Clarification on using Blackbird or Bloodhound to exit? (Solved)

I'm really trying to explore my options on exits when using Blackbird and Bloodhound together.  To help with this discussion, I'll provide a simple example:

My example here is a MACD, always-in-the-trade system.  I'll heavily modify the input variables from 12,26,9 to something like 20,100,9 to attempt and capture a longer swing trade.  So in this simple system, I'll go long when the bottom of the MACD, and get the first sign of heading up (by comparing each bar measurement of the MACD histogram)  The opposite would be done for shorts.  In this way, I would in theory be always in a trade. Sometimes the market would be optimal for this sort of thing, when the market is making extreme moves in one direction, and then reversing and going in another extreme move.

If that were the case, my system is done, but that's not very realistic.  Sometimes you would enter a trade, and the market will continue to keep heading in the same direction (i.e. head fakes).  So we can put a fixed stop loss on this, but might kill the profitability on some trades that just need room to maneuver as they're shifting from one direction to another. 

So I like the idea of trading two contracts in this scenario.  The first and second contract would both enter at the same time - clearly a Blackbird thing.  On the first contract, we go for some fixed amount of profit in ticks - easy enough to do in Blackbird as well.  On the second contract we want to allow this to trend on the full swing of the MACD cycle, and would be the always-in the-trade (by setting Enter When Flat to False).  So one thing that can be done is to use a modified Keltner channel as a circuit breaker of sorts.  The point of interest would be the outer bands of the Keltner.  For the long trade we could just exit on the bottom band when the contracts (or just one contract, in the case when it had hit the fixed tick amount), and the top band for short trades.  This, in effect, would help mitigate the choppy periods - either breaking even or losing less, while allowing the maximum trend moves.

So in the case of exiting on the Keltner top/bottom bands is that best done in Blackbird as well?  

Together with this, Blackbird could also setup exclusions around volatile news periods, like Wednesday mornings for CL.  I would want to exit all trades just before these times, then using the time sessions, let it continue after that.  In my similar post on this in another thread, I'm guessing that would have to be a Bloodhound thing.

Thanks,

-Rik

 

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2 Comments

  • 0
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    Zac

    Hi Rikki,
    Q:  "My example here is a MACD, always-in-the-trade system."   and  "...and would be the always-in the-trade (by setting Enter When Flat to False)."
    A:  FYI, that statement and setting conflict with each other.  Enabling 'Enter Only When Flat' prevents BlackBird from reversing a trade, which prevents a always-in-the-trade system.

    Q:  So in the case of exiting on the Keltner top/bottom bands is that best done in Blackbird as well?
    A:  That condition could be built in BH or BB.  Either way is good.  To do it in BB use a custom Trailing Action to move the stop to the Last price   To detect price above/below the Keltner Bands use Trailing Actions >> Trigger On >> Price vs Indicator.  In the Action column, set it to Move to Last.

    Q:  I would want to exit all trades just before these times...   I'm guessing that would have to be a Bloodhound thing.
    A:  Yes, BH would be the easiest.  A second way is to use the SiTimeBlock indicator in  Trailing Actions >> Trigger On  to move the Stop-loss or profit target to the Last price.  Here is a video on the SiTimeBlock indicator... https://www.google.com/url?q=https://youtu.be/qc6TdP4sQDE?t%3D0h54m23s&sa=D&ust=1471372633376000&usg=AFQjCNFLzxi1DQk7cq9idOAkBZX_jfHffA

    Sorry for being kind of vague.  Once BB is out of beta we'll provide full support.

    Thanks

  • 0
    Avatar
    Rikki Deere

    Hi Zac,

    On the first question, I really didn't explain this in a way that was conveying my point very well.  Also, I believe I've figured out the answer to what I was trying to accomplish.  Let me explain...

    In essence, I'm starting out with a system that would always be in a trade.  It's designed from the outset to alternate between long and short for as long as it running. The point I was trying to make was if I were to interrupt this cycle of long and short signals with an intermediate exit signal (like a Keltner channel or some other exit) would the next long or short continue to take place.  And the answer is of course yes.  

    I tested this with BH template I created from video you made a year or two ago.  In that case I just used the anaSuperTrend to go long/short on every turn of the trend.  I tested various exits in between each SuperTrend signal on both Bloodhound and Blackbird, and the next SuperTrend signal kicked off without an issue - as you would expect.  

    The other handy exit feature on Blackbird is exit on close.  You can get creative with Session Manager, and have multiple closes per day.  Blackbird will close out on each one, and then pick up the next signal from Bloodhound right after that.

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