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    CT Journals

    TradeStation

December 20, 2021

iCahn Day Trade Stock Index Futures

%BB Dynamic Breakout and Reversal

The development of a trading system first considers its time horizon

Since the strategy %BB-DBR is day trading then by definition, it must exit on or before the end of the day. This is a key to understanding how and why day traders do and act as they do because they must be correct for a limited period, not days weeks months but within hours.

With that being the case our job is to find a pattern that will become profitable by the end of the day. A traditional day trading system is looking for a setup leading to what is called a range day. That is a trading day that opens near its low closes at or near its high and the system takes the trader long. It does not matter what kind of entry, it could be a breakout or a reversal.

So, if the market opens and declines from the open, a reversal pattern takes the systems shortly, and prices closed at the low of the days is the ideal pattern. Therefore, when the developer finds a pattern that is profitable with good risk to reward ratios without the constraints of money stops, he has a technically sound strategy. That is one that tells him he is PROBABLY correct by the end of the day his position will become profitable.

Here is an example of a breakout that closes at the end of that day at the high of its range. The open was near the low of that day’s range, followed by a breakout and the exit MOC.

The efficacy of entry is just another way of pointing out how much the position had to go underwater before it became profitable. Some trades are perfect getting in at the low and out at the high; some never go underwater, others are less efficient and do go underwater before going profitable or going out for a loss.

Money Stops put first in trading development is the opposite approach. The developer uses an arbitrary money profit target and a money stop-loss that fits his account size first and from that basis searches for a valid trading strategy that is profitable.

With our approach, the money stops, or percent stops are brought into the systems AFTER we have a profitable system – the money stops are brought in like an envelope.

Refer to our text on money stops, link here. One of the critical elements that a successful trader needs to get their head around is the difference between money and price. Money management is not the same thing as risk management. This is not a little point that is squabble about.

You cannot make a good money management program and apply it to a bad trading system and make it better. NO MATTER HOW GOOD THE MONEY MANAGEMENT METHOD.

You can take a good money management strategy and apply it to good trading systems and make it better. Money management is about how much the trader should risk and money stops (both loss and profit). The size of your trading position is in direct proportion to the value of your portfolio.

The rule you hear about being chased by the vast majority is the 1% rule to use a stop that is equal to 1% of your account size on the trade. The market could care less.

Risk management is nothing to do with stop losses or anything relative to account size and from our school of thought nothing to do with the trade by trade p&l – based on neither real nor hypothetical trades. Fancy algorithms based on the trailing P&L are just elaborate ways of chasing the equity curve.

Proper risk management is based on price; it answers the questions should I or should I not take a risk. Our systems have a risk management formula built-in, and we use the same model as a governor for opportunity management. See 14-page User Doc, with rental or purchase.

You can download the TradeStation Reports here, be sure to check out the amount used for slippage. 
Three Months for the Price of One, only $119.00 with the right to own outright GFE for half price of $2,495.00 before your three month period ends



 

Do you like to hack around in concept idea code, systems, and indicators from my library over 20 years of development?  Look at this holiday offer on over 1000 strategies and 1000 indicators.

 

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker since 1989,
Copyright 1989-2021

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
92264 USA. 760-459-4681 OR

25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its client’s trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

— Pricing is subject to change without notice. My indicators and strategies can be withdrawn for private use without notice at any time.

–Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options

November 6, 2021

iCahn Scalp the Stock Index Futures

iCahn Scalp is a simple trend following system that takes advantage of a high rate of change market. Obviously, these forceful trends do not happen every day. CT developed back in 2011 a volatility matrix that signals market context, as in when to expect a forceful trend. It is not a disclaimer to say its not perfect, but it does increase your odds of success; and my best team is always working toward perfect.

CT does not suggest fooling around with inputs except the ones that impact contract sizing. This is based on Richard Dennis’s Turtle contract sizing strategy, but macro filtered by the above-mentioned Technical Event Matrix.

To turn off contract sizing set Agro to “False” and to set the number of contracts you want to trade, input that number at mini-contracts.”

When Agro is set to “True” after a winning trade the next trade will be increased by the number of contracts in the AgroUp field, after a loser, it will revert to the min contracts when AgroDn is set to -1. MaxContracts should be self-explanatory and adjusted for your contract size and risk profile.

Keep in mind that with Turtle contract sizing (Agro) set to true, it does not come into play unless a favorable market condition exists. Below you will see RuleToAgro inputs, where 2 and 4 are inputted. These two Macro conditions are supportive of breakout expansion and forceful trend markets.

Whereas Rule2Block is after a rule number 3 is signals which calls for a low energy, low volatility market independent of direction.  If the market has signaled a rule number 1, only minum number of contracts are allowed to be traded. The idea is clear. As in everyday life and business, 80% of your productivity and profits come from 20% of your activity. This is what the Macro filter is striving for and achievable to increase your odds of success.

Download New Performance Reports here from dropbox for your cross-check.

Backdrop and user videos from this web page.

Do you like to hack around in concept idea code, systems, and indicators from my library over 20 years of development?  Look at this holiday offer on over 1000 strategies and 1000 indicators.

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker since 1989,
Copyright 1989-2021

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
92264 USA. 760-459-4681 OR

25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its client’s trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

— Pricing is subject to change without notice. My indicators and strategies can be withdrawn for private use without notice at any time.

–Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options

April 15, 2021

Trading Market Volatility

It is all about timing market dynamics.

%C is a proprietary indicator I created in the late ’90s as a setup to increase the odds of successful breakout trading. In the early part of the second decade of the new millennium, I created a historical measure of volatility that can predict the force of a move – direction neutral. Furthermore, when combined with %C (no longer free at the app store) into a four extreme matrix it provided more reliable information about pending changes of market conditions or dynamics.

All of which has to lead to the discovery, methods, and better use of this matrix as well as applying it to CBOE’s implied volatility to achieve Alpha.

The following is about one of our long volatility systems – iCahn Hedge; and why we feel it can be used as more than a robust day in day out trading systems but be used with outside timing rules, to avoid risk and enhance opportunity.

The easy way to describe the opposition to new ideas and change is how the idea of robust trading ideas like buy dips is so difficult to contradict. Because they work most of the time, but it is the aberrations that will bite you, and you miss opportunities.

It is the aberrations that are of interest here.

But if you have learned anything from studying and trading the market, is you know that declines come and go, and their velocity and rate of change are faster than the advances.

There should be no question that good traders and sophisticated capital managers take advantage of the available products, given the massive volume.

No matter if you are a system trader using a robust strategy trading for a daily average or use your own forecast methods and apply a trading plan, you can take advantage of long volatility trading while reducing risk.

There are two ways to take advantage of the spikes in volatility the market has every year, and in some years, they are monsters.  Trade like any other robust system, for the average trade only becoming aggressive when VX spikes. Or use rules of engagement to turn status on for the system.

iCahn Hedge system – has a Macro filter built-in and therefore misses a few trades playing defense. Every trade in the past year made $142,984.00 or made 35% on a $400k account, funded at six times max drawdown. A reasonable hedge against the average bear market, which is 36%.

This system among others is going onto the TradeStation Secure Server to be available via the TradingApp® Store. Our TEM set of indicators are uploaded now and the Tidal Wave two-week swing trader is available via this link.

Please be advised.

“As always when reviewing past performance of any nature, real-time executed or simulated, nothing can assure the outcome in the future will be the same or similar, even in the face of the most stringent testing methods.”

Taking every trade over the last 11 years long, only VX futures has good risk-reward numbers getting a high amount of slippage, which equaled $223,000, no including commissions. Sustaining a profit factor of 1.61 and an average win/loss ratio of 1.74. Both providing more than an adequate edge.


To assist traders and professional hedge fund managers, the Technical Event Matrix is provided to help you see the setups before the big breakouts in volatility. The worksheet below is just one example, and these two windows are included with the @VX strategy window on the same TradeStation™ page.

As part of our pursuit of excellence for our traders and capital managers, TMT’s publishing partner “Contrary Thinker” sents all of its clients with or without TradeStation, its MarkertMap-2021 with cycle timing Volaltity reports for market dynamics timing advisory.

Both provide more than an opinion about markets but insights into how the tools from TEM to all of our proprietary indicators are used and what they say.

Great and Many Thanks,

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2021

Capital Managers and Professional Investment Advisors visit www.ContraryThinker.com.

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 800-618-3820 or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its client’s trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

— Pricing is subject to change without notice.  My indicators and strategies can be withdrawn for private use without notice at any time.

— Contrary Thinker does not refund policy; all sales are the finale.

Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options.

NO WARRANTY / NO REFUND. Contrary Thinker   MAKES NO WARRANTIES, EXPRESS OR IMPLIED, On ITS PRODUCTS AND At this moment EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL CBI BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THE PERFORMANCE OR USE OF ANY PORTION OF ITS PRODUCTS.

Keep ahead of the Mob today invest in the new bull market of Contrary Thinking. 
MarketMap-2021 Annual Scenario Planner provides historical parallelism based on 160 years of data, repetitive extra market events and their effect on markets, tidal cycles peaks and lows, market cycles for predicting time frames for lows, and astrological cycles to isolate cresting cycles. 
Volatility Reports fine-tunes MarektMap’s longer-term scenario planner for the implementation of hedges and long positions. The research publication uses advanced price-based systems buy and short bias signals, traditional Technical Analysis, and new volatility modeling for market dynamics timing, including sectors and newer ETFs.
Both publications share curated news media to add backstories that fit with the ongoing market-based research. 

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker since 1989,
Copyright 1989-2020

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
92264 USA. 760-459-4681 OR

25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its clients’ trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

— Pricing is subject to change without notice. My indicators and strategies can be withdrawn for private use without notice at any time.

–Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options

 

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