Hello:
I have a couple of things to do today. One of them is to offer a little comment here after you all have had your opportunity to "fix" Trader28's system so that it is "improved"..
First, there is one criticism that can be leveled at most people on this site. You don't do your research. Apparently, you are willing to just read about someone's system and then throw money at it "because it sounds good" or "it trades pretty well on the simulator" or "I have been papertrading and it makes money"...Those of you who are guilty of that kind of approach, well you won't be here long.
I am not as generous as Trader28. Years ago I learned how to research and characterize markets. I learned just how difficult it is to do correctly and frankly I am not willing to share like he did.
What I will do is say this;
1. Trading short term momentum works IF you develop the system correctly.
2. Adding indicators isn't the way to go
3. Adding complexity to the system isn't the way to go
4. While entry strategies are important, it is exits and stop losses that are most important.
5. Currently, no one here (at ET) has shown me that they understand how important it is to develop an effective stop loss strategy
From a professional standpoint, after Trader28 put down his basic system, it was all downhill after that. You folks went in the wrong direction. Simpler would have been better. I trade a similar system using only one indicator (I won't say which one) and a stop loss algorithm that I developed to show me which market to trader each morning.
Since I tend to be a mean spirited SOB, that is all I am willing to say. I hope it will inspire someone to do their own homework and go the last few yards to the finish line.
Good luck
Steve
P.S.
Athough the magazine "Stocks & Commodities" is a complete (in my opinion) rag, there is a pretty good article this month showing an alternative method for figuring stop losses. Article is by Thomas Stridsman.
