High Probability ETF Trading
- Thread starter RobtF
- Start date
True for most traders expecially newbies. 80% is hard to get even with R:R equal to 1. Impossible to get for higher R:R IMO. It would be like the market is giving away money to fools.
This is one reason I appreciate the work and insight of Richard Dennis and his turtles. He new it would be impossible to hit high win rates with high R:R so he elected to go with trend following and discipline. Those that listened to him made a lots of money.
I have been able to get as high as 75% with an R:R equal to about 1. That's about it. After that I hit a steel wall. I was able to get as high as 65% with an R:R of 2. Trend following, when I attempted it, gave me about 45% and I just couldn't take it psychologically I mean. I wouldn't make a good student in the turtle class. It takes iron balls to have all these losers and wait for a big winner.
That book sounds like hype for newbies. Any experienced trader knows that these simplistic methods cannot generate any profits.
alternative proposal:
take what others wrote in a stock trading book, rehash it now applied to ETF and you have a new book that will sell.
i am not talking about albeniz here (haven't read it), just a general idea
Quote from Ms Varima-Garch:
alternative proposal:
take what others wrote in a stock trading book, rehash it now applied to ETF and you have a new book that will sell.
I will ask permsission of the honorable lady to generalize her statement above:
take what stupid things others wrote in a stock trading book, rehash it now applied to ETF and you have a new book that will sell to stupid wannabe traders.
Not true. I know of at least 3 commonly known and widely used edges that still work reasonably well. They would all be known to most seasoned traders here (no, I will not be listing them, as some newbies will be PMing for them - do your own homework).
I purchased High Probability ETF Trading and it was a rehash of his book How Markets Works except with ETFs now.
I only skimmed through the book but here's my summary.
1. Buy after ETF is down x days and above moving average.
2. No stops are used, just sell x days later depending on backtest.
All the systems are a variation of this. Buy after down x days, rsi below x or BB closes below x while above moving average x.
The Think Deeper chapter was just a recommendation to write in a journal all your trades and write out any special observations for each trade.
I only skimmed through the book but here's my summary.
1. Buy after ETF is down x days and above moving average.
2. No stops are used, just sell x days later depending on backtest.
All the systems are a variation of this. Buy after down x days, rsi below x or BB closes below x while above moving average x.
The Think Deeper chapter was just a recommendation to write in a journal all your trades and write out any special observations for each trade.
Lenny Dykstra's win rate is higher...
Sounds a lot like my very first system for trading sector mutual funds way back when, sector funds being comparable to ETF's.
Works for a while until it doesn't. It would be more for a long-term strategy too, so most people would get to the doesn't work part only when it's too late for them to recoup the losses and try something else.
I've said this before, but RSI really only works if you use the rule that +50 is a market trending up and -50 is a market trending down. It's a decent ingredient, but needs to be used in conjunction with other stuff. But it's the only way I've ever found that it works consistently. All the other stuff, like this 25/75 rule, is highly inconsistent and actually always ate into the total return of any system I ever tried it on.
Are you serious? That alone labels as the whole book as "Trading for Simple People." That idea is almost every trading book since Noah let out all the animals, including two lemmings (male and female)...