Module 6, Lesson 1
Time-based DPS Techniques
Tomas: Module 6: Time-based Dynamic Position Sizing Techniques.
Okay, so this is the very last module of this programme. So here, again, a quick dis-
claimer, and let's have a look at time-based technique.
So we've already been working quite a lot with time in Breakout Strategy Master-
class. You already know the concept that I use, and that I shared with you there,
which is called T-Segment.
The T-Segment concept is a very, very simple one, yet very powerful one. Basically,
many markets behave differently during the morning, during the lunchtime, and
during the afternoon periods. Therefore, the probability of success can be very dif-
ferent within each third of a trading session.
T-Segment uses this phenomenon by splitting the regular trading hour session into
three blocks and using them as a filter. That's the T-Segment concept as we use it in
Breakout Strategies Masterclass. So you already know that sometimes we only
trade within one zone, the first third of the day, second one or third one; and some-
times we allow a strategy to work and trade during the entire day.
But we do have the possibility of engaging this time filter through the T-Segment
concept.
So Time of Day can have an enormous impact on the quality of your end results.
That’s completely, without any doubts. That's something I used to work with already
as a discretionary trader many, many years ago - almost a decade ago. And again
and again I could see completely different statistics, completely different probabili-
ties with different - or during different session - trading sessions of the day.
Okay, so now we will use this concept for dynamic positions.
Because we don't need to always use time as an independent filter only, it can also
serve us beautifully as a tremendously powerful filter - not filter, but tremendously
powerful technique for Dynamic Position Sizing.
And the idea here again is very simple.
Page 1 of 2
(c) 2018 [Link] / Distribution without author´s approval is not permitted.
TRADING INVOLVES A SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS,
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS
We use these three T-Segments as we do it in the Breakout Strategies Masterclass,
and test different position sizes on different T-Segment, okay?
So we take the full range - the regular trading hours, let's say 9:30 to 3:30 - of the
exchange time, and then we split them into thirds; and each third will, I call it in the
Masterclass a different T-Segment, but it will be a different zone for different posi-
tion sizing.
So this will be only one technique. There are no further variations of this. Only one
technique - we only use this T-Segment with three different zones. We will have an
Indicator, testing strategy, optimization code, and result code in this module again.
Okay, let's go to TradeStation.
Page 2 of 2
(c) 2018 [Link] / Distribution without author´s approval is not permitted.
TRADING INVOLVES A SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS,
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS