Been back testing consolidation breakout strategies just wondering if anyone uses this for a swing trade type play and what are your rules for entry. I have been back testing a break of supp/res of a range then a retest of the supp/res then looking for a comfortable entry (part im struggling with). I work 9-5 so i want something to get in place my stops and targets and not have to watch it every second. Your advice is much appreciated
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Consolidation breakouts
- Thread starter mario0887
- Start date
you can trade daily charts......that is ideal for someone who works a day jobBeen back testing consolidation breakout strategies just wondering if anyone uses this for a swing trade type play and what are your rules for entry. I have been back testing a break of supp/res of a range then a retest of the supp/res then looking for a comfortable entry (part im struggling with). I work 9-5 so i want something to get in place my stops and targets and not have to watch it every second. Your advice is much appreciated
entering on pull back-which is, i think, a small consolidation is an age old method.Been back testing consolidation breakout strategies just wondering if anyone uses this for a swing trade type play and what are your rules for entry. I have been back testing a break of supp/res of a range then a retest of the supp/res then looking for a comfortable entry (part im struggling with). I work 9-5 so i want something to get in place my stops and targets and not have to watch it every second. Your advice is much appreciated
entering on a failure of a pull back is the converse of that:
after a pull back, market should continue . but eventually that will not happen and the trend will reverse
I have been back testing a break of supp/res of a range then a retest of the supp/res then looking for a comfortable entry
mr mario0887,
what timeframe charts do you trade from?
how long do you typically hold between entry and exit?
thx
Been back testing consolidation breakout strategies just wondering if anyone uses this for a swing trade type play and what are your rules for entry. I have been back testing a break of supp/res of a range then a retest of the supp/res then looking for a comfortable entry (part im struggling with). I work 9-5 so i want something to get in place my stops and targets and not have to watch it every second. Your advice is much appreciated
I don't get it, you write the entry price and you can't see it? Buy low on support in uptrend and sell resistance in downtrend. If you buy new highs, risk be below support, so huge risk, buy low and risk much less and leaves for more potential. Either way you will have losses, name of the game, but all you can control is where you get in and somewhat risk unless gap opens against position in stocks and ETF..etc. This is simple approach of basics, but my own trading, it is far more complex of when not to take signals based on recent or distant areas of concern, where price is in overall Swing based on monthly, weekly and daily and other reasons.
Been back testing consolidation breakout strategies just wondering if anyone uses this for a swing trade type play and what are your rules for entry. I have been back testing a break of supp/res of a range then a retest of the supp/res then looking for a comfortable entry (part im struggling with). I work 9-5 so i want something to get in place my stops and targets and not have to watch it every second. Your advice is much appreciated
I've had mixed results generally trading any sort of breakout system. Mainly because a tight consolidation can really go either direction.
How are you backtesting these? If so - why are you asking us? If your sharpe/CAGR is good just trade it and adjust your human-entry based on what you learn! The sharpe ratio I use as a baseline is 0.62 - which is a number I pulled from some study on the most popular large hedge funds. Of course, be aware that if you are trading on time frames lower than say...daily your sharpe ratio can be gamed by just increasing the frequency of your trades. It's important to temper metrics with logic.
The mythical 1.0+ sharpe ratio is great but if you can beat a 0.6 you have a strategy that a hedge fund would probably trade.
huge risk means high probability....high probability means less reward......so if you buy new highs, RR should be 1:1....IMOIf you buy new highs, risk be below support, so huge risk,
time is also a issue because you do not want to wait 10 years to get RR of 1:1......but do not complicate your trading by covering all bases
maybe but why not follow it thenMainly because a tight consolidation can really go either direction.