Quote from cd23:
Every day is a winner. Check the change in price of anything with respect to open price compared to closing price.
Every night is a winner. Check the difference in price of close to open.
Bighog talls us about his bugaboo and how he compensates for not having a trading strategy for what happens when he is in the market after he finds out he caught a no run.
Here time passes and he discovers false breakouts, retraces to work and "pesty" whipsaws. Obviously he cuts these losers short each day and is on the sidelines with all his capital for a while. He limits how much he pulls off the sidelines in the first place to be sure he has preserved capital all through the trading day. Obviously he can't say every day is a winner even though he is using a method with the best risk/reward ratio of all (he suggests).
So bighog trades BO's. What is a BO of a false BO? A BO of a retrace? Or a BO of a bugaboo whipsaw?
Lets say there is no false BO or no retrace or no bugaboo whipsaw? How does big hog exit? This is not his special case of cutting a loser short. It is a case of letting a winner run. When does he exit? We do not know as yet.
If he lets a BO become a false BO, then it is a BO that is a loser. He takes a BO and it becomes a retrace after a while; enough retrace passes the time for a while. What does he do with a BO trade that is retracing? He does something.
He, at some point, changes tactics. He is no longer looking at the BO strategy. Generally at this tactics change time, bighog observes it is the time when "off she goes". He watches.
Bighog doesn't win every day.
If you want to take the cure from this modus of trading, you need to learn to "read" the markets. To be able to "read" the markets, you need to be able to "see" the markets by having a comprehensive display.
Where do you look to see whipsaw coming into the picture? Name three places.
Where do you look to see that a BO is coming? Name 9 places.
What tells you in advance that a failure to BO is coming? Look 5 places.
Where do contrarians look to take entries at the beginnings of retraces? Look 7 places.
All the places counted are showing on my screen. Also I trade all of these because it is part of being in the market all of the time.
The excel posted shows a scalper going in and out of the markets. He does scalps for one reason: to make money. If he isn't he exits and waits for the next opportunity. 1 or 2 cars makes 7,000 dollars a day this way. It it possible to have a losing day trading this way? I don't think so.
What would it be like to slow down the scalping and just reverse on each turn of the markets. It wouldn't be just be BO trading, but it would include BO's, failure to BO, retraces and bugaboo whipsaws. This would turn the bugaboo whipsaws into a series of profitable segments.
There is always someone on the other side of bighog's trades when he cuts losses short. Look at the excel and see how much time price moved when the scalper was sidelined. Debrief and look at how the losing trades could have been cut short.....or reversed to make some money. Debrief the excel by circling the BO trades and note how the exit on the BO trade was done. Lots of ways.
The last exercise gives you a good picture of just how poor doing BO trading as the only trade really is. It is okay to think that BO trading is the greatest. It isn't as has been shown several ways but it is okay to think it is for a while until you are able to move on...... LOL..
I gotta agree with you. These huge ranges are just way too much to handle by my standard strategies. I lost 7k this week which is by far one of my largest for the year. I'm back to break even this December so I'm pretty much way behind my target for the year. I love the volatility in August but not the ones we're seeing in November-December.
