Mach-Trend Platinum Pro indicator and trading system for Tradestation
Mach-Trend Platinum Pro is an easy to use trading strategy that is compatable with Tradestation and stays on trends longer
This indicator for Tradestation can deliver very high risk reward ratios due to its resistance to be shaken out of an established trend without a valid reason
Video of Mach-Trend platinum pro locking onto some nice trends. Shown on speeded up daily data
Smooth trending stocks like this are not easily found so creating scanners to find them is well worth it. Trading systems matched to markets bring better results.
The large risk v reward ratios are demonstrated with the two biggest wins. Note how the ugly price action in the mid trend does not reverse the trading system
Mach-Trend Platinum pro shown below with length 50 on GC
Gold futures 15 minutes
The indicator plot changes colour when the trend changes which give
you a clear to understand signal. Settings for the strategy much be
identical to match the indicator.
Please visit the product guide above if you require this
for a different platform.
Introduction and concepts of the Mach-Trend Platinum Pro strategy and indicator for Tradestation
This product does not fit into a
"category" like other indicators do. The algorithm behind it is
highly efficient at calling the trends. Very robust and solid
product.
Features of this trading system: What is a trading
system?
This is a method of having your trading decisions
made for you. It can operate manually as you copy the trades, or
automatically if you connect to an online broker and enable
autotrading.
Features of this product and what
they do
Length
This controls the period used by the central algorithm.
Shorter values produce more trades and longer periods increase the
frequency between trades.
Delay
This adds a "margin of nothingness" to reduce frequency of
trades. If you imagine it like an examination pass rate being 60%
under normal rules. If delay is 4 then the pass rate becomes 64%
which makes it harder to pass the exam or in this analogy it makes
it harder to change the trend from up to down and vice versa.
TradeLong - TradeShort
The default setting is 1 which means if both are set to 1 it
will take long and short trades. If TradeShort is set to 0 it will
only take long trades.
Skew direction
This setting is used to favour a particular direction to make it
easier or harder to take a long or short trade. EG it distorts the
trend with a bias.
If you set skew to -3 it will go long much easier and
it will be very slow to enter a short trade. Suggested for bull
markets in strong up trends.
It is advised to keep these
values to 4 or less with lengths > 30 and 3 or less with lengths of
30 - 60 and 1 or less when length is over 60. To clarify short
lengths can use bigger skew values and longer lengths need smaller
skews.
Screenshot below top image = skew-3 middle image = skew
0 and bottom image is skew +3 notice the top image gets long faster.
Skew =3 goes short easier than long.
To explain this setting better we use the analogy of a strategy that
goes long on a 50 bar high but only a 20 bar low to go short ( short
bias )
Skew =0
gives an equal
bias to long and short
Skew =-3
To explain this setting better we use the analogy of a strategy that
goes long on a 20 bar high but needs a 50 bar low to go short ( long
bias )
This is for those
huge moves when being short of a market which is going into
capitulation. If there is just 5% of its value left Mach-Trend
will exit the short position. Eg If you place the short at 100, the
trade will exit at 5. If it is not engaged by setting to 0, then
it will stay in the short trade until the trend changes.
Exit on session close
Using this setting ticked is going to close out trades at the
end of each day. Doing this will make drastic differences to end
results. Cutting potential risk and potential gains. This
feature is part of Tradestation rather than Mach-Trend Platinum
Pro, it is mentioned because of its importance. Many traders do
not like holding trades overnight, usually the reason is that they
cant sleep with a big trade. The solution is to reduce trade size to
a level that is comfortable or find markets with a smaller deal
size.
Timeframes
Mach-Trend Platinum Pro can be used on any time frame. Settings also
influence results for example, if
you used it will length 30 on a 15 minute chart, it will generate a
similar amount of trades as it would if you used it at length 10 on
a hourly chart.
How does Mach-Trend Platinum Pro indicator and strategy for
Tradestation behave on "ordinary" markets?
Mach-Trend is a very clever
system which when applied to dull markets generally behaves itself
very well.
However a trader must understand that to achieve
exceptional ratios, one will do much better by seeking exceptional
markets to apply this systems to.
I have always tried very
hard to explain the importance of market selection as it is of
paramount importance to get good results, many people with
intelligence bordering on the genius level have not understood me on
this point, and the more I think about it the more incredulous it
seems.
A word of advice: To catch more fish, go where the
fish are. To catch more trends, go where the trends are.
What markets can Mach-Trend Platinum Pro be used
with?
This product works on Forex, Futures, Stocks, Cryptocurrencies, Indices, Bonds and any
other market that has a price you can display in the Tradestation
platform
The shot below shows the method of colours used to make
Mach-Trend Platinum Pro operate as a paint bar study.
The enemy of trading systems is often caused by commission
costs caused by high frequency over trading
Frequency = F
By reducing F by such a huge amount, traders can now enjoy
the luxury of making money for themselves instead of just making
their brokers richer with commissions from over frequent trading
systems. This statement is particularly true of day traders of
futures markets.
It is a horrible fact that brokers grab
roughly half the value of your account each year in costs.
Mach trend will be able to save your account going the same way as
90% of losing traders.
It is widely know that 90% of traders
lose money
Mach trend is here to help you change that
horrific statistic.
The black hole in the image below is used
as an analogy of a trading account caused by commission costs.
After
setting up on the chart and adding the strategy, it is time to do
some study.
A good place to start is to run optimizations on
the length.
If the top performing length is 54 then you can
repeat the optimization with lengths from 34 to 64 and then also add
the delay feature to the optimization with values from 0 to 10.
Then if you get the best result with length 48 and delay 4 you
can repeat again and this time add the skew factor.
EG Length
48 can be set to 44 to 52 Delay setting from 2 to 6 Finally
add in the optimization of skew from -6 to + 6
This manner
of optimizing avoids the bad practice of curve fitting as you are
growing on solid ground rather than finding a flukey result.
How to be a better trader by testing
Calculate on bar close = True ( typo corrected ) Mach-Trend is
designed to signal no more than once bar bar as its for catching the
big moves and not focused on little moves.
This page link below.
You can work through the steps shown on this page to find robust
settings.
On this page (for
advanced users only) is an in depth method to check a symbol and
instrument and strategy combination for robustness showing how
to test a trading system
Concepts behind Mach-Trend Platinum
Pro
I am sure most of
you will agree with this comment, but please correct me if I am wrong.
The single most annoying factor about trend following is the
scenario below...
Our trend system signals a buy, so we buy, up
she goes and we move up our stops to lock in the big gains and we feel
happy that the trend will go much higher, then the uptrend makes a
sudden larger than usual deflection and takes out the stop making us
short.
The trend then begins up
again and our short stop gets hit with a small but highly annoying
loser, and we go long again making another nice profit. The "pig in the
middle short trade" may have reduced the profit overall taken out of
this difficult up trend by as much as 50%.
How many times does this happen to people?
Very often I am certain. I don't know about you, but with me it becomes
my mission in life to figure of different ways to remove the "pig in the
middle" short trade from an otherwise "nice trend".
We have all
doubtless experienced this situation many times and this is known as a
"whipsaw trade". The usual response by the trader is to use slower
systems and wider stops to give trades more space to breath. Or
sometimes the trader will speed up his model to try and catch every
little twist and turn, which results in a commission eating demon system
which just over trades and makes the brokers richer.
A
conversation with Ed Seykota about this dilemma spawned his memorable
comment, "To prevent whipsaws, stop trading"
Reading between the
lines of this comment, what he meant to say was he has had this problem
many times, and nothing can be done about other than to stop trading
altogether.
Whilst this statement is very valid, in the sense
that killing off whipsaw completely is virtually impossible, there are
many things we can do to reduce whipsaws. Mach-Trend is designed with
this task in mind, often it reduces whipsaws as much as 30% and in
certain nice trending markets it can achieve a 100% whipsaw reduction..
Rather than just slowing down a system, today's super fast computing
speed enables us to make millions of calculations in the background, so
putting this new found technology to good use Mach-Trend has reduced the
problem considerably.
How does it work?
Mach-Trend
first of all is monitoring a special trend algorithm and monitoring the
urgency of the price action within the trend. In simple terms it is
constantly buzzing away asking "Is this reversal going anywhere, is it
serious". Its job is to follow instructions to stay on board the trend
unless something really gives it hard evidence to reverse its position.
The key is to use intelligence in the code, instead of just making
it desensitized to small movements. It has some real difference to the
usual filters and is very robust in all market conditions.
