Buy High, Sell Higher vs. Buy Low, Sell High

Discussion in 'Strategy Development' started by unet1604, Jun 13, 2006.

  1. unet1604


    I would be interested in people's experiences regarding these two trading strategies: Buy High, Sell Higher vs. Buy Low, Sell High.
  2. unet1604


    When I buy low it always seems to just keep on going lower.

    When I have bought one tick above yesterday's high and sell with a 10 cent trailing stop I seem to be doing better.
  3. Why not test it? See which works better: buying new highs or buying new lows. Or buy RSIs over X vs buy RSI under Y. Or something else similar.

    If you are lazy or interest, Thomas N. Bulkowski wrote an article about the subject in the April 2006 issue of SFO.
    This link is for subscribers only:
  4. unet1604


    Thank you for the article link, it was a good one.
  5. Cheese


    Both are shallow mantras of little meaning or use.

    To make profits from trading, what makes you think any buying price is high as opposed to low?

    Accurate trading implies a neutral mindset where the absolute price at any one time is not important. It does not matter if the YM is at 10600 or 11600. The generality is that it is relative price that matters; that is it matters that the price for example moves up 50 points but does not matter at what absolute level it moved from and does not matter at what absolute level it reaches in that example.
  6. i believe in the good ol' buy higher exit higher; you may not get the best price but atleast it's a decent setup&entry. Worked far better for me over the years than trying to get it right at the bottom.
  7. Read The Logical Trader by Marc Fisher.
  8. RSI doesn't work because it's based on averages and ignores the tendency of markets to consolidate following extended moves over the short and long terms. As it consolidates, the RSI becomes less and less accurate as the values which made it oversold/overbought get squeezed out.

    Try to short an overbought RSI and see if it sits still, then goes higher because the relative values are no longer relevant.

    RSI plays do not yeild positive expectacy for this very reason in addition to the fact that one simply has no objective value at which to get out if they're wrong other than some personal pain threshold, which we all know is the absolute worst exit in every case.
  9. unet1604


    Glad to hear of your results.
    I have never shorted, but wonder if similar results could be achieved if buying one tick below yesterday's low?
  10. mg_mg


    Price level shouldn't be a concern here.

    Buy if price will go higher no matter price is high or low;
    Sell if price will go lower no matter price is high or low.
    #10     Jun 14, 2006