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:
«Oldest ‹Older 201 – 400 of 750 Newer› Newest»Have you considered a mobile device (pocket pc phone / smartphone) friendly site - accessable via a mobile web site? This would allow mobile people to view the DT. This would also be great for the INSIGHT site as well.
Reply to bill,
I use Capital spreads. They have a four points spread on the dow rolling daily and only charge you overnight on a long position. If you are short they pay you ! I tend to use the rolling daily for short positions. When going long I use a future contract although there is a 8 point spread but no charge for overnight position. It works out cheaper on a long run.
Hope this helps
Didier
Bill
I use etrade they pay interest on rolling when you are short.
Rgds
Kevork
Bob,
DIA options are only traded during market hours so you are subject to the Dow gapping between trading hours where you are not protected by your stops.
Most real futures brokers trade mini-Dow futures 22 hours a day (except weekends). So in my mind the stops are much more effective on the futures.
If you are smart about it then I think mini-Dow futures can actually offer you better downside protection than options.
Also in my opinion the mini-Dow futures are much more efficient (for many reasons) and more cost effective than DIA options.
Options traders will of course feel otherwise.
KJEB
I am new to Dow Trade system. What sould I do if I am holding/Stay an e-mini Dow position and the position is expiring next day ? Am I forced to sell/close the e-mini position ? What if the Dow Trade signal is "stay" ?
Someone asking about downloading historical data for Dow.
Go to this link and from bottom use "Download to spreadsheet" option
http://finance.yahoo.com/q/hp?s=%5EDJI
DT, Thanks for having a keeping a positive, win-win attitude. I've had the service for over a year and now have several friends watching it with plans to join in. I'm now up over 200 points since going short. This is a great service.
Thanks,
Brent
I'm taking my first ride with this system and, obviously, it's a thrill. I'm holding 4 futures contracts. Today, there are signs that the big plunge seems to be tapering off as we're starting to get some intraday pullbacks, I'm tempted to close out a couple of contractss to lock in some gains. Any comments, pro or con? Have any of you backtesting fanatics looked for correlations in the IMS readings and price choppy-ness, or any other signals that would keep me from getting too greedy.
Thanks, guys.
Hi Ian
I take my OHLC figures from http://finance.com/q?s=%5EDJI
click on historical prices on left, highlight them, copy and paste into my spreadsheet. Can only do these one day at a time however, as they are "upside down", ie. yesterday's figures at the top of list.
Don't know if this is of any help to you.
Mike
To Ian,
You can get the updated list of dow open,close, high, low prices from finance.yahoo.com. Go to the DOW page, go to the historical prices page and there it is. There is a link to download in spreasheet format. It will give you a lot more than just september though.
Hope this helps.
Rob
If I am trading the E-minis and the expiration date is close and the buy/sell signal hasn't changed, do you close your position and open a new one for the following month?
I'm excited to use your system and impressed with your signal results for 2006. Do you have any signal data for previous years to see how the IMS signals would have performed for 2000-2005? If you do, is there any way I can get those signals from you to check against my own money management system?
Hello DT
I very much admire your honesty. I reallly do hope you will be here for the next 50 years
I am a new subscriber I have been doing some option trades for last 7-8 months spent thousands on training classes and thosands on losses this is the best system that I have come across. Great job DT!! I have done 2 trades so far in November both profitable. I am trying to use the approach that RAMS mentioned. RAMS if you have the spreadhseet of your calculations could you send it on to nkapoo1@hotmail.com.
NK
Apples Says:
There is an interesting point here isn't there? If DT membership continues growing (as it should if it works) then one day so many people will be trading the DOW and always winning that there won't be enough losers in the world to balance out all the winning trades. Imagin that!
So don't worry about DT closing the service, but worry about the losers drying up. Luckily, of course it will never happen because as we all know "there's one born every minute".
Not me though, because I am about to join up. Oh yes, I am in the UK so if you need "a hit man" to handle the naughty competition, just let me know - the fee will be a years free membership.
Hi DT
Great service, I'm £1000 up after first 2 trades, I think you should name the nomark from the UK so that we, your members can go onto the other sites and put people right about the guys motives, this is the best signal system available , i would pay twice as much if it meant the service would remain open
DT:I have never traded options or futures. Reference you post on Nov 28, would you please explain how a dow contract [$25] adds up to $85,000 per single contract. Where can I learn more [the ins and outs]of dow mini futures and options?
Bill says
many thanks to Didier and Kevork re.
Spreadbet companies info.
Great system. Recently signed up and the first two moves are making me money! I signed up with the screen snap shot of Go Futures website. Really easy for an old man like me.
Thanks for the $$$$$$, keep 'em comin'.
Hello,
can anyone recommend a good online broker where I can place my trades 24/7 with low transaction costs and a low account minimum?
Help muchly appreciated!
Dingo
Hi DT
I saw the bad blogg on Trade2win a few days ago and I did decide to post my experience so far - which is so far so good am very happy with price of service and results to date. I think Trade2win and probably some other forums are really useful sources of information but it seem the knives are always out ready for any new signal service and I dont think that is helpful at all. Views from actual users are much more useful than views of people that seem to spend half their day just bitching about one signal service or another without it seems actually subscribing to them.
Keep up the good signals DT one happy customer here.
DT, I have had good success with this system. Really glad to have found a reliable system that operates this smoothly. I have purchased a PDA to access the web page when I am not at my computer. Could not get a log on page or access the site. Any suggestions on this? Sorry if this question has already been asked. Russell
I am a relatively new member of the Dow Trader, and have been testing the system using several strageties of paper trading. On 9/16/06 Dave posted a comment stating that he buys the "front month" of Dow Diamonds optons when the Delta is 70 or above. What is ment by "front month"
Thanks,
Marv
Hi, i am spreadbetting using the DT for buys and sells, which contract month would people recomend? my issue is if i buy a DEC then the current go long lasts till Jan do i sell and reopen a Jan contract or do i start with the next full month contract and hope the signal reverses before the contract ends??
thanks for your opinions
Richard
Hi
I live in Canada and I was wondering if there are any traders out there living in Canada and what, if any, tax implications other than reporting foreign income to revenue canada they may have experienced?
Please reply to the blog
thanks......Paul
Just signed up. Great system so far. Still not sure how to handle expiration dates with contracts and option.
When trading the E-minis or EFT options and the expiration dates are close to expiration and the entry signals have not changed, do you close contracts or option positions and open a new ones for the following month?
How come we weren't stopped out of the current long trade. According to my understanding, when we went long at 12,221.93 on 11/30/06 we were supposed to place a stop at 12,099.71. We hit a low of 12,070.52 on 12/01/06 which should have stopped us out. What am I missing here?
Regarding stops - please read the members FAQ page: www.insight.net/dow-faq.htm [see Q6]. The explanation is there. It is important that members familiarize themselves fully with the trading rules, also clearly detailed on the quick-guide page: www.insight.net/trading-system-x.htm [see rules 1 thru 6]. Best regards - DT.
This message is to the anonymous that got stopped on 12/01 and posted a message on Dec 04. I too got stopped that day, but it was my mistake, since DT's rules state that the stops should be mental until the end of the day, and only then the stop should be valid if the Dow price is still at that level.
What i did is that I jumped again, fortunately I did it at the bottom and now I have recovered my loss and I am making a small profit.
I guess the lesson here, is know the rules and follow them.
Alcastro
To anonymous who got stopped out.
If you want to have an automatic stop I suggest you use at least a 2% level around 250 points currently then follow the DT signals as instructed. This is what I did and am now around 90 points in profit.
JP
I fully agree with JP on the stops. I do keep stops of over 250 points myself and am in good profits as well. For those who spreadbet, I take a futures contract when I go long and rolling on my short positions. This was suggested by someone on the blog earlier and I feel that to be the right approach. But I would love to hear others views and any better approach if any to this.
Dear DT,
No one seems to help answering the previous questions regarding what to do as expiration date is approaching (Dec 15):
If the signal says "Stay Long" (as currntly is), and expiration date is Dec 15. Should we close (sell) the current Dec contract and enter (buy) the March cont? and if yes, How many days before the expiration date should we do this switching?
You advice is much appreciated in this.
and before I close, congratulations to all on this remarkable system.
New user-love the system. Seen several ask the question about near-term expiration of mini's and still in a long position. Do we exit before expiration and repurchase long in next period?
RE: No one seems to help answering the previous questions regarding what to do as expiration date is approaching (Dec 15):
You need to roll out of the DEC Contract & roll to the next (MARCH / "H07").
Simply go flat on DEC and open the same position in the MARCH contract. But wait till you get close to expiration.
Hope this helps.
I usually roll over the Thursday/Friday before expiration.
I place both contracts underneath each other on my TWS and roll when I see volume shifting to the new contract.
By the way, my DT Member section is down due to server error now at 3:30 EST.
Peter
RE: EXPIRATION
Also note that when I mentioned to wait till you get close to expiration, I did not mean to wait till the last day! (You certainly do not want to end up exercising the contract)
I usually Roll my positions about two days prior to Expiration.
On my broker INTERACTIVE, there's an option for "automatic rollover contract" of your current holding that will expire. Double check with your own brokerage firms if this option is available ..
If no option w/ your broker, just do what the other poster suggested ..
Yurs Truly
>>>>>>
RE: No one seems to help answering the previous questions regarding what to do as expiration date is approaching (Dec 15)
You need to roll out of the DEC Contract & roll to the next (MARCH / "H07").
Simply go flat on DEC and open the same position in the MARCH contract. But wait till you get close to expiration.
Hope this helps.
December 06, 2006 1:31 PM
<<<<<<<<<<<<
This is a reply to Paul (from Canada). Your broker should provide you with a monthly, annually statement. Just treat your gains/losses like any other of your Canadian investments. No need to treat it as a foreign income. Hope it would help.
Good trading to all.
Albert
New User,
I am spread betting at the minute, but want to trade mini dow, and I was wondering do you pay capital gains tax on futures trading? or just income tax?
Shane, in Ireland
Bob, regarding your 12/1 post: Since my experience is more in daytrading, I too have a hard time sitting on my hands thru the inevitable pullbacks. What I'm trying with this system is this: Buy 2 or 4 contracts when DT says. When I have a healthy gain on the books (especially after a particularly strong day or if the current price is getting too far away from the 8 EMA), I cash in half the contracts. I basically throw this half off the train and have them wait for a pullback. If the pullback comes, I wait until it looks like it's bottomed out - then I check to see if the DT is still "stay long/short" and the IMS is not peaking. If it all looks cool, I put the orphaned contracts back on board and let them ride some more.
Yes, if the pullback never comes, I won't maximize profits - but at least I'm still participating in the full move. And if a big reversal DOES happen, I've at least booked some offsetting profits. That's my stategy. Not much history with it yet; but so far so good. Anyway, with this approach, I think I'll be saying "oh, well" more often than "oh, s**t" - which makes my wife happy!
Best of luck,
Michael
To Dingo,
About on line brockerages. Take a look at www.interactivebrokers.com. You can trade just about anything on one platform from forex to options to coffee beans. Low spreads and low transactions costs. You can subsrcibe to whatever market data you want. Take alook
Cheers
Ian
Do we only take the signal and execute the trade at the close or are we supposed to follow the updates throughout the day and take the trade as soon as it changes from long to short or vice versa. I'm still a little unclear about which sognal I'm supposed to execute on.
does anyone trade on the proshares ultra dow funds?
i'd like to chat with you.
thanks,
Tim
Hi, this is for VJ. Would you be kind enough to explain why Futures for a long bet and Rolling for a short.
Very interesting and exciting site, can't wait to get started. One question: Would it be best to jump in long right now with the current signal or wait for the next short signal. It's my guess that it would be best to wait as it seems that we get a new signal fairly soon after the IMS gets above 60 (except in Septmeber when the signal changed to short about 15 days after the IMS hit 60).
Any thoughts?
Mike
Paul,
tnx for reply. how do you set your stop limits? is it at 1% or do you just go by feel? If you follow their 1% rule that would be the same as 2% on the proshares correct?
Also, maybe this is a dumb question, but do you buy/sell on margin so that you can sell out of one and buy into the other? Or do you play it safer and only use cash?
I would love to stay in touch with you, perhaps we can exchange emails. I will probably have a few more questions.
tbrown7777@msn.com
tnx,
Tim
To anonymous Dec 08.
First I suggest you look at the QA section, however the important DT signal is the 15.30 this is the trigger to enter, hold or exit a trade.If for example the signal indicates "Go LOng" at 10.30 ignore ut monitor until 15.30, then do as instructed.
Good Trading
JP
Why did System X go short on 9 October?
Hello, I signed up last friday and am doing my homework this weekend.
Going though the data I noticed that on 9 Oct DT gave a "go short" signal while the IMS went from 66 on 8 Oct to 57 on 9 Oct.
I dont understand why this signal was given as we were still below 70? (it resulted in 72 pts loss).
Also definitely no stop was hit as far as I can see. Am I missing something?
Thanks,
Stef
PS: great blog by the way!
Hi, This is for Cailin. I actually realised that the spread cost on going long was somehow high on a cash rolling basis.You will see that you are charged for each day of rollover. If you are holding a long position of say 10 days, you have to bear the cost of almost 10 points (if not more).I decided to take a futures contract as you are certain that your spread is say6 or 8 points depending on who your broker is. With this, I am certain about the cost factor. However, There isn't that much of a difference when I do a cash rolling trade when I go short.
I would strongly recommend that you speak to your broker and ask them what exactly the spreads are and the finance costs .
Hope this helps,
Hi, as a new member I am wondering if it would be a good/bad idea to jump in now with the long signal or wait for the next short signal (system X). My guess is that it would be best to wait.
On another note, in an attempt to further reduce risk and improve profits I went through the 2006 Dow numbers and found that every trade had a profit of at least 78 points at some point during the trade cycle. Some went on to greater gains of course but some reversed and resulted in a losing trade. With this in mind, here is a strategy that I would like to consider using;
System X:
1. For each new signal take 3 mini Dow contracts (buy or sell short as per signal.)
2. Immediately put in a sell or cover short order for 2 of the contracts to acheive a 70 point profit. eg: if the signal was to go long at 12,000, I would buy 3 contracts and right away put a sell order in for 2 contracts at 12,070. If the signal was to go short at 12,000, I would sell short 3 contracts and right away put in a buy order for 2 contracts at 11,930.
3. Let the 3rd contract continue to ride with system.
Using this system for 2006 would have resulted in a 100% success ratio for the extra 2 contracts for all of the 27 trades so far.
The extra profit: 27 trades times $700 = $18,900.
This method would have given a profit of about $1,500 more than holding 2 contracts for the full duration of each trade. It would have of course returned quite a bit less than holding the 3 contracts for the full duration of each trade but the losing trades would have been much smaller than letting the 3 contracts ride for the whole trade.
With this method 2 of the 7 losses would end up being small gains and 1 of the losses would be essentially flat. The largest loss (-2410)would be cut down to -1710.
This method may not produce the absolute highest gains but it would increase the win percentage, reduce risk by taking some off the table (usually fairly early in the trade), and reduce draw downs. These are all factors that I seem to require to be able to sleep at night lol :)
I would love to see some comments on this idea.
Mike K.
ps. as I don't have historical mini Dow numbers I'm not totally sure that this would work with ALL of the trades, ie: it is possible that not all of the mini dow futures contracts had a positive profit of at least 70 points at some stage of the trade cycle.
Also, thanks for an awesome system. The published results and bulletin board are a sign of the success and confidence you have in your program.
I use the system and would like to recieve an email when the X system goes the opposite way... This would be supreme!!!!
Hi Mike K
I have read your blog with great interest. Especially the fact that the losses are even further contained.
Have you perhaps worked out the nett points you would showed profit with your way?
The Dow Trader System X has produced a staggering 3386 point profit, excluding the current trade.
The question is: Is it worthwhile to be super safe or rather lose some sleep but with a much higher profit?
I would appreciate it if you could post the comparison on the blog. It might just be the way to trade if you start.
Kind regards
Danie
Whoops, correction to previous post....when I considered the losing trades I forgot to reduce the amounts by 1/2. The figures I used came from the home page which shows amounts from trading 2 contracts. So the paragraph reading:
"With this method 2 of the 7 losses would end up being small gains and 1 of the losses would be essentially flat. The largest loss (-2410)would be cut down to -1710."
Should read......
.....With method there would only be 1 loss within the 27 trading cycles so far. Trade 10 would have shown a loss of -$505. The other 6 losing trade cycles would have had small gains.
Can't wait for the next signal to get started.
Mike K
Re Mike's interesting blog (Dec 10)about multiple trades, I have done some work on this in the form of a spreadsheet.
I have looked at the Dow daily results for each trade, and I believe that some of the trades do not reach 78 points of profit. I have several below that number. (I estimate that the Short on Feb 3 reached a peak of 56; the Long on June 29 reached a peak of 45 and the Short of Aug 23 reached a peak of 38, for example).
However, I believe that the principle of what Mike says is absolutely right...if you can set a second and possibly a third trade which has a limit order attached, you can end up with far more profit at the end of the year.
I have prepared an Excel spreadsheet which I make freely available to anyone interested (like earlier ones I prepared before System X was established).
[DT, I will send you the file separately, so that members can download it from the site, rather than having to come via me, if that's OK]
The spreadsheet analyses each trade for System X. It also uses the System X signals and applies them to the German DAX, which I have shown in the past responds very well to IMS Dow signals. Then for both Dow and DAX, I set up a trading and staking template (for spreadbetters) whereby two trades are entered upon each signal, the first a conventional System X trade, the second a trade with a limit order attached.
The spreadsheet allows you to set your own limit order levels to see how varying them affects results - obviously the higher the limit order, the bigger some of the wins are, but they are offset by other trades which fail to reach the limit, so the hit rate % is lower.
In theory you could add a third trade with a lower limit, and therefore a higher hit rate (say a limit at 40, where all but one trade would have won) to add yet further to the fun. 25 trades x 40 points = an extra 1000 points!
Obviously it could be applied to Eminis as well, but the spreadsheet does not illustrate that.
Good luck with it, and let me know how you get on (at tdw1@orange.fr) if you can.
Best wishes
Tim
Hi Albert
Thanks for the reply. I was wondering if you are using a Canadian trader. I was thinking of setting up an account with a US trader like xpresstrade. This means that the profit/losses would be in US funds, therefor the foreign income (or loss) with Revenue Canada....Paul
Tim,
thanks for your work on this idea. I'll check out your spreadsheet when it's available.
In order to find the trade cycle highs and lows I charted the Dow in bigcharts.com (java version) and went through day by day to get the data. Maybe the data is wrong but here's what I got for the dates you mentioned:
LOD = low of day
HOD = high of day
FEB 03 2006: SHORT @ 10793
Feb 7 LOD 10692
best profit level: 101 points
JUN 29 2006: LONG @ 11190
June 30 HOD 11288
best profit level 98 points
AUG 23 2006: SHORT @ 11297
Aug 25 LOD 11219
best profit level 78 points
I'm not sure where the difference in our numbers is coming from. Maybe bigcharts is not accurate. Where do you get your data from?
I have of course used the lowest lows and the highest highs of the trade cycles as opposed to closing prices. The extra contracts would automatically be sold at the 70 point profit levels because we would have entered limit orders to sell or buy/cover at those profit levels.
If this data is correct then the profit up to and including last Friday for the year so far would be:
3473 points profit for the 1 contract held for the full trade cycles:
3473 points X's $5.00 = $17,365
70 points profit for each of the 27 trade cycles:
2 contracts sold = $10 per point
70 pts X's $10 X's 27 trades = $18,900.
$17,365 + $18,900 = $36,265 profit
Trading a straight 2 contracts for the full duration of each trade cycle would have resulted in a profit of $34,730.....
3473 profit points (as of last Friday) times $10 per point = $34,730. This is $1,535 less than the above example.
As a side note, I found that selling the 2 contracts at 90 points instead of 70 resulted in an extra $3000 for the year with only one of the 27 "quick sell" trades showing a loss. Personally, I would start with a lower profit level and work my way up.
I'd like to work on this concept more. It may well be better to sell one at a lower level and the 2nd at a higher level as you suggested Tim.
In response to Danie, as I get rolling with this program I'll be less concerned about safety. In the early stages I'm most interested in preserving capital while building profits more conservatively if possible. As the profit cushion grows I'd be happy to get more aggresive.
Thanks for the responses.
Mike K.
Greetings - Just a quick note re: SHORT SIGNAL - when the IMS is significantly lower than the previous day, eg., today it is 63 from yesterday's 68, IT IS OKAY TO GO SHORT EARLY WITHOUT WAITING UNTIL 15:30pm. This is because the IMS is EXTREMELY UNLIKELY to move back up during the rest of the day. To clarify, if the IMS is appreciably lower [more then 5% lower] than the previous day and we have an early GO SHORT signal, eg., at 10am, then it is acceptable to go short. Happy Trading - DT.
Nice call today. I'm up 42 points. However, you may not want to publish the calls on this blog. Isn't it open to the public even for non-subscibers?
Also see Dow FAQ page Q2:
www.insight.net/dow-faq.htm
And Quick Guide:
www.insight.net/trading-system-x.htm
The trading manual states that the oscillator updates everyday before the close, so you will know then what the next day's move should be. I have only seen it update in the morning. Yesterday it changed to SHORT for a time then went back to LONG the rest of the day.
What is the best time to enter and exit positions based on this model? Should I wait some time in the morning after the signal for the day comes out?
Thanks,
Sean
This is a reply to Paul (Canada). I use the same online broker you are considering. Save a copy of monthly statements. When filing your income tax, convert the amounts using Revenue Canada's pre-determined conversion rate for that year and calculate like your other Cdn investments.
You probably have an online Cdn broker too to handle your Cdn dealings. Let's suppose you purchased some S&P options through them based on DT signals, the resulting Gains/losses would be considered Cdn investing activities, converted to CD$ of course. Foreign income by Rev Can's definition is business activities generated outside of Canada, such as rental income from a Florida condo etc.
Hope this would help. BTW the broker you are considering is excellent in all aspects. I checked them out through NFA site before signing on, and am very very happy with it. Albert
Well-done, DT for the great work!
Looking forward to seeing your Mobile Version.
Regards,
RE-Trader
great site.. i have been looking at dia options, djx options, oex options, profunds etc.. just the last two trades.. not enough profit and low volume.. i don't have an emini acct and not comfortable with futures. any one have an option suggestion.. also i havn't been able to locate expired option charts to backtest ... any help would be appreciated.. thanks
Hi VJ,
Thanks for that.
I trade ETrade at 5 point spread, or if it's after 2pm UK time I use worldspreads with a 1 point spread on the Dow.
Thanks,
cailin1950@yahoo.co.uk
Can anyone suggest a good broker for setting up an online account to trade e-mini contracts with this system? I live in the U.S. Thanks.
KJEB said on Nov 5, that by setting an automatic stop loss at 1% we would have lost an extra 1340 points on 6 contracts. I don't understand this. He is saying that the average stop loss was 1340 /6 =223 pts. But the average Dow price was around 11000, giving an av 1% SL of 110 pts.Could he explain please?
Quillan
Is anyone using this system to buy options on the Dow Diamonds? If so how successful have you been? Can this system be used in that fashion for call and put options on DIA (dow diamonds)?
Thanks
Bryan
I have had some degree of success trading the DOW with this system using DDM and DXD, the two Proshares stocks that move more quickly than the Diamonds. I have found it difficult to wait until market closing to actually act on the signals if I feel that the DOW is making a significant reversal or move to the upside.
I do feel, however, that I need to follow a combination of the WAVE system which is constantly invested and the 30-70 system which is a bit more cautious. This past week has been a VERY difficult time to be short especially when the indicator only reached 65. Still trying to work out a trading system with DOWTRADER but I do believe that this system has tremendous protential. I would purchase calls or puts on the DOW when the IMS is at VERY high or low levels. Would appreciate any thoughts.
Hey Bryan..I just signed up a week ago and will attempt to use the system for option plays. Unfortunately there is no historical option info to basktest the system. At least I can't seem to find the info. It will take some deeper research to see if this is possible for very short term trades. My first step is to front run the current month in-the-money options and go from there. If you find any info please pass it on and I will keep searching.
Dave
ezd96@excite.com
Can someone comment on a good online discount broker to use for trading the Dow e-mini?
I also have some securities (stocks and mutual funds) that I would like to transfer to this new account. So I won't be just trading futures.
etrade? schwab? tdameritrade? etc.?
Thanks for any feedback you can provide.
I've been papertrading the dowtrader for a while now but I just started using an online trading platform and I cant seem to get the quotes on this website and the quotes on my platform to match up. For instance at 15:20 the dow trader showed that the dow was at 12,475.56 where as my trading platform showed it to be at 12,566 Am I reading the wrong dow or something? My platform shows "mini sized dow ($5) mar 2007" I'm assuming this is what i should be looking at right? Any help would be appreciated because nothings matching up.
Historical option prices
http://www.prophet.net/quotes/options
Solimar : I use Farronline It seems to me its down everyday at one time or another..Sometimes quotes don't work even other times you can't trade.When it is down you can call the trading desk and get a quote and/or place your trade.I plan on looking for another trading platform in a few months or so..'Good luck..
DT, congratulations on a fantastic year with IMS. The only slip up I had was when I broke an entry rule and also got greedy. But as far as your performance records a useful potential add on might be to show average win or loss (even though I can calculate it easily enough) as this will help when calculating the Kelly ratio.
Thanks again and merry christmas and long may you continue.
James
woodyklein,
Please explain how you would use a combination of the 30/70 and the "always in" systems while trading the Dow DIA options (which I try to use).
Thanks,
Steve
anybody using wireless on their laptop... thanks
To everybody in this blog I wish them Happy Holidays!!!
alcastro
In case some of our traders were in the DDM or DXD proshares(they move twice the Dow approximately), the move down in both of these on 12/20/06 was because they went ex-dividend! In the case of DDM the total was about $6.75 American. Some of the ETFs do this especially this time of the year. Go to "proshares" to get the breakdown. Some of it is Dividend and some is short and long term gains. If we are following the rules, we would not have been in the DXDs. They had a $0.61 dividend! Howard
I signed up with Xpresstrade and so far they have given excellent customer service. Very impressed.
We are presently Long the Dow, and will continue to stay Long until System [X] states otherwise.
When I read this forum, I see some evidence of traits I have read about in the numerous books written by successful, disciplined traders...
Mark Abraham of Quantitative Capital Management puts it this way: "It is when the unimaginable occurs that the systematic trader remains calm, presciently knowing when to buy, sell, or adjust their exposure"...
If you are feeling weak-kneed, don't start second guessing the market. The moment you start saying 'what if I do this instead of that', then you are basically negating the value of any mechanical trading method. Be acutely aware of your emotions. If you are overly worried, you are holding too large a position - there is nothing wrong with the position [long if it says long, short if it says short], only your exposure...
It is better to reduce the number of contracts, or holding, step back a little but whatever you do, don't change course. This is money-management in a nutshell, a huge subject area I intend to tackle in more depth in 2007...
I would also recommend members of this forum to discuss this area with more intensity - this is much more productive, as opposed to simply talking about reversing or closing positions prematurely and trying to outsmart each other.
Mechanical trading, which we as decided trend followers use, is based on pre-set rules. The logic behind our system is objective, and built on innate intra-day demand/supply factors across all 30 Dow stocks. We rigidly follow these trading rules by placing them into a computer program thus eliminating any second guessing/subjectivity.
If we feel a trade may be going wrong [this does happen!!], then we do not question the signal, only our 'exposure'. We deal with this by reducing the number of contracts, often re-loading when the markets start moving again in the desired direction...
There are distinct advantages to mechanical trading, veterans often talk about - the basis of a mechanical trading approach makes life easier, working to eliminate emotion from trading decisions and actually 'forcing' us to stick to the rules. This is the single most important lesson learnt in trading by those who stay the course. In other words, it enforces discipline - and this is what Mark Abraham talks about. Break these rules, and you are no different to the gambler who ultimately goes broke.
So, lets get some more input on money management, a huge area of experimentation, learning, and extensive value to members. Think 'exposure', comfort-zones, small-steps. Talking of comfort zones, I'm off to spend some time with my boys... See you all in 2007...
Happy Holidays!
Hi guys, merry xmas and first time doing this. I use thinkorswim online broker. They handle stocks, options, mutual funds and like six minis at this point in time.And they keep improving an already impressive set of tools and analysis.Plus they are option friendly in iras.
To Anonymus with nothing matching up: You are watching the futures contract, DT signals are based on the index itself $INDU. I use Trader Workstation by Interactive Brokers and Sierra Charts and can follow and chart $INDU in realtime.
On TWS just enter INDU - Index.
Peter
I am a new member to Dow Trader and so far the systems look very impressive. i am trying to decide on a UK broker. Has anybody adsive on the best way forward, and should I look at commision by way of spreads or fixed comm.
To the anonymous that is having trouble getting quotes to match up,
I'm pretty sure the dowtrader is quoting the Dow Jones Industrial Average which is the cash market for what the mini dow is traded from. The mini dow will always be different than the Dow cash index. Also, I'm pretty sure that the dowtrader updates it's quotes every 10 minutes or so, so it will always be slightly inaccurate.
The reason the dowtrader uses the cash index, is because not everyone is trading futures. Others are trading options, DIA, spread betting, ect. But the point is the same, when the cash index goes up, the others move up as well.
Hope that helps.
In the UK the cheapest spreadbet broker I've found is
WolrdSpreads - 1pt spread on the Dow Futures
http://www.worldspreads.com
Joel, can you please expand on your comments?
Let's say I have a $10000 account...based on the probabilities, how many contracts should I trade at a time?
Thanks for the help, I couldn't pull up the sheet.
Ben B
Dow Trader,
I have had incredible success since late November. I have made over $3,000.00 just trading one e-mini Dow.
I would just like to say to all of our members that many of you seem to making this harder than it is. I know virtually nothing about trading and am consistently making money by following the trade signals generated by Dow Trader.
Like Dow Trader recently said, trade what you are comfortable with and you will not get "weak in the needs" when the market is adjusting. Just hang in with the signal.
Thanks Dow Trader for all of your hard work. I have three friends who are about to sign up for your service.
Happy Trading,
Brent
Hi all, Brent I think you have hit the proverbial nail on it's head.
We tend, myself included, to look for more in an already successful trading system. It's my New Year's resolution to trade the system and worry less about, what if I did this or that.
To Dow Trader: Thank you very much for your system. I have started in November 2006 and have made more money than previously!!
May you, and all the Dow Traders, have a happy New Year and a prosperous 2007
Kind Regards
Danie
I am new to this system, and thought to myself (and acted upon it stupidly) that I could outsmart the system and market. Dumb me. So, as the Trader has indicated, and the reason I came to this system and why most of you did, I will trade on their signals, not mine and keep my emotions out of the process. With a 70% win trading history, they know and have the analysis tools to trade far more profitable than I can. With that decided, I am feeling far more comfortable as the market moves in either direction. Stay the course as directed and we will all succeed.
Brent,
Thank you for sharing your experience - made $3k in one e-mini Dow since Nov. ! I am new to the game and am strugling with my emotion - i.e. I notice I am constantly trying to out guess that market will move and ended up day-trading and losing $$. However, just recently, the 3 systems (X,Y,Z) gave 3 different IMS signals - X(Long), Y(No trade) Z(Short). Which system (X,Y or Z) you use since Nov. ? Thank you for your advice in advance. Because this is the dose of medicine I need now.
Hello dow trader;
I'm a new member and I think it would be great to start a thread about money management (or position sizing as Van K. Tharp refers to it). The key to any successful trading is having a specific plan and following it. The plan must include profit exits, loss exits, time exits, etc.
This current blog is full of valuable comments and I fear that a special conversation about money management could easily get lost in the hustle.
Would you consider opening a new blog for just this topic?
Larry
This is a very exciting find. I've been trading options for a little over a year and this is the BEST directional trading approach I've tried.
I backtested all of the 2006 signals - buying a call option (ATM) on DJX when there was a signal to Go Long and buying a Put option (ATM) on the DJX when the signal was Go Short.
At no time during these trades did I risk more than $500 and I was always in a trade. This is a paltry amount but I wanted to see if this kind of approach would work even for a tiny investor.
I bought the options at market and sold them on the date of the signal. I did not manage the trades at all, except to close it and open a new one when the signal was issued.
There were 29 trades in this test, 12 loosing (41.4%)and 17 winning (57.6%). Eight of the loosers (66.7%) were Puts.
I estimated a $20 brokerage fee for each trade.
There was a NET GAIN on these 29 trades of $3110. Recall that at no time did I risk more than $500 - usually significantly less. That works out to over 600% for the year.
The overall profit seems to have been inhibited by the small number of contracts I could buy while keeping the risk (debit) under $500.
(NOTE: risking $1,000 would have MORE THAN DOUBLED the return because I often bought far fewer contracts because of the low cost ceiling - a position costing $195 each was limited to only 2 contracts to stay under $500, whereas I could have purchased 5 and stayed under $1000 - 25% more contracts).
I may also not have always purchasd the BEST ATM option. I adjusted just a couple of the Put losses (I chose a cheaper contract) and I found that I still lost, but the amount was just a little less. For example, if I had purchased the Mar 108 Put instead of the Mar 109 Put my loss would have been $120 instead of $140.
The dow trader is worth every penny. I'll continue this backtest, but I can assure you that there will be real money on the line as well.
If you have older signal data I would be delighted to add it to my test.
Larry
I am a new subscriber. I just want to know if anybody trade DXD & DDM using the signal.
Hi all, I'm a new suscriber since late Nov.
Brent, how did you make over $3,000 since late Nov. by just trading one e-mini dow following DT signals?
That means you were up 600 points since emini dows are $5 a point.
Counting the points from around Nov. I cannot get close to that number.
Could you please explain, I'm obviously missing something.
Joe
Last post for the year... Promise!
I ran the backtest again. This time I bought straight Put or Call options on Diamonds. I always bought the least expensive ATM strike. Again, I kept the debit under $500 and I traded every signal.
The results are comparable to the DJX backtest, net gain $3180 for a $500 risk - over 600% return for the year. I dare a mutual fund to beat that number!
Eagerly awaiting 2007 and the next "GO" signal.
Larry
This is a reply for the post from anonymous Dec. 28 at 3:56.
I pretty much stay with the "x" system. There are times when I get out when the "y" says to exit and no trade. By that time, I have captured some significant points. If there is a slight pullback, I will assume another position and follow the "x" signal.
Think of it like this: If any specific day is going to give you over 80 points, I will usually take it and wait for a pull back to get back in. If I don't feel comfortable doing that, I simply wait for the next signal. I do not randomly get in and out. If you take at least 80 points each time, you are going to bank $400.00 per contract. So, it's no big deal to wait for the next signal. Money in your account is money in the bank. Don't risk it on emotions, wait for the signal.
Hope this helps!
Happy Trading,
Brent
To Kevork:
I would also like a copy of your spreadsheet.
All your help would be very apreciated.
Please mail to: cmrodmail@gmail.com
Larry (Dec 29 9:44am) I'm confused. DT says when the DOW goes up buy the dow; when starts going down SELL the dow. In your post you said you bought a call on a Go Long signal and BOUGHT a put on the Go Short signal. You didn't SELL when it started to go down? I am new to options and would like to understand. Could you explain to me as I am obviously missing something somewhere and would appreciate your help. Thanks so much!
Hey Folks,
Does any one have a site that I can get a "live feed" of the changes in the market? I have seen pices from $4k and $100 a month for this service and am hoping there's better out there.
Basically looking for fluctuations on the DOW in real time.
Can anyone explain this spike 2nd January 2007 President Fords Funeral and market was closed.
http://img520.imageshack.us/my.php?image=dowspikesmallcustomjz6.png
Hey guys I'm a new subscriber and haven't established a position yet, chomping at the bit waiting for a new signal. Pretty much read this whole blog tonight from the beginning, was very informative and insightful. Thinking about mini Dows and staggering exits of a portion of the position thus locking in profit and at the same time practicing money management. Haven't run the traps yet but was considering 6 future contracts putting limit sell/buy on 4 at 30, 50, 70, and 90 respectively moving up/down the scale and let the other two run the gauntlet. Seems you would catch profit from the low end to the high and historically be limited on loss if I understood it correctly. Basically a 66% - 33% division. Like I said haven't run the numbers and I know it's a bit convoluted but the results might be interesting. Hey whether it's Dow futures or betting the NFL it's all about money management. Sure would like to make an entry but you guys squeeze all the $$ you can from this this cycle. Good luck to all and let's have a kick ass 2007.
#1 ? -Does the DJX expire every month or every quarter. Your printed material looks like Mar-Jun-Sep-Dec expiry but when I check the options there is one for each Jan and Feb and Mar. Help. I am new as you no doubt can tell. Beginners need more help than most of those on this site who seem to know what they're doing but more importantly, why they are doing it.
#2 ?: Is this the time to buy in for the first time?
Thanks for your help.
PS I sent in an earlier email but haven't heard back- maybe it was too stupid a question.
I am new to the system. Please throw some light on which broker is good for future trading.Thanks.
Money Management = Position Sizing
According to Dr. Van K. Tharpe, entering a position is far LESS IMPORTANT than using the correct position size and exiting accrding to a plan.
Dr. Tharpe has just published the secoind edition of his famous book, "Trade Your Way to Financial Freedom."
This really is HOW to make money tradiing. I read the first editon twice and I dove into edition two as soon as I got it home.
Here's a link to this book at Amazon
http://tinyurl.com/y6aonk
Since the last GO LONG signal, the mini-DOW is only 29 pts. up as today 1-3-07.
When the signal says "stay long"am I to buy 2 more contracts every day while the signal says "STAY LONG"? 29 pts. isn't a lot. Am I reading this wrong????????????
TN
Seems like a number of people keep asking about brokerage firms. I was with Scott and switched to Interactive Brokers. They have a great TWS platform, you can trade anything you like on most every market in the world. Executions are fast, you get all the trade placing tools you could want, singles, combos, brackets, trailing, conditional and a ton more, took me a month to figure them all out. But here's the best part...they are CHEAP!!! Need I say more?
I keep seeing quite a few very basic questions about eminis and options. Two very good resources for some of this information are the following websites. If you don't know the difference between a call and a put, you must take a look at this free information:
http://www.cme.com/
http://cbot.com/
OMG NO dont open more!!! You stay long means stay in the position meaning although like yesterday with the FOMC minutes the dow dropped massively its only short term so stay long mean the ones you have open from the last signal leave them open.Dont worry about if its only up certain points if you think like that then your not following this system and should just trade your own.
I second Mark's Jan 03 vote for Interactive Brokers. I've been with them for 18 mos and have been very pleased. Their trading programs are very robust, so at first, it looks a bit intimidating for a new trader. But they offer good online reference help and lots of training videos to get you going on the various features for trading futures, options, forex, etc. And they give you a dummy account so you can paper trade to get the hang of their interface. Once you're comfortable, just turn on or off the features, order types, etc that you prefer for a trading environment that's customized for you.
Be aware that there's no-one to call on the phone - it's all online; that's why their transaction rates are cheap. However, they've responded to my emails within a few hours, even when my questions were dumb.
Re charting:
You can chart the $INDU for free on daily charts with Stockcharts:
http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=3&dy=0&id=p91368724497
Or for nice intraday charts you can use Sierra Charting and use IB or other brokers as datafeed. My version of Sierra is about $ 15 a month, IB is free with a certain trade volume, otherwise it's $ 10/month.
http://www.sierrachart.com/
For technical questions like this I suggest you go to the Yahoo group, because you have a much faster response.
On 12/29 Anonymous asks "DT says when the DOW goes up buy the dow; when starts going down SELL the dow. In your post you said you bought a call on a Go Long signal and BOUGHT a put on the Go Short signal. You didn't SELL when it started to go down? I am new to options and would like to understand."
If you buy a CALL (say XYZ 35 2/16), you own the right to buy a share of XYZ for $35 from the person that sold you the call from the time you bought it until it expires on 2/16. If the XYZ goes up to $38, you will make $3 by buying it for $35 from the seller of the call and selling it at the current price. Thus by buying a call, you are betting that the stock will go up.
A PUT is the exact opposite. If you buy an XYZ 35 2/16 put, you own the right to sell a share of XYZ for $35 to the person that sold you the put from the time you bought it until it expires on 2/16. If XYZ goes down, the value of your put will go up because you can buy a share at market price (say $33) and sell it to the person you bought the put from for $35.
Options can be tricky - do your homework and undertand what you're doing and the risks before you jump in.
andy
Thanks poster on 1-4 @ 5:59 AM
Thats what I thought I read but things sometimes become confused.
TN
Hello - I just joined and am very happy I have. Why do you suggest limiting the number of contracts at some point? Is there any reason why they could not be slowly but almost infinitely increased? Thanks. Kevin
I've tried a few trading services, and you guys are #1 in my mind. No ego. No BS. Just great tools and common sense.
One question. I don't see any mention of the Big DOW. Any reason not to trade this instrument?
Thanks for your fabulous service!
Hello,
I'm a new member and hope to make money with this system. Hopefully it will continue to be highly profitable in 2007. So far I have not had much luck with any trading system I have tried, but perhaps I haven't stuck with anything long enough to really evaluate. I plan to be patient with this one for at least 6 months to give it a fair chance, and follow the rules rigidly.
I do have one question about futures. If the market closes due to some major event such as a terrorist attack, the Dow could go down 5-10% without anyone having a chance to exit their position (this seems to be what happened on Sept. 11, 2001 based on looking at charts of the Dow). If you're trading e-mini futures as recommended on this site and you had a long position at the time, you would lose a tremendous amount of money -- it could even wipe out your entire account. So, is it really safe to ever hold a long position in futures, since there is always the possibility of the market being shut down and then reopening with a major gap down?
To avoid this risk, does anyone use futures only for the short trades and use DIA or DDM for the long trades?
As for options, there is less risk of getting wiped out since the loss is limited, but I wonder how they could really be profitable because some trades are held open for a few weeks, so the time decay would eat up most of the profits. Also, the spreads on options are pretty large. I see somebody posted that they had great results backtesting options with this system, but I wonder if the factors I mentioned were taken into account?
Thanks to the owner of this website and to the people who have posted to share ideas and research.
To the January 6th anonymous (from the 2nd January 6th anonymous):
Point taken re: 9/11. I think it's worth noting, however, that, had one gone short the DOW futures first thing on the 17th, one would more than make up for the 9/11 losses in 5 days, and you know what's happened since then.
Bottom line, in my opinion- If your account can't easily absord a 5-10% drop in the DOW, then, definitely don't go long DOW futures. That's simple money management logic. Futures are definitely only for speculative $.
On the other hand, you're missing out on a lot of potential gain if you only short DOW futures. Using System X last year produced a net gain of 2,491 points long and 875 points short. A 10% drop in the DOW tomorrow would represent about half the long gain for the year- certainly a bad day, but the fiscal year still looks pretty good.
I realize that next year will probably not produce similar results, and, perhaps now is a good time to be cautious on the long side anyway. On the other hand, I thought that 6 months ago.
To 'The Compounder'. Your back testing the X signals using calls and puts in lieu of the eminis, did you have/use stops of any kind? If so, please explain the losses you encountered by stopping out along the way, last year. What % or dollar amt. did you use for the stops?
Also, with the possibility of another Sept. 11 type event with regards to always holding over night using the X signals---wouldn't it be safer to go long using calls and short using emimis!?
Anyone have solid input or experience[s] on this way of trading? Thanks much, Skip
To the COMPOUNDER, thanks for the interesting information on the backtesting of the DT signals with the DJX and DIA options for all of 2006. You said you often purchased the least expensive ATM option. Can I assume you always purchased the near month option or did you ever go out 1 or 2 months?
Thanks for the help to this newcomer to DT.
Andy, thank you for your response to my 1/29 question to Larry. Your answer was very clear and informative and I appreciate your taking the time to respond.
Great site; great people.
Mark,
On Jan. 03 your post referenced scaling in your purchases/sales. To make sure I understand your post, are you suggesting that a player buy 2 contracts and leave them active throughout the trade, buy 1 more after a 50 point gain and buy 1 more after each additional 20 point gain until a total of 6 are held; then, scale down according to the same point scale as the market comes down??? Am I anywhere close to what you mean? If not, could you explain in more detail.
Bill
Hi,
I am a very new person to DJIA. I would like to ask the expertise here that why the DJIA's option or the DIAMONDS don't have the option for april, may, june and then don't have for the october and november? How to trade Option for those months? Then why got Q1(March), Q2(June), Q3(September) and Q4(december) and hot to trade them?
Sorry for asking so as I am too new. Please help to reply me. Thank you.
This is for those who spread bet in the UK. I called up worldspread and they have a 6 point spread for a Mar contract. However, if you want a guaranteed stop loss(in case of something similar to 9/11)the spread cost is 9 points. Still highly profitable. World spread have a one point rollover cost on a daily basis. This means that every day you are charged one extra point.You may wish to look into futures contracts?
Hope it helps.
Great System... how about linking up an autotrade with Think or Swim???
Message for VJ......you trade in the uk? i'm currently using a US online trading service and simply transferring money from my english account. When transferring my profits back am i going to get GOT for uk tax? DO you know how i declare it?
Thanks Polly.
Hi
I have a quick question about using e-mini futures. If you have to close your position by the 3rd friday of the contract month what do you do if system x still says to stay long. For example on August 29th system x says go long, it was stay long through october but you have to close your position in september. How do you deal with this problem.
Answering a few questions posed to The Compounder
In my backtests of DIA and DJX I purchased calls or puts 30+ days out.
When the signal changed I sold the existing contract and bought the opposite.
I PRESUMED that the signals would change at least within the time of the contract.
If a "stay" signal persisted longer than my existing contract I would close it at expiration and wait out until the next entry signal - regardless ITM or OTM. It didn't happen, but that's my plan.
I did not insert any stops on the option trades. The dowtrader system covers that (system X has a bult in 1% stop). Adding another stop would probably stop me out too soon. I used strict money management (aka Van K. Tharpe) in determining the size of my trade and I accepted that my losses COULD be as much as the original debit. That never happened.
Money management and position sizing systems protect capital. Also keep in mind that I never had more than a small percentage of my trading capital at risk at any time. I used $500 as a max and I never had that large a debit - subsequently no loss would ever exceed $500.
On one hand I placed 20+ trades at under $500 each - approximately $13,000 in trades. The return was $3,000+, or 23%. In the same way I could say that I actually traded ONLY $500 and netted $3,000 - for a 600% return.
I'm pleased with either interpretaton.
Larry
for all those interested in options try these free sites for options info: www.CBOE.com sponsored by the Chicago Board Options Exchange and www.888options.com sponsored by the Options Industry Council. Both sites are authoritative, free, and "must study" for for anyone considering using options.
Mike G
You 'roll over' your position. In your case if you are long you sell the September contract and at the same time you buy the December contract. Although it expires on the third Friday, you want to check when the volume shifts from the old month to the new month, which is usually on the second Friday. In my Trader Workstation (by IB) I just have the two contracts listed underneath each other, so I can easily compare volume and do the rollover with just two clicks.
Message for Polly,
As I concentrate and spreadbet here in the UK(which I see as tax free from the websites so far) I focus and concentrate here in the UK. Not sure about the tax rules but my interpretation would be that there is no spreadbet in the US. All your profits should be taxable in my opinion. However you need to consult a tax person on this. I prefer sticking to the UK system which is easy to work with and tax free according to my understanding. (Applies only to Spreadbet according to what I know)
Hope that answers your question.
Hello to everyone - I am new to this site (UK based) and just weighing up the pros and cons of buying this system...
It advises 4 main methods of application. But the one the creators use is the Futures Mini, if I recall correctly? Is this tax exempt?
Spread betting is 100% tax exempt in the UK. But which do all you British subscribers tend to use - and why?
I imagine the latter will incur large spreads (twice - when opening and closing!) so maybe not always the best option?
Been looking at the blogs and there seems to be an underlying question that is not getting a response. What do you do if you are holding a position in the E-mini thru the expiration date? Closest answer I've seen is that you "roll" the contract. I know this is a basic question, but it's one that is going unanswered. You might consider adding it to the FAQs.
Just looking at several brokers to trade the Dow mini, some of them provide "Snap shot quotes" for free, and charge for "Streaming Quotes". My question is, do I need streaming quotes to trade this system X, or just go with the snap shot quotes(the free ones). Or can someone explain the differance?
S.F.
I am a new subscriber in the UK. I am starting to trade dow system X using spread betting.Do you recommend rolling or monthly trades and do you place 1% stop loss, which could be triggered intra-day or do you run without the stop and activate manually if triggered 20 minututes before the market closes? Advice from dowtrader would be appreciated
Hello every trader...Joined in early December and very enthusiastic about trading for profit of course....the system is great but I still prefer a little input myself...have just shorted the Dow after a month of long....finance costs have chewed up profits..entered 12445...exit and shorted 12992...good profit less costs...resaon I shorted?...we are about to get a short signal!!!....good trading.
Thanks for the answer to my question about the contract expiring
while the dow trader says "stay long".
Okay, I just started with this system and although I know "emotions" stay out and "system" stays in, I can't help but worry about seeing how the dow dropped so steeply today (1/18/07).
I do want to make sure I traded with the correct ticker symbol. The Dow E-mini right now is: EYMH07. Is that correct. That's what Xpresstrade told me. Please someone confirm my belief in myself that I am actually trading correctly.
THanks,
Scott
Hello,
This blog thing is new to me. I picked up Dow Trader last Sept., but have only just strated to paper trade. Been very busy. Do you only enter a position on a "go long" or "go short" signal? Or, can you enter a position on a hold signal also?
Thanks,
DJ
For those of you who choose to use dia monds options, it is very likely and has happened more than once personally, if dow moves agianst you than retraces back up in the inito a pfofitable trade the options won't increase back to the same level and you will have called the direction right and still lost money.
I have been using Dowtrader for almost 3 months now. I have found a way to get the signals on my Pocket PC. If you download the "opera" operating system, it will display the members area of dowtrader. My husband has downloaded it for me so I'm not sure of all the technical details. I believe Opera cost around $25 to download. I am very pleased to be able to check the indicator while "I'm on the road". Just wanted to share this with all my fellow Dowtraders.
To Scott,
Re: Your January 18 post.
Yes, you are trading the correct contract through XPRESSTRADE. I also use that broker and am very happy with them.
Bill Roberts
For retirment account, there is a settlement of 3 days after closing a position until funds are available to reinvest. One way to avoid these 3 days is to invest in the same fund. For example, invest in RYCVX (+2x) and RYCWX (-2x). When you swap funds before the close, the funds transactions takes place at 10am the next day ( you get the price of the dow then). Has anyone tried that to see the impact in performances trading using the next day at 10am prices ?
Francois
Hi,
I just signed up with the Dow Trader service. The percentage of returns shown on the home page is very impressive. I am going to follow the Dow System X and I hope I can have some good results.
One question for the existing members. What Dow System do you follow? X, Y, Z, or mix? What is your percentage of returns since you joined or for the last year?
Ocean
Anonymous on Dec. 29 asked:
"I am a new subscriber. I just want to know if anybody trade DXD & DDM using the signal."
That's what I'm doing so far -- just started with this system a few weeks ago. DXD and DDM give good leverage but not as much as futures. If this system keeps working as it did in 2006 and I make some money, I may feel confident to switch to the e-mini at some point, but for now I'm using the double-long and double-short Dow ETFs.
Anybody else using these instruments?
Hello traders...my last post should have said shorted ate 12692 and not 12992!!!...anyway...i shorted on the 18th of the month earlier than the signal today...what a diff in profit!...made 149 points profit long and now 120 points short! profit and no finance costs...will let this run fora while and then decide...could drop around 12320....if lower than this....it could be a breakout on the downside...good trading.
I agree with bluffins comments. When selecting an option in the DIA it is very important to consider the Delta, volatility and expiration date. If it is way out of the money it might not move at all. And if the expiration date is less than two or three weeks time might erode its value.
Dear DT (or anyone who knows)
In the online manual is is mentioned that an exit/reverse trade is executed if our fixed 1.0% stop-loss is hit through the IMS move.
Is that 1.0% of the Dow point or what?
Thanks,
Scott
There are many ways the IMS can be traded, as several astute members have noted. The IMS itself is a highly productive tool.
It is spineless to simply dismiss it, on the basis of a couple of trades going against us. One can instead, choose to use it with some added intelligence.
A quick example...
Two members pointed out considering trading only "LONG" IMS opportunities when the 50 Day MA in the Dow is Upwards [as it is now], and IMS rises from below 50.
Similarly, trade only "SHORT" opportunities when the 50 Day MA is moving Downwards, and IMS drops from above 50.
The 50 Day MA is easily accessible from a multitude of websites, so it only requires a little bit of thinking 'upside the box' to put it together and use it productively.
And it works a treat...
Let's look at this closely...
Since January 2006, the 50 Day SMA has had the following three trends:
Jan 01 06 - May 24 06 = Rising
May 24 06 - Aug 16 06 = Falling
Aug 16 06 - Today = Rising
Based on these very simple filters, double check these numbers...
Total # Of Trades Since Jan 06: 23
Total Number Of Winning Trades: 19
Total Number Of Losing Trades: 4
Percentage Winning Trades: 82.6%
Total Number Of Winning Pts: 1959
Total Number Of Losing Pts: 224
Percentate Winning Points: 89.7%
Number Of Pts Net Profit: 1,735
Based On $5 Per Point: $8,675.00
Lets get some ideas - this is meant to be a idea-generating/sharing discussion forum... So, discuss!
I need some constructive member feedback on this...
Just tested the 50 Day MA filter on System X, whereby...
Only trade "LONG" IMS Opportunities if 50 Day MA is moving UP
Only trade "SHORT" IMS Opportunities if 50 Day MA is moving DOWN
The Results [Please do double check these numbers yourself]...
TRADE #01 JAN 03 2006: LONG@ 10847 EXIT@ 10962 RESULT: +115
TRADE #02 JAN 25 2006: LONG@ 10709 EXIT@ 10793 RESULT: +84
TRADE #03 FEB 10 2006: LONG@ 10919 EXIT@ 11069 RESULT: +150
TRADE #04 MAR 06 2006: LONG@ 10958 EXIT@ 11274 RESULT: +316
TRADE #05 MAR 31 2006: LONG@ 11109 EXIT@ 11336 RESULT: +227
TRADE #06 MAY 05 2006: LONG@ 11577 EXIT@ 11642 RESULT: +65
TRADE #07 JUN 05 2006: SHRT@ 11048 EXIT@ 11015 RESULT: +33
TRADE #08 JUN 21 2006: SHRT@ 11079 EXIT@ 11190 RESULT: -111
TRADE #09 JUL 05 2006: SHRT@ 11151 EXIT@ 10799 RESULT: +352
TRADE #10 JUL 28 2006: SHRT@ 11219 EXIT@ 11097 RESULT: +122
TRADE #11 AUG 14 2006: LONG@ 11097 EXIT@ 11297 RESULT: +200
TRADE #12 AUG 29 2006: LONG@ 11369 EXIT@ 11857 RESULT: +488
TRADE #13 OCT 16 2006: LONG@ 11980 EXIT@ 12321 RESULT: +341
TRADE #14 NOV 30 2006: LONG@ 12221 EXIT@ 12315 RESULT: +94
TRADE #15 DEC 15 2006: LONG@ 12445 EXIT@ 12477 RESULT: +32
Total # Trades: 15
Winning Trades: 14
Percentage Winners: 93.33%
Winning Points: 2619
Losing Points: 111
Percentage Winning Points: 95.93%
There is no system change, the IMS and Long/Short triggers remains exactly the same. The only difference is, we use a very simple, longer term trend [50 Day MA] to stay out of Short trades when main trend is Up. And of course, stay out of Long trades when the main trend is down.
Now, I am looking for some feedback here from members...
Firstly, would you like us to 'add' these signals in addition to XYZ? This would certainly add an additional advantage for members.
However, it is preferable to maintain 3 systems.
We suggest removing System Z as most members do not use this and are more focused on X/Y. Instead, we will add the above signal system, possibly call it X-Trend. Let us know what you think.
Yes,My thoughts exactly. Get rid of z and replace it with x-trend and follow the trend. I do all I can to never go against the larger trend.
Hello DT,
I think that adding the new X-trend, and replacing it for the Z system is a good idea. The 50 MA filter would be another confirmation signal. It can provide some peace of mind to conservative traders like myself, who would rather let go a risky winner and wait for a better - safest (if there is such a thing in trading!)- trade.
alcastro
I am all for the new system signal!!!
hi dow trader i agree you should get rid of z and replace it with the 50 day moving average i have been testing your system alongside a 40 day simple moving average with a 200 day sma in the background and it does keep me in the trade and not be fooled by whipsaws in the market.
Dear DT,
Thanks for changing my password to "777." I'm ready for the jackpot. Let's turn this market around and get in the groove.
Warm Regards,
Matt Walsh
Several traders asked about DDM and DXD trading using Proshares vs. using DIA.
I use DDM and DXD and my findings are that you lose several ticks in bid ask spread vs. DIA. When you buy at the opening, its the worst time of day for losing several ticks. DXD has more volume than DDM and thus is not as bad. The best fills come from DIA by far.
i agree with posting the new xtrend fewer trades with a higher winning percentage equals less drawdown on loosing trades
I do believe short trades can still be low risk when price is extended from the s200ma, but underneath a downturning s20ma. In cases like these, I would feel comfortable taking an IMS signal. If these circumstances are not met, then following the trend is a must to increase the long-term odds in my opinion.
DT, re: feedback on your newly proposed 50 Day MA filter on System X...
93% is obviously a far superior return c.t. last year's 71%. However the no. of pips is down when c.t. last year's 3,352. Interesting!
As you know, I am new to IMS, but have to say the solution is obvious: Post both systems. But advise members to up their stakes accordingly, if implementing the lastest modification, i.e.
Fewer trades = fewer pips = less $Return per %. However...
Fewer trades = fewer losses = higher $Return when stake is increased!
Mark (UK).
DT, your new 'X-Trend' would definitely be better for those who choose to spread bet and then compound their winnings. It's a no brainer even for a newbie like myself who asks loadsa questions! :o)
However, speaking of additional questions...
How certain are you that a 50 day MA is THE best figure to use? Could it be back-tested against other xx day MA's and/or even other parameters, as well?
Mark (UK).
Hello, DT. I agree with you, new X-Trend will be helpful in place of Z System.
This system works!!! Be patient and disciplined and you'll make money. Every trade WILL NOT be a winner. Don't worry - things will go your way for the bigger moves.
I like the new "tweak" to the system - the trend is your friend as they say although you still can't agrue with the results without the tweak - they speak for themselves.
I appreciate this site and Dow Trader.
"Vive la Dow Trader!!!"
Completely agree that this would help filter out some choppy trades. There is no doubt that "the trend is your friend". It will produce less trades, but if we can hit at 80-90%, your talking about some very high quality trading opportunities.
Do it!!!
Hi Dow,
Good on you for keeping working on the system. While the 50 day MA is a good indicator, i have read the MACD is more accurate. i can test and report back if worth looking into. Or i am just complicating matters!!!!!!!!!!!! your thoughts
Hello D.T.
I agree that system z showed be replaced by the new system X- Trend.
DT
I think you should replace system z with the new system X Trend.
SF
Hi DT, I agree to get rid of the z system, I like the idea of the x-trend system.
John
Okay - latest news on XTrend... before I go further, just want to thank every member who has taken the time to respond.
The verdict is pretty much unanimous, and we will be going live - hopefully very late tonight or [just called my wife, she is okay with it!] into the weekend, with the xTrend addition.
The old System X will remain of course, so members who want to continue using that, that's fine. System Y will also stay.
Just one [important] point - we mentioned a 50 Day SMA yesterday as the "Master-Trend" [MT] determinant for the xTrend system. It is much better to utilise a 34/55 SMA crossover to determine the MT. This works very well for many professional traders, so why not.
To summarize, xTrend will be added tonight/tomorrow. You will have 3 systems to choose from, as follows...
System 1: xTrend
System 2: xWave (original System X)
System 3: name-undecided (original System Y)
More information/quick-guide on xTrend has been posted at: www.insight.net/xTrend.htm
DT
Bill says
Yes im all for the X-Trend suggestion
To clarify on X Trend....long signals only taken when the 34 sma is above the 55 sma and short signals only taken when 34 is below 55. If true, then long signals given when 34 is below the 55 will subsequently be implemented if/when the crossover happens and vice versa. Correct?
Hi folks,
Just signed up (the cost is low enough to be worth a punt). I'm UK based, so I am interested in who ellse is here in dear old blighty?
What platforms do you use & what methodology do you follow? & last but not least who is making real actual bankable money?
This looks like a lot of fun, inovative & well supported, but the proof of the pudding is in the eating,o holler back any Brits out there.
Looking forward to lots of pips.
Manic.
Just wanted to say thanks to the trader who posted the data on Opera for PDA's on this site. I have been trying to find a way to view the systems with my pocket PC. I have downloaded OPERA MINI. This had allowed me to log on the the DT system ( which is definite progress over Internet Explorer). I cannot navigate to any page other than the X Wave Page, however. Has anyone had this experience or have a solution? Thanks for your input.
If I may just double check something here... X-Trend signalled: "Go Long" this morning (US Time). So should we have actioned a long as soon as we saw this or just waited until the close of trading to see if the signal remains?
Mark (UK).
I have come up with a revision to system xBasic that improves it dramatically. Total cumulative points gained so far with my revised system is 3233 points. The rules of the new system are as follows:
1. When IMS is 30 or lower and begins rising, go long.
2. When IMS is 70 or higher and begins falling, go short.
3. When Dow closes more than 1% in the wrong direction from the entry price, exit the trade (stop loss).
4. Do NOT reverse position when stopped out (unlike system xWave).
5. Stay in the trade until either stopped out or a new signal is issued.
I have created a spreadsheet showing the complete daily results for this revised system, which I am going to email to the owner of this website. As I said, it produces a cumulative point gain of 3233, which is much better than the current system xBasic. In fact, in terms of highest amount of points gained overall, this new system is the best one discovered so far (as far as I know).
I would suggest replacing the current system xBasic with this revised version (about a 500 point improvement!), or else offering both of them.
All,
How many are using DIA against the mini Dow? I am using a simulator right now (simulator.investopedia.com) and unfortunatly it does not allow the trading of futures.
Your feedback is appreciated.
Brian
DT,
Whoever made the suggestion about the tweak to the xBasic system I think is right on. I've verified the numbers/trades myself and it seems to me to be exactly the change to make.
When you stop out get out until the next signal. That makes good sense and frankly what a stop really is for. So my opinion is to make the change.
xStop has now been added, which now completes the final of the four trading ideas/strategies based on the core IMS indicator.
Full step-by-step details at: www.insight.net/xStop.htm
This is an outstanding idea/strategy originally suggested by member Eric... There are five simple rules which ensures we stay in a trade despite minor fluctuations in the IMS.
We only ever exit at a loss if the Dow closes 1% below the entry, otherwise we ride the full rally [long] or decline [short].
The strategy therefore provides significant 'single-trade' profits: +253pts, +316pts, +227pts, +544pts, +420pts, +824pts (!), etc.
Full performance record is published at: www.insight.net/performance.htm
So can someone confirm, regarding "XSTOP" system do we set an automatic 1% stop ie when hit at anytime during a trading day we would then be exited.
Jim UK
Hi
I love this system. I live in Toronto (NY time) and wonder if others have this same question. The DJ trades about 22 hrs/day ( not sure about the weekends). The last signal we get is the 16:00 signal and I believe that the next signal is about 10:10 am (NY time). Could we get an update to the signal about 7 or 8 am for those who may be away from there connection for the morning or all day for that matter.
Also, if anyone has more info on the DJ access via the personal pc. I would love to hear what they have set up
Keep up the great work...Paul
Hi
I am a new subscriber to the dow trader and based in the U.K. I would like to ask everyone. what Avice they could give me on how to trade the dow?
Ricky shah
Hi there,
Recently joined and wondering if anyone is using spread betting to make money. Any advice?
Has anybody got any inforamtion of trading an index (such as the FTSE) which follows the dow. Perhaps this could be more profitable??? Has any one calculated the figures?
Good Luck everyone,
OJ
Wales, UK
Hello all,
New to DT...
I'm trying to figure a spreadsheet in excel so I can track the current 4 systems (now with the X-stop) as a simulation of sorts.
I'm trading a single contract right now (with X-stop) but I would like to have a parrallel performance table for the other systems as they trade real time (forward testing).
I want to diversify my trades through all 4 current systems to mitigate losses & would love to have a nice excel template to plot the current performance from the other 3 main systems (along side what I'm actually trading)...simply for comparisons sake.
Cheers...
Sharon.
Hello,
I've read through the majority of posts here and I am left with one question (for the time being)... what has been the largest drawdown (intraday)? This will help me decide how large an account I'll need to start.
thanks,
Elle
For all those new subscribers trading here in the UK. If you follow one of the systems, you will have to be very firm with the approach and system you have chosen from the DOW TRADER.
I follow one system and that is it. I don't trade the FTSE or any others(thought I am closely looking at DAX). Only spreadbet.
As the Dow trader says look at the bigger picture and have a risk strategy and money management system in place.
I like worldspread. At present I take a futures contract and that is it. No cash rolling which I used to do in the past.
If you look at previous posts, there is a lot we can learn from.
I hope this helps.
Can anyone recommend a broker based in the UK who can place and short/long/exit the trades? Thank you. Frank
I’m a little confused about the discord between the 24 hour globex market figures & the actual NYSE DOW figures with respect to Expresstrade quote prices...
Can someone shed some light on the alignment or differential bewteen them & how one keeps the other in check (or how one throws the other off).
Cheers
Hi Guys,
I am totally new to trading the eminis. However, I have been trading options for quite some time now. My question is does interactive brokers allow trading of the emini if yeas what ticker do we buy it at is it YM? Does emini work in such a way that if the dowtrader system says go long we simply buy and if it says go short we sell? Lastly, how much does it cost to trade one contract of the mini under ticker YM (if this is the right ticker). Thanks!
Regards,
The13th
As we all know, there are price differences bewteen the official open/close of the NYSE DOW & the CBOT GLOBEX, but I was surprised to receive this from expresstrade:
"While I do not have a official answer for you, I have called the Exchange to confirm my theory, however at the moment they have not called me back. How our price is settled is as follows. We use the open and close of the DOW that is reported on the close of the Pit traded session. And it is possible that the GLOBEX uses a different closing price. Technically the E-mini uses its own prices and can differ from the underlying contract because it is independent and trades longer hours. Normally speaking any move in the big contracts will be reflected in the minis but sometimes prices will be slightly different."
There was an Expresstrade premium of about 32 points over the street close price at around 16:00EST.
Can anyone speak to this & offer any advice on how the GLOBEX plays any real factor (especially over the weekend) & why overnight trading adjustments to contract values should be ignored. I'm just very curious how people negotiate this with respect to DT (as I'm still a new DT trader).
Thanks a bunch...Cheers!
Great service and trading system...the new xtrend is the best for safe trading
To Anonymous January 29, 2007 11:03 AM, I'm also using Opera mini but with cell phone. Just want to confirm that I can't navigate to any other page than XWave also. Hope someone can chime in with solution...
Hello to all,
I am new to the DowTrader and very excited about what seems like the perfect system. I am trading the diamonds options and need recomendations on which strike and month contracts to use. I would appreciate any and all advice.
jim
Is Insight going to offer an autotrading system through a broker? If yes, which one?
I often cannot be in front of my computer at the specified times.
No offence to all the people who ask really ovbious questions like recommend a broker, or what is the ticket symbol for the emini....use some common sense people, do your research, it's not rocket science to google these questions.
These are knowledgeable people who designed this trading method/website, it's disrespecting them (not to mention time wasting) to ask such stupid questions.
Anybody has any idea why there was no update on the IMS and DJ chart on 19 Feb 2007?
You can determine the maximum drawdown by looking through each system's trades. Simply follow a long or short trade through until there is an exit or reversal signal and that should provide you with the max drawdown per system over the desired time frame - Remember that in the regular Dow, each point is worth $10 and in the Mini Dow, each point is worth $5 when trading one contract. Hope this helps. And let's please not call each other's comments or questions stupid. The more comments the better since we all learn from each other and we certainly don't want to keep anyone from asking or contributing because they might be afraid of being called stupid...Thank you.
President's Day in the States means markets weren't trading on the 19th.
The reason there was no updated info for Feb 19 is because the stock market was closed for President's day. Here is a link to the New York Stock Exchange that shows the holidays they observe.
http://www.nyse.com/Frameset.html?nyseref=http%3A//www.nyse.com/&displayPage=/about/1022963613686.html?sa_campaign=/internal_ads/callouts/holidaysandhours
Has anyone used this system to trade the 2 beta index fund with Profunds
Hello DT,
I'm a new subscriber.
The Dow Stock Charts is cool!
Wonder if it is too much to ask for the server to remember the last chart settings? This feature is obviously for members only.
Thanks DT.
Allan
Re: Fridays closing data is incorrect - we are looking at the data issue very closely, and will resolve this today - this is a rare occurrence, the first time this has happened and we are waiting to hear from our index data supplier to resolve this quickly.
Please rest assured the IMS is NOT affected, because the raw data to construct the IMS is taken from the raw constituent stock data itself. This is simply a Dow OHLC data receipt error and does not affect the IMS signal.
Kind regards, DT
DT,
Thanks for the update and fix on the closing data numbers. The quick respose is appreciated.
Dave Robinson
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