Rule of 10 Journal

jagmot · Aug 13, 2008

Quote from Pekelo:

Wouldn't 1277 be a long entry here?

Yes, I just didn't have a chance to post (although 1277 was not hit yet)

I would use the new reaction high of 1286 though.

So here is our current setup 1288 short (3 pt stop), 1276 (3 pt stop) long.

We've been having a lot of trend days so far since this exercise got started! I would suspect that a long at either level is going to get stopped out...

volente_00 · Aug 13, 2008

Quote from jagmot:

This trade was stopped out this morning.

3 for 8
+13.75 pts total

where did the 87 long entry come from ?

93 -10 = 87

even using 10 from yesterdays reaction lows at 94 showed 84

volente_00 · Aug 13, 2008

Quote from jagmot:

Yes, I just didn't have a chance to post (although 1277 was not hit yet)

I would use the new reaction high of 1286 though.

So here is our current setup 1288 short (3 pt stop), 1276 (3 pt stop) long.

We've been having a lot of trend days so far since this exercise got started! I would suspect that a long at either level is going to get stopped out...

I've notice you are trying to bracket trade this strategy, when I trade it I also overaly a directional bias on it to help judge whether I should trail the stop or reverse the position completely. The bracket idea may work but the target is probably to high for it to be highly profitable.

OldTrader · Aug 13, 2008

Quote from volente_00:

where did the 87 long entry come from ?

93 -10 = 87

even using 10 from yesterdays reaction lows at 94 showed 84

I think that's the point. This so-called "rule" is not really a rule. It's a discretionary determination of a buy or sell point, 10 points from some other discretionary point. Some of them work out, some don't. It works best in hindsight.

OldTrader

jagmot · Aug 13, 2008

Quote from jagmot:

Yes, I just didn't have a chance to post (although 1277 was not hit yet)

I would use the new reaction high of 1286 though.

So here is our current setup 1288 short (3 pt stop), 1276 (3 pt stop) long.

We've been having a lot of trend days so far since this exercise got started! I would suspect that a long at either level is going to get stopped out...

Long here at 1276
Stop 1273
Target 1286

jagmot · Aug 13, 2008

Quote from OldTrader:

I think that's the point. This so-called "rule" is not really a rule. It's a discretionary determination of a buy or sell point, 10 points from some other discretionary point. Some of them work out, some don't. It works best in hindsight.

OldTrader

I do think it is funny that v is having trouble following my rule of 10 trades

That being said, I think that the rule of 10 is tough because there are many spots where the rule of 10 could come into play depending on your interpretation. I'm doing my best to use the spots that I think are appropriate.

I guess I should have named the journal jagmot's rule of 10.

I could argue that the new buy point should be 1272, but I'm not since the next few bars after the move at 11am EST retraced most of the way.

volente_00 · Aug 13, 2008

Quote from OldTrader:

I think that's the point. This so-called "rule" is not really a rule. It's a discretionary determination of a buy or sell point, 10 points from some other discretionary point. Some of them work out, some don't. It works best in hindsight.

OldTrader

Apparently it works well enough that a newbie who is trading it not even the way it is suppose to be is still net profitable with a low winning percentage. There is nothing discertionary about the number 10. A 5th grader can add or subtact it if you gave them a chart and said do it from the highest point or the lowest point. Are you smarter than a 5th grader ?

75

if you believe it you will see it.

volente_00 · Aug 13, 2008

Quote from jagmot:

I do think it is funny that v is having trouble following my rule of 10 trades That being said, I think that the rule of 10 is tough because there are many spots where the rule of 10 could come into play depending on your interpretation. I'm doing my best to use the spots that I think are appropriate.

I guess I should have named the journal jagmot's rule of 10.

I could argue that the new buy point should be 1272, but I'm not since the next few bars after the move at 11am EST retraced most of the way.

I think the problem is when you have a trend day, the reaction lows and highs are hard to point out compared to a chop day when it skys and dives all over the chart. As I said in the beginning, this type of contrarian trading and this strategy will not fare well on a trend day unless you are on the right side from the start. This is why I stick to a 3 point stop out rule for the day.

volente_00 · Aug 13, 2008

jag, are you running this thru tradestation ? if you get bored change your system to where once a trade is 3 points in the green, the stop goes to entry while waiting for the 10 point target.

OldTrader · Aug 13, 2008

Quote from volente_00:

Apparently it works well enough that a newbie who is trading it not even the way it is suppose to be is still net profitable with a low winning percentage. There is nothing discertionary about the number 10. A 5th grader can add or subtact it if you gave them a chart and said do it from the highest point or the lowest point. Are you smarter than a 5th grader ?

75

if you believe it you will see it.

The number 10 is not discretionary. What is discretionary is where you add or subtract the number 10 from.

It's clear that what you think the "rule" is, and what jagmot thinks it is, are two different things.

If it's truly a "rule", then you should be able to set forth exactly how entries and exits are determined. I've yet to see you do that.

There are 10 point moves all over the chart. It's just a question of where they started.

OldTrader