Another Very Simple Trading Strategy

[dbphoenix]

Quote from ewile:

I claim no origionality here. This method was totally made from ideas posted the other "SIMPLE" threads.

Hey, ewile, how ya been? There are several other TMF refugees here as well.

No need to even try to claim originality since no one is doing anything original. The point, after all, is to make money.

I assume you checked out the "Keeping It Simple" thread I started under Futures, though I hope you didn't start at the beginning . All I can suggest is that you not jump to any conclusions based on a too-small sample of charts. We've had a lot of trending days and a lot of days that trade in very tight ranges after large overnight gaps. There don't seem to be as many "Z" days as there once were.

However, all that can change, and will, so the idea of holding it all till the close may not be the best choice.

Rather than extend your backtest, though, I suggest you sample whatever archive you're using; that is, rather than go back another two months or four months or whatever, jump several months or even into another year and sample two or three months wherever you land. This way you'll be testing your strategy in a variety of market conditions and not just what we've experienced over the past six months. You may find that selling half and holding the rest till the close is the better option.

--Db

 

[QQQBALL]

Quote from wally_:



Using Fibonacci retracements (FR) for stop-loss placements can be useful or for entries on pullbacks if you believe that the original trend will continue. You could then add to your position or exit it if you see any signs of weakness. This complicates things a bit, but I would say (just as inandlong just did) that 50% could be a good point for a stop-loss, but again, you may need to wait till the 61.8% FR is hit and then decide whether to exit or not. This could save you about 2 pts out of approximately 6 pts as far as ES is concerned, meaning about $100 for 1 ES contract.

i have been noticing some very deep pullbacks in the recent past (on days that i have traded) of 75% or so, which is tricky to trade, particularly on gap days. what do you guys do?

 

[inandlong]

ewile... I hope you don't think anyone was challenging your originality. It takes just a minute or so to see that you posted on the Importance of Simplicity thread and were interested in the 30 minute breakout there... which is where db got it too. And of course you visited the Keeping It Simple epic. Opening range breakout is widely talked aboout and neither I nor Wally - if I may - were making an issue of originality. Wally was an early participant in Importance of Simplicity.

I had started to post earlier a question about your success during the holiday period, but you just answered it. That was a good move to forego that period.

Personally there are only two questions that need to be asked about any opening range breakout method using the H/L of the range and intending to hold until close. Those questions are: is the open to close range a substantial portion of the daily range, and does price expand the range of the chosen interval in both directions frequently during the day... especially the first 90 minutes. If the answer to the former is yes and the latter no, then you have a quality candidate.

It doesn't matter whether you are in a trading or trending market, if those two criteria are met, then trade that bad boy... or girl... for those who are are offended by masculine references.

 

[inandlong]

Quote from QQQBALL:



i have been noticing some very deep pullbacks in the recent past (on days that i have traded) of 75% or so, which is tricky to trade, particularly on gap days. what do you guys do?

Q's, what time interval bar are you talking about?

 

[wally_]

Quote from inandlong:

and neither I nor Wally - if I may - were making an issue of originality. Wally was an early participant in Importance of Simplicity.

Indeed, my goal was only to put it in yet another context, I thought it would be helpful.

BTW, some other post of mine did not get posted here, don't know what to think about it. It was in response to QQQBALL's post. Well anyway, I am going to bed now.

 

[inandlong]

That happens to me occasionally too. And always after I have typed a brilliant and enlightening post... you know, one of my many! I click the submit reply button and voila, my post vanishes into thin air. Of course I am too spent to rewrite the post so the world goes on without it... how I do not know.

And btw wally, empty your mailbox a bit will you?

 

[wally_]

Gee, that's too much today, yet another post disappears, this time in response to inandlong. Is someone doing this on purpose or what?

 

[inandlong]

As far as I know, only myself and Baron can delete and edit other members' posts in this forum.

Sorry for the difficulty wally.

 

[big_jdez]

Quote from inandlong:



Personally there are only two questions that need to be asked about any opening range breakout method using the H/L of the range and intending to hold until close. Those questions are: is the open to close range a substantial portion of the daily range, and does price expand the range of the chosen interval in both directions frequently during the day... especially the first 90 minutes.

Personally, I use an Excel SS that tells me how much a stock moves from open to High on an up day which I find useful. I also have the opening ranges programmed into this ss.

 

[inandlong]

Hey big,

I saw you in the chatroom. I don't get there too much anymore.

Interestingly, your [open to high on an up day] idea corresponds to what Crabel calls the stretch, whereby he takes an average of the open to the nearest extreme for the day and uses it for the next day.

If it is not too intrusive of a question, how does this information affect your decision-making? I am thinking it would be useful to help determine a profit target. If you'd rather not say, no prob here.