Rule of 8
- Thread starter mikeenday
- Start date
The appropriate rule to use is the Nth Day Rule which only buys on the lowest day of the series. The -Nth Day Rule applies for shorting extended up movesQuote from sle:
and if it does not happen on day 9, you should wait for day 10in any case, a simple excel model will prove to you that trading simply on direcitonality of N days prior is not a good strategy - while you will have good winners/losers ratio, the return from the strategy is rather low.
what a laugh, very amusing.
just when I read through a trading book, did not rember its name. but the book gave out an a very interesting story.
he went to pee with other traders, he saw a coin here, and his friend immediately warned and asked him to pee into another place. he feel weird about his friend's unreasonable suggestion, so when out of the batheroom, he asked why?
pee in the coin means bad luck. after 7day's drop, next day will be sunny, it is a laugh. superstitution? yes.
based on physics iternia law: if an object moves to some direction, if no resistance involved, the object will continue to move in this direction ....
that is science.
just when I read through a trading book, did not rember its name. but the book gave out an a very interesting story.
he went to pee with other traders, he saw a coin here, and his friend immediately warned and asked him to pee into another place. he feel weird about his friend's unreasonable suggestion, so when out of the batheroom, he asked why?
pee in the coin means bad luck. after 7day's drop, next day will be sunny, it is a laugh. superstitution? yes.
based on physics iternia law: if an object moves to some direction, if no resistance involved, the object will continue to move in this direction ....
that is science.
most people trade based on"wish, hope". while not sound scientific fact, no wonder loss after loss.
the most important rule in trading is " trade in the direction of least resistance".
we all know human being are not GOD. they are greedy, they are fearful, they are emotional... because of those built in sins, the best profitable direction bet is: things always go bad.
the most important rule in trading is " trade in the direction of least resistance".
we all know human being are not GOD. they are greedy, they are fearful, they are emotional... because of those built in sins, the best profitable direction bet is: things always go bad.
In a brief serious vein, Tom DeMark ceated some technical indicators that involve consecutive up (or down) days.
A buy signal for the TD Setup is where you have 9 consecutive bars where the close is less than the close 4 bars ago.
A buy signal for the TD Countdown is where you have 13 consecutive bars where the close is less the than the bar low 2 days earlier.
Once upon a time I used to look at this for some equities that I traded. The main problem was that there was no magic in the number 9 (or 13). You could have 10 or 12 or even more consecutive bars and you could have to endure some pain before the eventual turn if you took the trade. Or you might get a brief reverse and the pattern would then continue and you'd be SOL on you misdirected trade (see '08-'09 bear).
But of merit, in general, with a large number of consecutives up (or down) days in the same direction, you tend to be closer to the top (or bottom).
A buy signal for the TD Setup is where you have 9 consecutive bars where the close is less than the close 4 bars ago.
A buy signal for the TD Countdown is where you have 13 consecutive bars where the close is less the than the bar low 2 days earlier.
Once upon a time I used to look at this for some equities that I traded. The main problem was that there was no magic in the number 9 (or 13). You could have 10 or 12 or even more consecutive bars and you could have to endure some pain before the eventual turn if you took the trade. Or you might get a brief reverse and the pattern would then continue and you'd be SOL on you misdirected trade (see '08-'09 bear).
But of merit, in general, with a large number of consecutives up (or down) days in the same direction, you tend to be closer to the top (or bottom).