What is the simplest trading strategy?

Discussion in 'Strategy Building' started by kut2k2, Oct 1, 2014.

What is the simplest trading strategy?

  1. moving average crossovers

    6 vote(s)
    33.3%
  2. Donchian channel breakouts

    4 vote(s)
    22.2%
  3. other (please specify below)

    8 vote(s)
    44.4%
  1. kut2k2

    kut2k2

    My vote is for Donchian channel breakouts for two reasons:

    It can be reduced to a single parameter.
    You can avoid that stop-and-reverse nonsense.

    DCB strategy:

    Go long when the current close equals the n-day highest close.
    Exit long when the current close touches or falls below the median price.

    Go short when the current close equals the n-day lowest close.
    Exit short when the current close touches or rises above the median price.

    The median is the average of the n-day highest close and the n-day lowest close.
     
    Last edited: Oct 1, 2014
  2. Buy and hope.

    Sell and hope.

    Can't get any simpler.
     
    brdalloca likes this.
  3. the simplest strategy is to buy or sell with the trend. seriously. this is it. does not get any simpler.
     
  4. kut2k2

    kut2k2

    Sadly, hope is not a strategy.
     
  5. kut2k2

    kut2k2

    Trade With The Trend is a great metastrategy but to implement it, you need something more detailed.
     
  6. dom993

    dom993

    I would say the *simplest* strategy is the Opening Range Breakout ... it is kinda variation on the theme buy/sell & hope, with no guess-work on whether one should buy or sell.
     
    eusdaiki likes this.
  7. kut2k2

    kut2k2

    What are the details of the ORB strategy?
     
  8. dom993

    dom993

    ORB:

    - pick a time horizon for your trades - classic is day, but that can be just as well weekly, monthly, or hourly
    - define how long the Opening Range will be - this is the main parameter
    - once the Opening Range is set, place a stop order just outside of the OR in each direction - the distance from those 2 stops to the OR is the 2nd parameter
    - when the trade is entered through one of those 2 stops, the other one becomes the trade stop
    - exit at the end of the time horizon - or when stopped

    The classic usage of ORB uses 1-day as time-horizon, and anywhere between 5-min .. 1-hour to define the Opening-Range.

    Lots of additions can be made to the basic ORB strategy, in particular:
    - trade management (although in most cases, it will defeat the purpose, which is to capture trend days when they occur)
    - trade selection (for example, use an NR4 or NR7 filter, so that ORB is only used after a period of volatility reduction)
     
  9. kut2k2

    kut2k2

    You seriously think this is simpler than Donchian channels? uh, okay.
     
  10. Other:

    Use volume to determine turns.

    Analyze what action to take on a turn: reverse, early entry, hold thru or sideline.
     
    #10     Oct 3, 2014