Successful Stop & Reverse - Semi Martingale Trend Following Strategy
- Thread starter jones247
- Start date
I think everyone is too quick to jump to conclusion.
The key here is money management and leverage.
OP can you give a concrete example of how you increase you position and you win/loss at each sequence started from first to the 7th based on your previous post.
"If I lose on all 7 sequences, which is the Worst Case scenario, while trading a stock worth $135 having an ATR of about 2, my max loss is about $2600."
The key here is money management and leverage.
OP can you give a concrete example of how you increase you position and you win/loss at each sequence started from first to the 7th based on your previous post.
"If I lose on all 7 sequences, which is the Worst Case scenario, while trading a stock worth $135 having an ATR of about 2, my max loss is about $2600."
It may be more sophisticated than a simple "double down until you win" type strategy, and if you handle it like you say, it probably won't blow up in specatular fashion. But I still don't think it will work for very long. Random volatility may be such that it will work for quite a while tho.
You mention Don's open order strategy, but from what I've read about that, it is far from "random". They try to align themselves with the specialist and ride with them for a bit. Not random.
I'd try it with small size and track every trade. Use Excel to log all the trade details. Then analyze how it is doing. No reason to rush into possible big losses.
Good luck.
The market is not random but it does chop, it does range, and it does trend.
However, it does not do all 3 things at the same time. The problem with the system is during range or chop, it will start to lose money.
However, it does not do all 3 things at the same time. The problem with the system is during range or chop, it will start to lose money.
If anyone is interested in this approach, but without the randomness or gambler's angle, consider Kagi charts. Read up on how they work. The Japanese invented them in 1870.
My favorite system, similar to what is described here, is VT Trader's Volatility (ATR-based) Level Stop-Reverse trading system. It's captures trends beautifully, and handles choppiness quite well. With a little market knowledge and experience (times of New York and London sessions, and Daily Floor Pivots based on midnight ET), and a couple of indicators you know very well, it is the most powerful system yet. You can catch every trend.
The Japanese developed a VT Trader Trading system called Big Bang FX. Google for "big bang fx-6-real trade version". I don't know Japanese, but I think it uses the above trading system with Fibonacci extensions. And as you know, the Japanese are very good at technical analysis. They brought us candlesticks, Renko, Three Line Break, Heikin-Ashi, and Kagi. Not to mention Ichimoku.
VT Trader also includes several indicators which are usually considered proprietary and not offered: DeMark and Kase. Plus one über indicator called QQE (Quantitative Qualitative Estimation), which is a super powerful version of RSI (if you like RSI, you can't beat this). Funny thing is, no one knows who created QQE or where it came from. Some prodigious geek somewhere gave it to the world.
My favorite system, similar to what is described here, is VT Trader's Volatility (ATR-based) Level Stop-Reverse trading system. It's captures trends beautifully, and handles choppiness quite well. With a little market knowledge and experience (times of New York and London sessions, and Daily Floor Pivots based on midnight ET), and a couple of indicators you know very well, it is the most powerful system yet. You can catch every trend.
The Japanese developed a VT Trader Trading system called Big Bang FX. Google for "big bang fx-6-real trade version". I don't know Japanese, but I think it uses the above trading system with Fibonacci extensions. And as you know, the Japanese are very good at technical analysis. They brought us candlesticks, Renko, Three Line Break, Heikin-Ashi, and Kagi. Not to mention Ichimoku.
VT Trader also includes several indicators which are usually considered proprietary and not offered: DeMark and Kase. Plus one über indicator called QQE (Quantitative Qualitative Estimation), which is a super powerful version of RSI (if you like RSI, you can't beat this). Funny thing is, no one knows who created QQE or where it came from. Some prodigious geek somewhere gave it to the world.
Kagi charts are not available on most free forex charts. But GFT Dealbook 360 has them. The best thing about Dealbook though is their forex news; it alerts you anytime a new story is released. The two bad things about Dealbook are it takes a LONG time to load (give it a full two minutes, even on a new computer), and once the trial expires you have to delete a few hidden remnants to continue using it with another trial account. Hopefully you are hacker-savvy enough to do that. The Windows in Dealbook 360 are rather strange too. Dealbook is the only free charting program I know that has Kagi charts. They're not very popular.