The Importance of Simplicity
- Thread starter Corso482
- Start date
I may have missed this, and, if so, my apologies. But I'm assuming that you don't deal with inside bars. In other words, if the first 30m bar isn't broken by the next bar or the bar after that (or the bar after that), you wait until that first bar is broken rather than play a break of the inside bars?
--Db
Thanks, though I have another question that I should have asked at the same time.
Let's say you've got bar A. It's followed by bar B, which has a lower high and a lower low, and the low trips your entry sell stop below bar A. Price then retreats back into the bar and you have to cover. If price then advances, do you use the top of bar B or bar A as your entry target (plus the two points)?
Clear as mud?
--Db
once saw a trader, we'll call him "Mike", who had a very simplistic methodology that worked!
5 period SMA over 15 period SMA in tandem with volume, cross overs were buy/sell/short signals.
he regularly hacked out profits consistently, whilest others were almost TA (tech analysis) geniuses quoting and expousing all the complicated indicator babbly gook, and couldn't make a dime worth a darn.
simplicity you say, at least when its simple, then even with these whipsaws, there's not much to confuse...
5 period SMA over 15 period SMA in tandem with volume, cross overs were buy/sell/short signals.
he regularly hacked out profits consistently, whilest others were almost TA (tech analysis) geniuses quoting and expousing all the complicated indicator babbly gook, and couldn't make a dime worth a darn.
simplicity you say, at least when its simple, then even with these whipsaws, there's not much to confuse...
Db...
I would still use the high of bar A for a long entry but my new short entry would be the low of bar B minus 2 points of course.
Opposite of course for a failed long trade.
For instance looking at todays NQ chart my new long entry at this point is 1066.50 that is 2 points above that spike high after the news. Since we already had a 10 point break to the downside I will not take a trade below that low.
Mike
Thanks. I asked because I've come across systems like this before (or should I call it a "methodology") and some of them have said that if you return to the range, you have to switch to a chopping strategy, i.e., you can't use this momentum strategy until you exit the entire range one way or the other. Apparently, this is how you play it.
Doesn't it drive you a little crazy, though, to see a twenty or thirty or forty-point ramp from the low of the range up to the top before a breakout to the upside and miss the whole thing?
--Db
Natalie and Mike,
I wonder if you guys have any statistics regarding the drowndown or, even better, the number of consecutive winners and losers. Today was a very wipsaw day if I wanted to use Mike's entry method (1 pt above or below the most recent high/low since the first half an hour) so I am asking this to learn how often situations like that happen.
Natalie,
is your entry method the same as Mike's, that is 1 pt above/below or do you enter just one tick above/below, which what I would probably do, getting even more wipsaws on a day like today.
I am thinking about some modifications and of course I will share them with you in due time. I first need to see how they would work. I will paper trade first.
Now, today was a scary day, hard to handle, it's good it happened before I started using this method, so I really know what the extremes could be like.
Thanks,
wally_
I wonder if you guys have any statistics regarding the drowndown or, even better, the number of consecutive winners and losers. Today was a very wipsaw day if I wanted to use Mike's entry method (1 pt above or below the most recent high/low since the first half an hour) so I am asking this to learn how often situations like that happen.
Natalie,
is your entry method the same as Mike's, that is 1 pt above/below or do you enter just one tick above/below, which what I would probably do, getting even more wipsaws on a day like today.
I am thinking about some modifications and of course I will share them with you in due time. I first need to see how they would work. I will paper trade first.
Now, today was a scary day, hard to handle, it's good it happened before I started using this method, so I really know what the extremes could be like.
Thanks,
wally_
Originally posted by dbphoenix
Doesn't it drive you a little crazy, though, to see a twenty or thirty or forty-point ramp from the low of the range up to the top before a breakout to the upside and miss the whole thing?
--Db
Well, the question is how often do you get swings that violent as today? Probably not that often, so this does not have to be relevant. For a method to work it has to be selective, I believe. You cannot have a universal method for every situation, but you can have a bunch of them, each for a particular setup.