Something very simplistic
- Thread starter Quah
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say you double/triple up on the losers and those fail. maybe there's a high probability trade to make from there also. any ideas?
I am still confused as to exactly how you trade? Can you provide an example using a chart?
--MIKE
If you are really serious about this strategy.. I would backtest it with various setups on various min. bars. Can someone do this and document it for everyone on this site. I dont have those capabilties right now.
-MIKE
Reminds me of a made up story I heard once. A group of rich saudi oil men show up at a casino with $$$$.
On the rouelette wheel they bankrupted the casino. How?
They bet on only one number. Everytime they lost, they doubled their last bet. Eventually, they had to win, and win big.
It only works if they had enough money to remain in business through all the possible drawdowns.
I actually have seen a real life trading account where someone is doing this. I thought it was crazy, but if you have enough money it should be ok.
I am using the close of the previous bar on a 1 minute chart.
If you look at a chart of 1 minute bars, the close of the previous bar is rarely at the extreme of the other bar, therefor you will nearly always get filled on a backfill through your limit. The only times that you definitely won't get filled is when there is a complete gap between bars. In fact, 50% of the time your limit order is really a market order as it will be taking out the best bid or ask.
Gordon - Stop thinking.
- I mean that with all due respect. At some point it may be worth considering what to do at that point - but, IMO, for now at least - we aren't far enough into this yet to even think about that. Why? Because we are not even saying we are sure of the things that would lead to needing to solve that possible problem. Thinking like this is great - but I've noticed myself that when I start taking off with thoughts of all the possible things/ways/etc., I end up losing the original intent.
One of the nice things about this kind of trading is that at the very end it boils down to "what do I think the market is going to do in the next 30 secs." The "when do I take a trade" question is gone. You are forced to make a decision on the market direction at every point your time factor comes into play. If you were to use whatever tool you could to show you where the market is 'most likely' to go in the next 30 sec's, you should be able to come up with something that will give you a 60%+ success rate.
Do you mean exactly how I decide what direction to trade?
Yes, I'm using stochastics - I'm looking at stochastics on a 2 minute chart - not a one minute. When the appropriate one minute bar hits, I look over at the stoch on the 2 minute chart. If one line is above the other, I go long, below the other, I go short. Doesn't matter where in the 0-100 range they are. Play with the stoch parms (use something non-conventional) until you find something you are comfortable with. Or maybe you'd rather use something totally different. I've looked at using the same stochastics of a one minute $TICK also - that works very nice also. Maybe some indicator on a chart of GE would work just as well. Find something that works for you - and that you like and can quickly interpret with a "snapshot" glance. I don't think the indicator is the most important thing - as macal is getting good result using something totally different - he is just applying a similar methodology/technique. IMO, that is the important thing.
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