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Are you looking to refine your trading skills and deepen your understanding of systematic trading? The Owl Bundle User Group (OBUG) is a community of dedicated traders focused on analyzing and implementing trading systems based on the teachings of Dr. Ken Long. Our weekly meetings provide a collaborative environment where members actively backtest, review, and optimize strategies that Dr. Ken Long developed, adding new layers of insight to these proven methods.
Do you follow Dr. Ken Long’s trading methodologies and wish to collaborate with like-minded individuals? Look no further! The Owl Bundle User Group (OBUG) is the community for you. Our weekly meetings are dedicated to dissecting market trends, optimizing trading strategies, and sharing valuable insights to help you navigate the complexities of trading. We focus on developing and refining trading systems using EdgeRater for rigorous backtesting , optimization, and multifactor and Monte Carlo analysis.
The Owl Bundle User Group (OBUG) is a vibrant community of enthusiastic traders who diligently follow Dr. Ken Long’s trading methodologies. We gather weekly to dissect market trends, optimize trading strategies, and share valuable insights that help us navigate the complexities of trading. Here’s a snapshot of what our typical meetings entail and why you might want to join our dynamic group.. Use of EdgeRater and Thinkorswim in trading Dr Ken Long's trading methodologies.
By using the fractal relationships of the 10, 30, 90, and 270-period linear regression lines we get a view of how market participants on different timeframes with very different agendas are interpreting price action. We also can start to get a feel of the breath of the market’s cycles of expansion and contractions and how the extreme conditions of large stretches and tight pinches of the regression lines can alert us to the potential of some fantastic opportunities.
The next indicator we can add to our toolkit is the 30-Period Linear Regression Line, aka the “RL30”. As would be expected, the RL30 is similar to the RL10 but is based on 30 periods of price data. This makes it three times slower than our RL10 indicator. A simple difference, but the implications and uses of this simple change shouldn’t be underestimated.
This is precisely what we do in the Owl Group following Dr. Ken Long’s style of trading when we use the 10-Period Linear Regression Line (dubbed the “RL10” for brevity’s sake). We know we’re going to be susceptible to all sorts of heuristics and biases in analyzing price information, so why not have a highly effective and efficient and robust single indicator we can apply to any timeframe and financial instrument.
What differentiates our study group is the development of Swing trading systems based on Dr. Ken Long's strategies and techniques. Leveraging the robust platform of EdgeRater, we meticulously refine strategies aligned with Dr. Long's principles. This focus is intended to equip our members with knowledge to compete in the markets.
When considering a change of profession to become a full-time market trader, there are numerous planning considerations that a working professional should take into account: Assess Your Passion for Trading: Famous traders often emphasize the importance of having a strong passion for the markets. Without it, the daily grind of trading can become burdensome. Educate Yourself: Before making the transition, it's crucial to educate yourself about different trading strategies, financial instruments, and market behavior. Financial Cushion: Ensure you have enough savings to support yourself during the initial phase where you might not make a profit. Risk Management: Understand and apply risk management techniques. Never risk more than you can afford to lose on a single trade. Develop a Trading Plan: A well-thought-out trading plan is vital. This should include your strategy, risk tolerance, and goals.
The first task of technical analysis is to identify trends in market price movements. The second task is to identify turning points. Technical Analysis focuses on trend detection because whatever has been happening in the past tends to continue happening. As Tony Sagami puts it, "…trends in motion tend to keep moving until they’ve run their course." In the markets, trends continue until there is a shift in the expectations of the market participants. That is when identifying turning points becomes important.
In the art of trading, self-discipline is the key to success. Drawing inspiration from the Monkey King and Guanyin, we can learn to emphasize the importance of a concise trading plan, trading in sample sets, and maintaining a meticulous trade journal. Like mastering any craft, trading requires continuous improvement and a commitment to self-discipline. By measuring progress against personal goals and staying true to a well-defined plan, traders can navigate the market with the skill and finesse of the Monkey King himself.
Knowing we were in a downward-trending market gave us an additional edge and a higher probability of the trade working in our favor. The main takeaway from appreciating the value of variation in market data is to be aware of the fluctuations in the overall market, have a reliable method to gauge and measure these variations, and develop a systematic approach to exploit them. By incorporating these principles into their trading strategies, traders can position themselves to capitalize on the dynamic nature of the market and potentially achieve more favorable trading outcomes.
The Owl Bundle User Group has recently started to use the EdgeRater tool to compare various trading strategies and deterimine their respective edges. EdgeRater is a versatile software application that scans for trading opportunities, conducts strategy backtesting, enables in-depth chart analysis, optimizes rule parameters, performs Monte Carlo analysis, and conducts multi-factor analysis. This article delves into this collaboration and explores the capabilities of the EdgeRater tool through the lens of the recently developed Ken Long templates - the Swing Systems and Critical States templates.
Across the following ten chapters, we will delve into various facets of trading systems, equipping you with the knowledge and tools needed to navigate the complexities of modern trading. Whether you are an aspiring trader seeking to embark on your trading journey or an experienced trader looking to refine your existing strategies, this guide offers valuable insights and practical advice to help you master the art of trading systems.
Today I’d like to go through an example of how we can use our logic chain concept to do a top-down analysis of the market to find symbols in a critical state that we can be ready to trade the next day. In the Owl Group we use a “plan, prepare, execute, assess” process for trading in a systematic and professional way. A large part of the ‘prepare’ phase consists of having reliable ways to find targets.
It is during the preparation phase that the trader will conduct critical rehearsals of important decisions with as many iterations and scenarios as is practical and useful. The best rehearsals duplicate the conditions under which the decision in question must be made. A trader’s rehearsal, therefore, could include reviewing critical chart patterns or practice trading with a trading simulator or paper trading while the market is open or prototype trading with very small position sizing and real money.
As an update to our prior article on our Thinkorswim trading user group, we will be embarking the next several weeks on “Finding the movers”. Based on feedback from our members, we will be focusing on identifying trade candidates based on the top down “Logic chain” strategy as developed by Dr Ken Long.
One of the best uses of the laconic management technique I have used in my own trading is simplifying my ruleset. I have often had a struggle of values with trading rulesets where one part of me wants to have complex rules with a contingency for every plan. And the other part wants to have simplified rules that might not have every scenario mapped out, but because of the simplicity of them my effectiveness in execution can be almost flawless. The psychological benefit of being able to execute a ruleset perfectly really can’t be overstated. And this has allowed me increase span of control very easily when I take the approach of an ‘easy peasy’ rule set.
Using data in trading is a fascinating experience for me. Like many things in life, I believe it’s the art of striking a balance. I need data in order to trade and in order to analyze my trading results. You could say the whole process of trading and financial instruments can be reduced to data points. It is just price, after all. But what’s so interesting to me is that I know from experience it’s not always about more data.
