Look at any chart. Put a couple of indicators on it. You will be amazed how the indicators mark every turning point. Why cant you just buy every time the indicator dips below 20 or sell every time it soars above 80? It just doesnt work real time as you probably know by now as Im sure you must have tried it with your system, at least on paper.
Come on man, spare me the cliche trading mantras. If I'm going to totally convince myself that it works I have to get some criticism first. There has to be people out there saying why it doesn't work otherwise it's too simple so everyone would be doing it.
indicators are garbage, i love pointing out how often they fail. That's why I'm looking for criticism here with this strategy,.
I just discovered it now because it's bascially the exact opposite of what I'm doing, which is trying to buy momentum. I'm sure your strategy works too actually because your stops are wider, you just have to sit there and sweat it out if you're long while this strategy either stops you out immediately or hits your target even faster. Most of the time it hits your target. I don't know, I can't figure out anything wrong with it yet but I've only been looking at it for about an hour. I wish someone could come on here and give me some real criticism.
Billy, Do you have any code available? I'd be interested to evaluate it on the YM and see if you're overlooking anything. RoughTrader
So are you proposing to have a running bracket trade that's set to sell 10 YM ticks above the 1 min close 2 minutes ago, and buy 10 YM ticks below the 1 min close 2 minutes ago? The entry bracket would then adjust up on bar with each new minute. One reason that indicators work poorly for scalping is that they inherently lag price. In theory you could set up an automated scalping bracket (with OCO profit target/stop loss upon entry) to make the entries to catch the extremes. Doing it by hand may be a bit tough (and tedious if adjusting with the progression of each minute).
Which institution are you talking about, the Free Housing for the Mentally Retarded or the Former Traders Who Blew Up?
NO, the signal you're saying here is very different than mine because the point of this strategy is to capitalize on very quick noise. If something holds up 10 ticks above where it was more than 2 min ago, shorting might not be that great of an idea. We're working with seconds. Here is how the signal is given: either you place the sell order 10 ticks above the open of every 1 min bar (hard to do, you'd need a stopwatch, and tedious because it doesn't happen very often) or this: you must have a green 1 min bar, it doesn't matter what size. Once that bar is closed, a sell order is placed 10 ticks above the low of that bar. Your stop is 10 ticks above and your target is 10 ticks below. Within the range of 7-9 ticks, trailing stops/targets are placed. If you're short and it's 7-9 ticks in your favor, you set a trailing stop at 1 tick profit. If it's 7-9 against, you work to get out even or take the initial 10 tick stop loss. And no I have no clue how to automate this, I wish I did. If you know anyone that can do this for me, I'd be ecstatic. I agree that it would be a little tedious.
Oh, and this is 100% shorting, there's no buying. I failed to mention that, thought it was presumed from what I was saying before but maybe not. Buying dips does not work with this, we all know why.