Ménage à trois Trading System

This chart looks a little different then what normally gets posted here. The idea is to make this trading system as simple and understandable as is practicable, so BWT, FBS and EW were removed, leaving the only two inputs necessary, the hourly TZA candles with their ATR line.

Please click on the image above in a new window or an adjoining tab, so that you can cleary examine the nature of the beast and get a feel for what will be going on going forward.

Once you have taken a good close look at this chart, then do the exact same exercise with the chart below:



This is the exact same set-up, only on three different time frames, 240, 60 and 15 minutes. In other words, the middle chart is in fact the same chart that was presented first above. The larger the time frame, the fewer the signals, i.e. less sensitive triggering of signals which can be either good or bad depending on the character of current market conditions. The 15 minute time frame will trade more often then the 60 minute and the 60 minute will trade more often then the 240 minute.

In the long run, no one time frame should net significantly more then another time frame. So why not just stick with one time frame to be consistent with the simplicty theme?

(1) Those who like clean simple systems can still pick one time frame and ignore the rest;

(2) But this way those who like to anticipate signals, trigger happy types, can use a smaller time frame as a kind of foreplay;

(3) Or, do 1/3 of the trade in the smaller time frame, add 1/3 as the next time frame triggers and throw in the final 1/3 when all time frames are in sync, our Ménage à trois.

After doing a cursory look-back over several months, I would expect about a 65% win ratio, but with much larger wins then losses. In fact, an average trade, including all wins and all losses, should come in about 2.5%, with about 1.3 trades per day. If you do the math, you come up with an insane average monthly return, so this methodology probably isn't nearly as good as it seems and even if it were, why would some guy just give it away on the Internet?

Which brings me to my final observation. I will be trading this with my own personal funds, because it is easy and appears very lucrative. In addition, I'll do my best to post the Ménage à trois in a timely manner throughout the day. But, I can get bored, or irresponsible, or pissed about a Red Wing game, or I can just screw-up in unimaginable ways, so as it is said, be careful what you ask for.

Finally, lets make this a collaborative effort. If you have an idea that might improve the results or implementation of the system, post it for all to see. I'll be running the system in a back test and looking for red flags or nuances that may be helpful, but if a dozen of us ran the numbers and analysis, its all the more likely that something good this way comes.


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