally yesterday [Tuesday] while the underlying mood was quite negative as shown by the IMS reading - could this be a precursor to an impending correction/pullback in the market? Optimism appears high but is it? Certainly, judging by the IMS number there is no real underlying substance to the rally. Let's wait and see - today's developments should be interesting. Keep well!
Wed 4th October.
I have been a member if Insight for some time and I have to say that the Dowtrader produces some excellent results and is the best system so far. However I did not play exactly by the rules. I was not happy to trade without limiting my exposure and in analysing the figures I decided that a stop loss set at 100 points away fom market would provide an acceptable level of risk whilst allowing for movement. I therefore knew that the maximum loss of any one trade was 100 points and this would equate to 20% of my account balance in money terms allowing for five losing trades in a row before losing the lot. 5 lsong trades in a row seems unlikely and has not happened in the past.
Recenlty I was also looking at how close the IMS changes in direction were and how close the figures were to the 50 mark and was not conviced that the underlying trends were significant enough to provide a good indicator so on 15th Sept I closed at 11588 and decided to wait until there was a bit more movement.
I am somewhat heartened that the advice given now is to set a stop loss of 1% and to not trade until the <30 >70 levels are achieved first as this greatly substantiates my thoughts and findings.
Well done everybody.
David UK
Does anyone have any experience trading the profunds that trades two times the market with this system? Thanks
Shahnam
Dow traders should take an active interest in constructive market commentary, dissecting the facts versus over-optimism in the current markets... one such interesting article caught my eye today - take a look: http://www.forbes.com/2006/10/05/dow-theory-confirmation-pf-guru_in_rm_1005soapbox_inl.html?partner=yahootix
[copy/paste URL to your browser]. Markets overstretched, clinging on to the pursuit of 'record' highs? Or it it losing steam? What do you think?
Here are four trading outcomes based on these assumptions: Opening capital, $6000; minimum to trade one contract, $3000; commissions/fees/taxes to open/close one contract, $14.
ORIGINAL PROGRAM:
21 wins, 10 losses, 67.7%.
Net profit, $97,915, 16.6% average return, last trade of 32 contracts.
ORIGINAL PROGRAM w/100 pt Stop:
21 wins, 10 losses, 67.7%.
Net profit, $144,956, 17.8% average return, last trade 47 contracts.
70/30 PROGRAM:
17 wins, 4 losses, 81.0%.
Net profit, $77,599, 22.9% average return, last trade 26 contracts.
70/30 PROGRAM w/100 pt Stop:
17 wins, 4 losses, 81.0%.
Net profit, $125,580, 24.7% average return, last trade 41 contracts.
9 Oct 2006
Thanks rbp44,
I was getting anxious since we haven’t had any trading for some time.
Since the IMS was so close to 70 on Oct 6th at 66, I was considering entering a trade if the IMS changed direction. But after reading your latest blog comment, the evidence is clear that I should stand aside until I get into the 70/30 regions.
Thanks again for your work and your data. This Blog is the best for teaching new guys like me!!!
Great post rbp44!
Based on your figures, it's remarkable how much better the whole system fares when the 100 pt stops are used.
Drew from Toronto
To Dow Trader
This is for your info if you think there is an interesting point to follow.
Trading your signals at 70/30 and 1% loss but in between opening and closing trades I included 0.75% hedge and following the signal trend until closing hedge position. The results showed net profit of 3007 points.
I have it on spreadsheet if you are interested I can email it to you. I don't think I can attach it here.
Rgds
kevork
Hello,
I am new to this site but I have been reading extensively about this system and its results. I just wanted to know if anyone is using this system to trade options on the DIA? If so, how are the results? or is the general idea to stick to the mini-Dow?
Would love a copy of your spreadsheet. Where do I send my request?
Thanx in Advance
apt444
KEVORK,
Yes, I would like a copy of your spreadsheet. Kindly email it to me at bodega0@cox.net.thanks.
Joe
Yes, Please kindly sent your spreadsheet to me, thanks in advance! jingrliu@msn.com
Jing
Message for KEVORK,
I would like to have a copy of the spreadsheet you are using. Please e-mail it to sgabay242@yaoo.com
Yes I too would like your spreadsheet. Could you tell more of the background of the hedge? I'm new at this.
Hugh > hughh@sbcglobal.net
I would appreciate copy of the spreadsheet. please use anil@ptd.net.
KEVORK,
Yes, I would like a copy of your spreadsheet. Kindly email it to me at: "infonewspromo@yahoo.com".
Thanks.
Drew
To apt444 and others who are interested for the spread sheet.
my email: talrafzak@aol.com
Rgds
Kevork
Hey KEVORK,
please send me a copy of your spreadsheet as well. tigerec@yahoo.com thanx.
The new 70/30 system certainly seems to work on past figures. I too was tempted to enter when the IMS was at 66 on the 6th Oct. But I decided to abide by your rules and will wait. It certainly teaches discipline.
Kind Regards
Karatem
It has been 17 days since a trade signal. That is the system. It is wise to follow the system and not make exceptions. There will even be longer days between trades in the future...and that's OK.
Also, I don,t find much(if any) difference between taking the signal at the close or the next opening...at least with the DIA(Diamonds).
Kevork:
I would also like to see your spreadsheet along with how you are trading the signals. You can send it to my email address at: kcaleb3@yahoo.com.
Hi kevork,
Could I see your spreadsheet as well? Thanks Petra
synovial@excite.com
Trading requires patience and picking your battle. As I look back when we got our last signal exiting a trade back on Sept. 19, 2006 the Dow was trading at 11,540.91. From there the Dow has traded within our 70/30 extreme signals marks upward 406.79 points leaving us with no signal. This is where it get challenging because you want to be in the market. It could continue this channelling up for awhile before getting another signal.
I would love to see your spreadsheet ... please kindly send spreadsheet to liou@comcast.net thanks in advance
I have had quite a few emails and I think I answered them all.
Just to clarify that I use the IMS signals exactly as the Dowtrader recommends 70/30 and 1% loss and now I am waiting for next signal to trade.
The only reason I tested the Hedging (ie. Reversal) at 0.75% loss because I thought the system being so good (it’s the best I have seen from many believe me) that if there is a major reversal something has gone a miss! So at 1% loss is too long to wait and less than 0.75% is perhaps too premature and thought that 0.75% is enough to reverse the trade. Following the signal trends exactly as we do until signal changes. I applied this through all the trades but it only created 3 reversals and a good result too.
As I said it is just a test and I am hoping that other experienced traders and the dowtrader will put their views.
Rgds
Kevork
Has anyone used the Dow Trader to trade CFDs.
KEVORK,
Yes, I would like a copy of your spreadsheet. Kindly email it to me at mbaditya@yahoo.com
thanks.
MS
Kevork
I would also like a copy of your spreadsheet. I am also new to this and would love to learn all I can.
Thanks!! send to: richnjolene@verizon.net
hi Kevork
Thanks for the sheet,Great work. but one question in my mind, I am
just wondering why you didn't do hedge on the 29th of August, the
closing point of that day is 11369.94, there seems a nice profit to make if you hedge on that date. Is there a particular reason orconcern you have for that trading day?
Raymond
This blog is superb. I would only suggest a small addition to it. It is not easy to know how recent the massages are because there is no date attached to the individuals messages. Is there a way in which each message can be date stamped?
This one is dated at Oct 16 9:56 AM ET.
Hey guys,
Can you please recommend a good broker who does 1pt spreads on the Dow (prefferably in the UK)
I've tried worldspreads.com and cityindex.com but they only do 4pt spreads :(
It is clear why there is no signal since the DOW is quite confused about this new upward move as the move is not being participated in by all of the 30 stocks (sometimes less than half) and so you might miss a significant move but I'd rather be in a move that all/most of the DOW stocks aree moving in the same direction as than a half hearted move
Hi KEVORK
Could you please email me the spread sheet pelase to ivo.ivanov@london.com
Also to answer Phil Re: Trading options from UK.
You can use www.iii.co.uk or www.finspreads.com but they dont do Doe e-mini contract
You can as for the spread on the Dec Dow 12100 options contract and use put or a call depending on the Dowtrader signal.
Hi KEVORK
Could you please email me the spread sheet pelase to ivo.ivanov@london.com
Also to answer Phil Re: Trading options from UK.
You can use www.iii.co.uk or www.finspreads.com but they dont do DOW E-MINI contract
You can ask for the spread on the Dec Dow 12100 options contract and trade that using put or a call depending on the Dowtrader signal.
http://www.iii.co.uk/spreadbetting/?type=learn#sbexamples
Hello
As a newcomer to Dowtrader I hope that someone could help me!! I have an account set up with "Worldspreads" but am a little puzzled as to which Contract to trade. Would I be best on the Daily Rolling Futures (1 point spread during Market Hours) or Daily Rolling Cash (4 points)? Thanks in advance for your help. My e-mail address is
peter.mccormack@homecall.co.uk
Kevork:
I was looking at your spreadsheet and believe I now understand how you are utilizing your hedge trades, however, I would like to verify for myself as well as all of our fellow traders. Your hedge position is not to trade on both sides of our signal but rather if a trade goes against our signal you enter a hedge and hold such position until the next signal?
I was looking at the spreadsheet and it appears that on 8/29/06 you could have entered into a hedge (meaning the signal was to short on 8/23/06 while the dow was trading at 11,297.90 however the trade went up vs going down and on 8/29/06 the dow was at 11,369.94) therefore if you would have entered a hedge (buy long) the next day you would have entered around 11,382.91 and could have exited on 9/19/06 at 11,540.91 for a total of 158 points.
Kenny
Thursday Oct 19th: A question I noticed gets asked quite often is, "Can I use the IMS to trade intra-day?". I have touched upon this in previous blogs. I will provide more detail here on how we calculate the IMS which will [hopefully] further traders' understanding of why the IMS we publish at 15:30 each day is 'final' and the strongest signal... I would not recommend intra day trading using the IMS. Let me explain. As soon as the market opens, we 'start' assimilating data that comes into each [of the 30] stocks, including amongst other data-capturing, the time/sales sheets, the bid/ask pressure on each of the 30 stocks, intra-day tick-trends, etc. At 10am the IMS is calculated based on this information but the signal at this specific time is 'weak'. If you cn imagine it to be likened to say, researching the effects of a new drug/medicine... Over time, the more information comes in, the more accurate the analysis. This is what is happening with the IMS. At every update throughout the day the IMS signal becomes 'stronger'. This is why the final analysis at 15:30 provides the 'strongest' signal as it takes into account the information assimilated over many hours, thus providing a much more accurate reading. There is slight confusion amogst traders due to the fact that we update the IMS throughout the day, every 10 minutes. However, only the printing of the IMS at 15:30 should be the final signal. Hope this makes sense. Happy Trading!
Significant results going long during neutral signal periods...
I was curious to see what would happen if we were long during periods when the IMS signal was in neutral territory.
If we go back to the beginning of 2006 and we were long the DOW each time the signal was a No Trade we would have added another 477 points on top of the 2562 points the system has already racked up this year. That does not include the 470 points that the market has added since we went neutral back on 9/19. So if we employed this strategy back in Jan 2006 and exited today we would have added a total of 947 additional points to our impressive 2562 gain for the year. Also note that the 1% stop loss was not triggered during any of these periods. Here's how it breaks down:
03 Jan - 12 Jan +115 points
09 Feb - 21 Feb +186 points
10 Apr - 13 Apr -4 points
05 May - 10 May +65 points
22 Jun - 26 Jun +26 points
29 Jun - 05 Jul -39 points
29 Aug - 12 Sep +128 points
19 Sep - Today +470 points?
Looking at the Dow-Stock-Trends IMS data as far back as it reports from Nov 2005 to Jan 2006 it looks like another 300-400 points would have also been gained if we were long during neutral signal periods back then.
We know as history shows that there is always an overall longer term positive bias to the markets and the DOW. Could it be that when the IMS indicator is in neutral territory we should ride the positive bias? Does the data support this going further back or am I reading too much into this?
KJEB
Tuesday October 24th: Just a quick note - in the next 2-3 days we will be going live with some valuable enhancements to our service - 100% free of course, to all our present and future members.
Currently, we publish long/short opportunities based on the 30-70 bands which we use in our trading. Now, as you know, the rules for the 30-70 parameters are: Buy when the IMS starts rising from below 30, and Short when the IMS starts dropping from above 70.
IN ADDITION to the 30-70 signals we currently publish, members will now be able to also view, the long/short opportunities based on different parameters...
These parameters will be:
0-100 [ie., No Bands!]
25-75
30-70 [current default]
35-65
40-60
To access any screen, you will simply click on it [eg., "Dow 30-70 System" or "Dow 35-65 System"] from the left hand side menu.
We hope to go live before the end of the week - and would love to have your feedback on this.
Happy Trading from all at DT!
Kevork,
Please if you would send me your spreadsheet on the 0.75% hedge trades you are looking at.
And thanks in advance, jim
jbmann@sbcglobal.net
Fantastic improvement Dow Trader, lets hear what others think. I look forward to seeing that....
Well-done!
I would very much appreciate that new system. It would enable people to trade in between 30/70 should they chose to...
Oct 25. Great Job! Thank you Dow Trader.
Wednesday October 25th: Well, I said it less than 24 hours ago, but thanks to some exceptionally talented programmers, we have worked through last night, and rolled out all five systems screens today - all 100% free to our members.
You can now check signals [opportunities] based on different IMS filters: 25-75 bands, 30-70 bands, 35-65 bands, 40-60 bands or no-bands at all.
To add additional value to this as suggested by a valued member, we will also be publishing performance results on all five systems. There is a link on the left hand side "Performance Record". The page is under construction, and should be ready over the coming weekend. It will show key information on all 5 systems: Number of Trades, Number of Winning Trades, Number of Losing Trades, NET Points Profit.
Thx for all the feedback - signing out - DT.
Regarding the new updates to the site: would each individual parameter have its own "Stay Long", "Stay Short", "Exit", "No trade", etc, daily signals?
Nice job folks!
KJEB,
I concur with some of your observations. I believe it is possible to trade even when signal is neutral under the 30-70 band. However, this requires combining information from the equally impressive trend index in the Dow Stocks Trends chart. The current positive bias is reflected by the yellow and grey bars forming consecutive peaks above the x-axis. Notice how the "Highs" of each new peak is at least 50pts above the previous peaks "High". By targeting to enter a trade at 50pts below the last peak's "High",and placing an exit limit order at 50pts above the last peak's "High" one can obtain at least a 100pts per trade.
Likewise, when the market has a negative bias or trending downwards, the yellow and grey bars of the trend index chart forms consecutive bottoms below the x-axis. Each bottom is typically at least 50pts below the previous bottom's "Low". By placing a trade at least 50pts above the last bottom's "Low" and placing an exit limit order at 50pts below the last bottoms "Low", one can also achieve at least a 100pts per trade.
Hopefully, the Dow Trader can look into the merits of above observations and perhaps even incorporate it into the current system.
Posted on 26th Oct 2006
Friday October 27th: Performance tables have been published for all 5 systems - view: www.insight.net/performance.htm
Have a great weekend! DT
Fantastic and good work DT with the new approach. I think this is definitely value for money for me.
JC
I enjoyed your input on the "50 points above or below " x-axis but am unsure of what you mean by the x-axis.Could you give me an example?
Thanks
Joe bodega0@cox.net
Message for KEVORK,
I also would like to have a copy of the spreadsheet you are using. Please e-mail it to zbworks@yaoo.com
Thanks!
Monday October 19th: Message for valued client KJEB...
We have been looking closely at your observations, regarding the possibility of trading "long" through neutral "No Trade" periods, and [per your calculations] adding some 900+ pts to the 2500+ pts already achieved.
Our initial thoughts on this were 'cautious'. While such a theory might be productive during bull runs, it would likely be much less effective during bear markets. However, the spark has not burnt out on this theory...
We plan to ADD an additional system based on these rules, and are currently working on a way to decipher [using existing tools & IMS] the 'trend' of the overall market. Once the trend is found ['bull' or 'bear'] then and only then, if we apply the following rules, the system would, we believe, be much more complete/rounded and profitable...
Rule 1:
IF we are in a BULL market, THEN all NO-TRADES become LONG TRADES
Rule 2:
IF we are in a BEAR market, THEN all NO-TRADES become SHORT TRADES
Effectively, we would ALWAYS be in the market. Once we have tested this, and it proves to be [even more] profitable then the current 30-70 System, we will publish this as an additional System [including FULL signals/performance history report], which members can use.
Ongoing developments will be posted on this blog. Best regards - DT
Hello all,
Im fairly new to the this trading system .I have been pretty much waiting for an indicator to jump in.Honestly I cant wait.So here is my question I did some math on a scenario of using 6 contracts starting with the first trade back in Jan 06' using the 70/30 program.What I found is that by keeping all profits riding in the form of additional Emini contracts that to date my initial investment of about 15,000 would be worth 625,000 today ....can this be right ? I mean if this is possible and you extend this scenario out over 3yrs we are talking about multiple millions...Can someone verify this for me so I know that my math is'nt screwed up?
joe,
The x-axis is the horizontal line that cuts through the zero point on the trend index chart. The yellow and grey bars will appear either above or below this line. You can see this more clearly by going to "Dow Stock Trends" and selecting Dow Jones. Then choose "Trend index" for Indicator #1 and "240" for Number of bars. Hope this helps.
posted on Mon 30th Oct 2006
I couldn't agree more about maintaining discipline.
It is relative to the trading system. It can take just as much discipline (or maybe more) to stay in the market as it does to stay out of the market.
Thanks to DT's efforts we have several trading disciplines to choose from and perhaps more to come.
KJEB
Wednesday November 1st:
We have had mixed reaction about publishing the 5 current IMS systems.
We published the five systems to provide a broad perspective on how the SAME IMS READINGS perform, given different filters.
As you know, all 5 systems are profitable - the results were published at: www.insight.net/performance2.htm
However, it is very important for us, and our members that we don't 'overcrowd' the IMS with multiple methods of trading.
Our members are right - too many systems can potentially create confusion and loosen discipline - eg., which particular system should I follow?
This is why, today, we will simplfy our service to just 3 key systems:
System X, System Y and System Z.
System X = Dow IMS xWave Trader [an exceptionally profitable, stop-loss based system]
System Y = Dow IMS 30-70 System [as before]
System Z = Dow IMS 0-100 System [as before]
Other systems [25-75, 35-75, 40-60] are not necessary and - while profitable - add unnecessary clutter. They will be removed.
To read more detail about each of the systems [X, Y & Z], please visit the relevant "Learn It" pages...
System X: www.insight.net/trading-system-X.htm
System Y: www.insight.net/trading-system-Y.htm
System Z: www.insight.net/trading-system-Z.htm
Full performance figures are published at: www.insight.net/performance.htm
Pay particular attention to System X performance
More about System X...
In my last post, I mentioned our research into...
Staying 'Long' through bull-market neutral periods, and staying 'short' through bear-market neutral periods...
The basis of the Dow IMS Wave Trader [System X] is that we allow ourselves to maximize profits through an entire 'wave'...
In other words, we go long and we STAY LONG through the full IMS up-cycle from an IMS below 35 right up to an IMS above 65. We only exit [and reverse to short] if our fixed 1.0% stop-loss is hit through this move.
Similarly, if we are trading 'short': we go short and we STAY SHORT through the full IMS down-cycle from an IMS above 65 right down to an IMS below 35. We only exit [and reverse to long] if our fixed 1.0% stop-loss is hit through this move.
These rules mean that we are ALWAYS in the market using this system, either Long or Short... NEVER out of the market. The system was developed and tested through 2006, with excellent results.
Performance results [since Jan 2006] repeated below:
Total Number Of Trades: 24
Total Number Of Winning Trades: 17
Total Number Of Losing Trades: 7
Total NET Profit Points: 2,947
Next week, we focus further on System X. We will apply the EXACT SAME long/short signals to other major indexes:
FTSE 100 Index
Nasdaq 100 Index
S&P 500 Index
Russell 2000 Index
Tables will be published on the 'performance' page.
Thx for all your valued feedback - DT.
I went through and reviewed the trades for the system X trading mechanism. The results are even better if you actually have the stop-less set in your trading program to get you out of the trade when the stop is reached.
Great work DT.
Yours,
Incorrectness.
Dear Dow Trader'
What a fantastic system, well done!!
I have watched it for some time now. Where is the best to start with your very first trade. In other words when do I enter the system?
Once again well done Dow Trader.I am looking forward to the other indices. Is there any chance what so ever to have the Johannesburg Stock Exchange - ALSI 40 - in this system for your South African clients??
Kind Regards
Danie
trader247@worldonline.co.za
1 November 2006
Dear DT,
Pardon my ignorance.
I did a little more reading of your materials about the 1% stop loss.
Is that 1% stop loss actually baked into the IMS indicator.
Therefore all I have to do is watch the indicator and not worry about any math? You do it all for me?
Thanks.
Now we have basically three system all utilizing the same signal but each very different from each other. The participation within the blog section is great and we appreciate all of your hard work Dow Trader. Great Job
Kenny C
2 Nov 2006
Hi
Congratulations on a simple and profitable system.
I live in Australia and it is not practical to trade the signal 10 minutes before close. Are there many people who trade the signal after hours?
Johno
I am extremely impressed with the new strategies put up and would like to express my appreciation to all those who have shared their spreadsheets,knowledge and insights to shape into profitable trades. I am new to this but am highly impressed so far.Hats off to DT for the effort put in getting so far and am sure the future looks very bright. Good luck to all.
Dow Trader,
Thanks for all the updates, great work!!
Have you back tested these results going back a couple of years? Also, one can make more money going with an ultra ETF that doubles the results (both positive and negative). Has anyone considered doing this? Thanks.
Thursday November 2nd:
Thanks for all your positive feedback [VJ, Kenny C, KJEB, Johno...] - I think we have got it dead right with the new layout [System X, Y, Z].
Quick point about the stop-loss in System X - yes, this is built into the signal generator, so if a stop is hit, the system will let you know automatically and provide the appropriate long/short signal... all the math is done, so you do not need to worry about this.
Also note, we have now attached a different 'time' format into the blog comments, so you know exactly which date and time they were posted. Sorry to take so long - sometimes we just prioritize things in various orders of importance.
Much of the important work has been done now with System X fully published. We are watching the markets closely today, in anticipation of the jobs reports. But despite this [as always] the IMS system will take precedence. We are asked quite often how 'fundamental or economic news/data will affect the markets.
The simple answer is - nobody can ever predict economic/news announcements with any real degree of accuracy - only take a calculated guess.
Point in hand, as traders our job is not to predict, but to adapt our position in the market if need be. We follows a systematic [IMS] approach to trading and build into it, a mechanism for accepting both winning and losing trades. We have a stop loss of 1% baked into our system, so if we are wrong, we have to be ready to take it on the chin.
This is all very much about attitude, maintaining discipline, admitting when we are wrong [stop-exit], and confidence in the systems 'overall' ability to produce sizeable gains in the long run [always look at the larger picture].
Best regards - DT.
hi
could somebody explain what an ultra EFT is and how does it double results. Great work DT on new system
tks
I ran the X-IMS Wave signals against historic mini DOW open/high/low/close data from CBOT for all of 2006.
Assumptions:
Open contracts are rolled over 2 days prior to expiration.
Placing trades at the close of mini Dow trading (4pm Chicago time) about 1 hour after the DT signal...
Trades:24
Winners:18
Losers:6
Net Profit Points +3092
Placing trades at the re-open of mini Dow trading (6:15pm Chicago time same day) a little over 3 hours after the DT signal...
Trades:24
Winners:18
Losers:6
Net Profit Points +3175
This is good news for those who are not able to get to a computer to place a trade as soon as a signal is issued. Note that some brokers don't actually let you place "after hours" futures trades.
I have also been looking for an automatic stop-loss level for risk management purposes that does not interfere with DT's signals or built in stop loss.
Looking at the daily futures high and low prices vs. our signal directions for 2006 I found that this stop would have to have been set at a minimum of 2% against the actual futures price so as to not interfere with any X-IMS DT signals.
KJEB
Hi guys,
Can anyone please recommend me a good broker for spread betting whi offers 1pt spreads on the DOW?
All the ones i found in the UK trade at 4pts or more.
Many thanks!
Can someone confirm that 1% stoploss equals 120 points if the Dow is at 12000?
Therefore set SL 120 above when short and 120 below when long.
Thanks
DT,
I am a very satisfied subscriber. The new additions look like dramatic improvements on an already great system. So, it is with some reluctance that I ask the following question, based on some recent posts:
What if your trading system is based in part (or entirely) on the "gold" signals on your DJI trend index? How would that perform?
Doug
Apples says: Yes
120 points at USD 120.00 = 1%
The stop loss is a safety measure to limit losses when trading. A trader will decide on the maximum loss he/she can tolerate per trade, mostly calculated as a percentage of his/her trading capital. For example if you opened a long position of just 1 contract on the mini Dow ($5.00 per point), and your trading account was $1,000, then if the Dow future went down by 10 points from your starting point, the loss would be $50.00. This would represent a loss of 5% of your trading capital. Thus if your stop loss was placed at just 1% at the opening of the trade, the Dow could only drop by 2 points before you would be stopped out. As likely as not, the index would then regain its levels and sail past the stop loss point to cause much anguish to the trader.
If you were in a winning trade, however, the stop loss can be adjusted upwards to ensure that only a certain percentage drop (in a perfect world) would be lost on the high point of your trade.
The Dow Trader’s 1% stop loss will (I am guessing) be based on a trading capital of many thousands of dollars so that the index would drop far more than 2 points before 1% of trading capital would be lost and the trade would reverse.
In a sense we are in a trading co-operative, benefitting from a hypothetically large “pot”.
System X will save us all a bit of heartache by having more tolerant stops than we could set on our own. Good luck to all of us who will share the exhilaration of trading this new system.
Rob
PS not used to blogging - hope this doesn't appear twice
Hello,
I'm considering joining but would like to communicate with several members who have been using this system for more than three months, I have some questions. I would prefer to speak on the phone or via e-mail. If you could e-mail me your information I would appreciate it. Thanks! chris_trader7@yahoo.com
I believe (and DT may want to confirm this) that the 1% stop loss calculated by DT is done at the END of the trading day only. It is not triggered by highs or lows occurring during the trading day.
So if you are planning to set a 1% automatic stop with your broker you will most likely exit too early.
Based on calculations using actual futures data for 2006 (see above) if you had set an automatic 1% stop loss you would have exited too early on 6 occassions costing you 1340 points! It would have helped you only once +93 points!
I think the best solution if you always want a stop in place is to set an automatic stop higher maybe 2% - 2.5% and let DT's signal handle the 1% stop trigger.
Also you should be using position sizing as well as stops to manage your risk.
KJEB
Hi
"KJEB" said use position sizing as well as SL, what does this mean.
JP
Hello,
From what I've seen this sytem is great! I have just one question: How long do you plan to keep the dow trader available to the public? I would hate to ever see this sytem not to be available.
Hi kjeb,
You might please expand on what you mean by positional sizing as i have not come across term before
have you tried to use the system on forex trading end of day..say starting at 12 am till 12 am for 24 hours... do you thing the 30/70 thing would work?? has anyone tried??? is any one even interested in finding out ??? am i the only one that has thought of doing this ??? does this even sound like it could be done??
Just signed up. What a great program. Thanks. I love the new system X and all the feedback. Great job.
John, I agree it sure looks to me that today would be a viable enter point since the IMS is climbing from below the 35% line.
Kirk
Apples says: If you check out FAQ number 6 on the site, it explains exactly what the 1% stop is and when the check is made. Briefly, it is as "tiger" has already said, a function of the dow itself. And the stop is checked once a day 30 minutes before close.
Hey Dow Trader,
This is a great service. I have had it for over a year. I did not do much with it until you made some of the new updates. I'm still used to trading the "Old" way of 123 tops and bottoms. This works well and has been very profitable for me lately. Thanks so much for your hard work on it!
To the Dow Trader geniuses
(Great Job to you All)
...prior to the new X, Y & Z system, the final IMS number displayed at the end of the trading day represented calculations based on the percent weighting of all 30 stocks in the Dow.
If we are now using another method of calculating that IMS number ....will the results be the same?
Were the IMS numbers calculated with the old (percent of weighting) method used to back test the new X, Y & Z systems.
Shouldn't we now test the New Systems numbers agagaint the Dow. I may be totally of base but could someone clear this up for me?
WorldSpreads offers 1pt spreads on the Wall Street Futures (Dec) and also the same on the FTSE 100 Futures (Dec)
Note that 1pt spreads are ONLY available during market trading hours!
IVO
Good Day Dow Trader:
I just love your system. Could you clarify something please. We must take action as per the signal about 30 minutes before closing of the market. That is 15:30 in New York. If I update the Dow Trader the time of the signal is +/- 30 minutes delayed. Do I wait until just before the actual close or do I trade 15:30 with a delayed signal?
Kjeb I would appreciate it if you will contact me at:
trader@worldonline.co.za
Regards
Danie
I would like to know if anyone has tried DIA and DJX LEAPS with the DT and the results. I am a novice but have attended some options trading classes. The DT trading system looks very promising.
Following up comments by KJEB on the 1% stop loss and so on.
I want to stress that, all those who were interested, and had a copy of my spreadsheet on the 0.75% reversal, it is based upon my trading platform. IE. I spreadbet and the lows and highs are not as high and as low as the DJI daily.
So, it is a very valid point to be careful that you check your own trading system how it works.
Alternatively just 30 min before close one could apply if any at all!
Rgds
Kevork
Hello, to girltrader, you need to read the trader manual to find your ansewers.
deadduck
Hi all,
I have revised the popular dow trader spread sheet which calculates your P/L, stake, spread and so on...
The revised version now includes:
Long/Short column;
Dow Close position
- Dow Open postion
= Gross
- Spread = Net pts
New column for GSL and the Profit/Loss field has been adjusted to deduct the Grtd Stop Loss fees (if any) from you broker giving you precise P/L minus spread and minus GSL fees.
If you want to make use of it you can download from here:
http://www.nordicwhite.com/DOW_trader_sheet.xls
Regards,
IVO
This is the best program I have ever used and I think the comments from members are excellent.
May I make a suggestion which I think will affect all of us at some point in the year. Would it be possible to have a telephone link so that if we are away from the computer say on holiday/business or whatever, we could phone and listen to a recording of the end of day instruction? We would then be able to let our trades run and not be worried what is happening when we can't get to a compuuter.
Keep us the good work. CFG
Hello.
New to Dow trading, coming from Forex. The dow values are all based on the big Dow. When trading the mini-dow, it doesn't matter about when to enter the trade? Would you just follow the X signals for the big Dow? Thanks!
Hi,
i am interested in jioning discussion portal and would appreciate recommendations of good one as i am sure there is a lot of rubbish out there.
Many thanks in advance.
Dave,
Could you explain opening range. I am considering trading the DIA.
Great system,great site,great people. What a combination.Question.
Does the e-mini dow contract automatically roll over to the next month?I'm trading the Dec06 contract.Thanks for the support.
Hi Kevork
Could you mail me your spread sheet. I had sent a request some time ago but I guess it was lost in cyberspace. I am new to this business and am still learning.
my e-mail is bava0123@gmail.com
b regards
Hi All
I am new to trading and in my research found the DT site.I really enjoy the blog. My question is -Are there any Aussies using this program and if so would it be possible to contact me so I could have a chat. Also are you using a US or Aussie broker to trade the mini Dow.
I have not purchased yet and would like to talk to another Aussie using the program first. Thank you all for great info and best of luck to DT team.
jess2mont@bigpond.com
Rgds Jessmont
Diana,
As far as I know the IMS calculation method is the same as before. The IMS calculation is also the same for X, Y and Z systems. Each system simply uses a different threshold to determine when a movement in the IMS becomes a trade signal.
KJEB
Hello
Congratulations on a great system.
Regarding stoploss rules, if my 1% stoploss was hit at for example 10.30am would I exit/reverse(if system X)at this time or wait until 30 mins before end of day?
Best wishes
Happy subscriber .Jim
I have a couple of questions as I'm new to this.
First, do you make sure you close a "dow emini position" on the third Friday of Dec. for a Dec. .
Secondly, if a guy wants to trade 5 contracts is it not the same a buy one BigDow ($25.00).
If anyone can answer these questions so I'm a little clearer it would be much appreciated.
Hi looking at this system but have seen a few other "always in the market" systems that arent so good.I added up the profits vs losses and it seems the system is in $29470 profit since january.That is quite alot.That would be around 35k per year using 10 per pip , imagine it with 25 per pip.Im still trying to decide if its real or not.Ill look into it further any comments from existing members would be appreciated.
Hi,
all well I'll say it again the Dow Trader is fantastic ..in terms of profit, innovation & support!!
By the way are there technical difficulties, as now comments appear to have been posted since Nov 9th
take care all
Anthony
Hi
First trade first profit, thanks DT.
JP
Hi Dow Trader,
Great service! One question concerns recent performance of System X versus System Y. System X (IMS Wave) has been long from at least 18 October to today (Nov 14)realizing a gain of 299 points in the mini Dow. System Y (IMS 30-70) went long on 06 Nov to yesterday(Nov 13) realizing a gain of 26 points in the mini Dow. At this time it seems that System X is the winner! Observations?
Hi,
I would like to communicate with "Ram" who posted a message on the 27th of September at 10:50 AM. Would it be possible that you send me the track record you did from the options on the DJX? It would save me to do it myself all over again. thanks a lot,
Sylren, expansion101@msn.com
Hi all - yes I'm liking this too. Entered my first DT trade on Nov 3 and stuck with it, which took some willpower on Nov 9 (73 point drop!). But now some 300 points up on my original position at £8 a point! Keep up the excellent work DT!
I have just signed up for this service and want to know members views on the pros and cons of spread betting versus
buy the e- mini dow directly at the cbot. Typically my platform charges a round trip per contract of 8 $ and the spread is usually 1 point sometimes 2.
How does this vary compared to spread betting companies ?
I would like to say thank you to Tim for a great spread sheet covering stop losses and calculating data for other
markets.
Thanks again
Ian
Diary of a trader...
On Nov 6th,as per system y signal, I went long and bought 4 contracts of DIA Dec 120 call at $2.30. On Nov 7th I watched excitedly as the option value went up to $3.00 giving a profit of $280 (30%). I asked myself if I should just exit the trade and pocket the profit or wait until the system y signal went short(sometime after the US elections). I decided to stick to my original plan of exiting the trade only system y says so. On Nov 8th, the market reacted negatively to the Democrats's strong win but then recovered most of the losses by the end of the day. Needless to say I was relieved to see my profit move back up to a decent $240 (26%). After the heart-stopping roller coaster ride, I asked myself again if I should exit but decided to stick with my original plan. On Nov 9th, market sentiment took a turn for the worse and I saw my profit going down further. I decided to finally exit the trade at a $120(13%)profit. I was disappointed that I did not manage to hold on to the trade until I received the exit signal although I was happy to have made a small profit.
Some things I learnt from this trade:-
1) I am not lion-hearted.
2) I traded an amount too large for comfort.
Hi Dow Trader
First trade going very well. Thank you!!
You mentioned a similar system for other indices. Is that still a possibility?
Regards
Danie
I have started reaping some profits already so great work DT.Just an observation I thought would be of interest. I was looking at the cutoff between going long/short and vice versa and realise that if we cut say 10 or 20 minutes after the open instead of in the evening, wemay be more profitable. I was working out this and see that there are approx 700 points extra hidden in this approach. This would be in the system X and only 5 losses instead of the 7. Hope I make sense. Would love to hear others observations on this as well.
Hi Rams:
Thanks for your option backtesting, can yoy tell me where to find option price history like you can for stocks?
If you have your backtesting results in a spread sheet I would appreciate a copy @ mcknz_jhn@yahoo.com
Thanks in advance,
John
Bob,
The Y model will Exit when the IMS reverses direction and the IMS values since the last signal were in neutral territory (30-70 range). This happened on 13 Nov when the IMS dropped to 50 but the high signal during the previous signal phase only reached 53.
The X model ignores the IMS reversal if the IMS values since the last signal were within its neutral territory (25-65 range). So it stayed long on 13 Nov ignoring the reversal in the IMS because it wasn't coming off a high enough level.
Also if the end-of-day 1% stop is touched then Y will exit whereas X will reverse signal.
It will be interesting to see how X,Y and Z compare over time as the market changes rhythm.
KJEB
Hey all,
I have been a subscriber for a little while now. I just wanted to note that these systems do work. However, the only way is to follow the signals exactly as they are prescribed. There is no need to monitor quote screens while the market is open. Towards the end of the day you just login, look at the current signal, and act accordingly. You honestly do not have to do anything else. It is fantastic.
I noticed that the signal to go long, short, etc. appears early in the day, not just at days end. I also note that one investor on the blog believes that investing in the morning would have added to the profit. Although the manual says at 3:40 EST, doesnt the signal really get posted earlier in the day?
i think you are doing well with the current system as per your result so i would not suggest to change to 15min ,FTSE or intraday system. i donot understand why people expect to become rich overnight it took 35 yrs for warren buffett to become second richest man in the world but what makes different between him and another traders is that consistancy and that's what i want from this system.
i just entered my first trade but i am nervous as there is no fear in the market at present and i have short position but i have seen your result and i am confident about it let's see
If you are not adverse to leverage you may want to consider trading the Profunds Ultra Dow ETF - DDM and the Profunds Inverse Ultra Dow ETF - DOG. DDM moves at approximately twice the rate of the Dow and DOG moves inversely twice the rate of the Dow. When you use these you need to remember to set your stop loss at 2% as that will represent a 1% move on the Dow. If you really want to maximize return, buy these shares on margin.
Hi Dave:
I have a few questions from your Sept 19th comment on DIA options.
How do you check the delta on the DIAs?
How are you are hitting sucesssfully 90% of the time when the IMS is hitting in the 70s?
Do you use any stop loss ?
John
Dear DT,
There will always be skeptics out there, and that's O.K. We need them so that we can literally shove it down down their throats when we keep on making $ on a system, that keeps changing as the market changes itself.The reason I say WE is that,to the contrary of what people I think don't know about the DOW TRADER ,he uses our input, the members, who just as the DT want to make $.The old system worked in a volotile market, and the new system is working in this one. I just closed out my first trade, 1460$US profit.
Thank you DT. Keep up the good work
By the way I trade the Mini DOW and close my trades when the IMS is over 80, and under 15(long,short) I get back in when the IMS drops or when the IMS increases. Has worked for me.
Has anyone an updated excel sheet with OPen, high,low and close of the DOW for the day from September through to today. I am still trying to work out how to download the figures on to an excel sheet without having to put them in all manually.
Thanks
Ian
Hi Didier UK,
I would like to know which spreadbet company you use as mine has an overnight rolling charge for both buy and sell bets.
Best wishes
Bill
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