Line in the Sand

[PetaDollar]

Hi Folks, some thoughts tying together several trading methods:

Trading a moving average, breakouts, or S/R have this in common: a "line in the sand" where you go long when price closes above and short when price crosses below.

It costs money to cross the line; long periods of whipsawing lead to decent drawdowns; a decent move after crossing the line brings profits.

Exit via trailing stop or when the profit can pay for three or more line crossings, for instance.

So, now i'm toying with other "line in the sand" methods.
The opening trade of the day, for example. Or yesterday's close.

I don't think it matters if there is any significance to where you draw the line. If the market trends, you're in.

 

[ChaosNSX]

Quote from peterfigliozzi:

Hi Folks, some thoughts tying together several trading methods:

Trading a moving average, breakouts, or S/R have this in common: a "line in the sand" where you go long when price closes above and short when price crosses below.

It costs money to cross the line; long periods of whipsawing lead to decent drawdowns; a decent move after crossing the line brings profits.

Exit via trailing stop or when the profit can pay for three or more line crossings, for instance.

So, now i'm toying with other "line in the sand" methods.
The opening trade of the day, for example. Or yesterday's close.

I don't think it matters if there is any significance to where you draw the line. If the market trends, you're in.

Its called trend trading...
Price action is your friend.
The chop is your demise.
It works well if you find issues with stigmatic hype, but you better have something else in your arsonal for the flat days.

 

[PetaDollar]

Quote from ChaosNSX:




It works well if you find issues with stigmatic hype, but you better have something else in your arsonal for the flat days.

I have never made money daytrading. And of those methods mentioned I've only seen S/R work for daytraders. I'd be interested to hear if others have had a different experience.

But the single MA is working great for me, with overnight holds.
Also cuts down on those commissions.

 

[ChaosNSX]

I hate to say it but MA crossovers work very well on large institutional held equities. I used to work for a mutual fund watchdog company and through my time there I discovered fund complexes use S&R levels derived from Moving average crossovers for use in determining entry and exit for block trades.
The reason for this is at the support or resistance level its easier for the fund to work the order for best execution. This is actually the basis of one of my systems. Watch GS and you will really see what I mean. I hope this helps. Good luck with your trades.