Why wait for a pullback?

[easymon1]

"If they can't knock the Top out of it
they'll try to knock the Bottom out of it." Tom O'Brien.

 

[stochastix]

My backtesting experience has been similar to yours... it's of course impossible to know what is a pullback and what is a trend change without further context. In such a case, you might as well go for maximum trend strength if that's your only signal.

The 'theory' is something like this: Stocks tend to like to pull back a lot (mean revert). Entering on a pullback affords a more narrow stop should the wider trend persist, which makes the RR ratio more appetizing. E.g. a common occurence when entering a hyperbolic gone midcap stock is that it decides to make a 25% drop from highs before continuing. Now, if you can actually make out what is a pullback and what is a trend change in some way, it makes good sense to buy the dips. But my dumb technical systems couldn't, it was just noise fitting.

Alternatively, trade without stops (risk manage/position size accordingly) and be happy because now you can't be forced out of positions.

Just IMHO. I'm sure someone with an entirely different view than mine will chime in.

stocks are not mean reverting, that means something specific your just spreading bullshit to idiots too stupid to know any better

 

[Blitzjoker]

What timeframe charts do you like to trade?

I daytrade the 5 minute timeframe, mainly the Dow, NAS100 or SPX500. I have recently been doing ok, using an automated system with occasional manual intervention, though I am working on limiting that to a minimum, as I have discovered I am a useless discretionary trader.

 

[easymon1]

I daytrade the 5 minute timeframe, mainly the Dow, NAS100 or SPX500. I have recently been doing ok, using an automated system with occasional manual intervention, though I am working on limiting that to a minimum, as I have discovered I am a useless discretionary trader.

Sounds good. Which weekday gives your system the best yield on average? Wednesday here, so far in 2023.

 

[Blitzjoker]

Sounds good. Which weekday gives your system the best yield on average? Wednesday here, so far in 2023.

I haven't investigated in detail, but my impression is I do best on a Monday (or a logical Monday as they used to say when I had a proper job - i.e. the first trading day after a holiday).

 

[Snuskpelle]

stocks are not mean reverting, that means something specific your just spreading bullshit to idiots too stupid to know any better

You're right, I will avoid using the term like this and it's technically incorrect.

There tends to be a semantic difference to quants vs discretionary/idiot system traders (that I unfortunately remain), where mean reverting is a lazy way of saying propensity to a pull back (I assume you would simply call this high volatility compared to underlying trend in quant lingo).

True, e.g. a stationary spread can be properly mean reverting in the quant sense whereas stocks are far from it under current market conditions. But this thread was not quant oriented, hence I got careless. And you're absolutely right I shouldn't be encouraging to use the term like this anyway.

You're one of my favorite posters stochastix and I appreciate your retort even if mildly toxic as per your usual way of communication.

 

[themickey]

That's why testing your own ideas seems very important to me.

Testing your own ideas is like being your own psycho coach, or trying to lift yourself by bootstraps.
I won't say it can't be done, but the usual best way of learning and changing is via a dirty four letter word, "pain".

 

[stochastix]

You're right, I will avoid using the term like this and it's technically incorrect.

There tends to be a semantic difference to quants vs discretionary/idiot system traders (that I unfortunately remain), where mean reverting is a lazy way of saying propensity to a pull back (I assume you would simply call this high volatility compared to underlying trend in quant lingo).

True, e.g. a stationary spread can be properly mean reverting in the quant sense whereas stocks are far from it under current market conditions. But this thread was not quant oriented, hence I got careless. And you're absolutely right I shouldn't be encouraging to use the term like this anyway.

You're one of my favorite posters stochastix and I appreciate your retort even if mildly toxic as per your usual way of communication.

fuuuuk u..and ill see ya tomorrow nice clarification tho.. nothing matters im in pain and grumpy per usual

 

[deaddog]

If you are going to wait for a pullback at what point do you enter a trade.
Say a stock breaks out at 100. Do you wait until it pulls back to less than 100?

 

[murray t turtle]

If you are going to wait for a pullback at what point do you enter a trade.
Say a stock breaks out at 100. Do you wait until it pulls back to less than 100?

%%
No not in this market usually;
AMZN did that this year/i found some things better.
But they did buy it today around $98 area, so there can be more than one right answer