Rule of 10 Journal

Quote from jagmot:

Tortoise, by all means I would be happy if someone else were to setup a different r10 system and keep score with me the same way. Please keep a running tab at the end of your posts.

0 for 1
1 for 2 etc
+3 points
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Ok. It just struck me though that, in my enthusiasm for this thread, I was stomping all over your journal. My apologies!

With your permission then, I'll continue....
 
Quote from jagmot:



Today's high is 1291.75
Market is currently at 1281.75
Long 1 contract at 1281.75
Target 1291.75
Stop 1278.75
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Problem here is entries have no set up plan. Do you go long or short when 10 is hit and is it a fade like hitting a pivot for a few points or is it a true reversal to then move another 10 points. Your assumption here is market moved down 10 points from the high and then based on your stop and targets will move back 10 points to the high.

This is the problem with the rule, the rule does not state what you do and the targets are not taking into account what is going on in the market. If market is dropping and trend is down, why would one assume a 10 point move off the highs is met by a retrace back 10 points?

I wish you luck but the problem is the entry is always subjective based on the individual so no general rule can be established.

I think the Rule of 10, if consistent is better used as a target. If the high was 1291 and you got short at 1289 and the market looks like it will sell off strong, then one can try and look for 1281 as a target on the move.
 
Quote from optioncoach:

Problem here is entries have no set up plan. Do you go long or short when 10 is hit and is it a fade like hitting a pivot for a few points or is it a true reversal to then move another 10 points. Your assumption here is market moved down 10 points from the high and then based on your stop and targets will move back 10 points to the high.

This is the problem with the rule, the rule does not state what you do and the targets are not taking into account what is going on in the market. If market is dropping and trend is down, why would one assume a 10 point move off the highs is met by a retrace back 10 points?

I wish you luck but the problem is the entry is always subjective based on the individual so no general rule can be established.

I think the Rule of 10, if consistent is better used as a target. If the high was 1291 and you got short at 1289 and the market looks like it will sell off strong, then one can try and look for 1281 as a target on the move.
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Actually, I think this one is pretty clear...you fade 10 points off a reaction high or low, period.

Jagmont is using a 3:1 r/r. I'm using 2/1. No trade management.
 
Quote from joeyata1:

as vol said i don't think you can have a set profit target of 10 pts. you have to manage the trade based on market conditions at the present. for instance if were in a vicious downtrending down day you might only be able to make 3-4 pts off any long signal. i think the story is one must adapt any type of trading to there own personality and the the day to day market. for instance some people feel comfortable scaling in positions as things go against thema nd others don't. some people feel comfortable with 5 pt stops and others like 2 or 3. if if were that easy to buy here and sell there with no thinking all would do it
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Exactly. Or put another way, there are no rules in the stock market. That makes this "rule" of 10 a misnomer to start with. Managing it won't work in the end either, because the market is in a constant state of change.

In the end, I think the journal will prove that the rule, and any management undertaken, will not work. But I will watch with interest. Good luck.

OldTrader
 
Quote from OldTrader:

Exactly. Or put another way, there are no rules in the stock market. That makes this "rule" of 10 a misnomer to start with. Managing it won't work in the end either, because the market is in a constant state of change.

In the end, I think the journal will prove that the rule, and any management undertaken, will not work. But I will watch with interest. Good luck.

OldTrader
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My feelings as well. But, as they say, the proof of the pudding is in the tasting...
 
Quote from tortoise:

Actually, I think this one is pretty clear...you fade 10 points off a reaction high or low, period.

Jagmont is using a 3:1 r/r. I'm using 2/1. No trade management.
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His setup is not a fade, his profit target is 10 points. So from 1291 to 1281, BUY and then look for 10 points back to that high. Not a high prob set up IMHO. A fade would make sense for a few points. If he corrected the targets then ignore this post as it could work as a fade trade.
 
Quote from optioncoach:

His setup is not a fade, his profit target is 10 points. So from 1291 to 1281, BUY and then look for 10 points back to that high. Not a high prob set up IMHO. A fade would make sense for a few points. If he corrected the targets then ignore this post as it could work as a fade trade.
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If that is the case, then I have misunderstood...
 
I think it is actually a good idea having 2-3 people running 2-3 different versions, how they understand and apply their rules during the same timeperiod. Then we can compare which one was more effective, profitable,etc.

Covering now would give a 5-6 pts win and with the previous 3 pts loss it is still profitable for today...
 
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