Tuesday, June 30, 2009

Intraday Renko & Blue Wave Signals

This is what a combination of Blue Wave trading off of a Renko 30 minute SPX chart looks like, real time, real prices as of 11:15 (Pacific) today:


Note how Monday's rally morphed into Tuesday's decline with the above-referenced signals catching much of both swings.

That's all for now as I continue to study this new model with increasing levels of confidence and respect.


A

7 comments:

SM said...

Hi Allan,
Can you pls clarify, i know you did earlier but i am a little unsure, about the renko settings you are using in this chart (atr(14) or unitprice) ? Also, usually renko spits out a buy/sell indication on the chart by default - have you turned that off and are using the blue wave indicators on this chart ?

thanks for all you do,
SM

Yash said...

Allan:
Would it be possible for you to post the matching candle chart for comparison.

Anonymous said...

This is getting real interesting. I think we have something here. If you google "Renko Charts" you will note that there are almost no books on this charting technique. In fact, there are only four responses on point. When was the last time you Googled anything and got only four relevant responses? There is almost NO source information. That spells opportunity.

Steve Nison, author of the classic, Japanese Candlesticks Charting Techniques, has a book that includes Renko, but the absence of materials on the subject is amazing considering these are simply charts based on price with no time component.

How can this be? There is more material for trading based on Astrology than there is based on a price only charting system like Renko. I ordered the Nison book and will report back if it is useful.

Smiddywesson

David said...

I agree. If the rest of the herd knows nothing of this technique then there could well be opportunity here.

Anonymous said...

Calm down guys a hedge fund where I worked put a million bucks into developing a strategy around this technique and the end result was no quantifiable edge. Sorry guys there is no such thing as a new idea in trading.

Chet

Allan said...

Chet,

I am using a combination of Renko and/or 3-line break charts with Blue Wave's Trend Model. Are you saying that is the technique your guys tried, or was it merely the charting technique?

My hypothesis is that integrating a rule-based trend following model (in this case Blue Wave) with one or both of these charting techniques yields superior results then integration with bar charts.

I ventured into the realm of real time real money trading today with my technique, with stellar results. Either they were random (possible) or by design (probable).

We need to kick these tires....because they are there.

A

Anonymous said...

I can't agree with Chet on this one. Although I'd have to admit that the history of trading does "rhyme" (to borrow from Twain, who was a horrible trader by the way), it is one of the few areas where the important things, LIKE WHAT WORKS, change all the time.

The fact that a hedge fund tried to develop something here doesn't bother me either. Their style of trading is very different than that of an individual trader because of the scale. Many of them over-relied on mean revision because their quant models left no room for discretionary trading. We are not bound by their limitations, so we did not bust like a lot of them did when the game changed.

Hedge funds are in no position to preach about what works and what doesn't after their recent performance. A lot of people learned the hard way that affording too much reverence to what a hedge manager thought could be very costly.

Smiddywesson