Quote from Newmoney24:
Jack,
your post was awesome- I'm sorry I missed your question earlier I am quite busy so I skimmed through -
to answer why I picked 5 points and 1%
-the 5 points is variable, but the more connecting points, the stronger the trendline, this is a variable that I would test anywhere between 4-10 or more points
as for the 1%-
I chose 1% to limit losses. Months ago i favored 3%, but 1% allows for much tighter control of losses. Further, many trades would be passed because the price of the stock/product would not come in range . For example, say they only come within 2% before recovering back into in-the-money territory- although we miss these trades, we limit losses twice as effectively at 1% than 2% this could be adjusted to be tighter too to limit losses even further (but then ofcourse reducing the # of trades we take)
I read your profile that youve been doing TA since 1957, and generally have a good feeling about you.
I would love to discuss with you more off forum - I don't ask you to divulge any of your private strategies with me, it would be a pleasure to make your acquaintance if even just to network.
Take care and wishing you well~