To start, you need to find an indicator you love. Say MACD. Actually, don't use MACD, it sucks. But something. Then you have to find the thing you want to be the signal. Figure you will be using CCI. CCI is a function that tells you how far price is from a moving average. Assume your signal is when it turns from negative to positive. After this you need the percentage of time that movement happens after this signal. After getting the signal, does price go up and with what frequency? How far? Does price go down instead? How much? What times of days does this transpire? Calculate this. Figure out your exit strategy based on price movement when you get your signal. Are you going to sell after a certain distance or after price does a certain thing? Are you going to scale in? Are you going to scale out? Done.
Have you figured out a way to program market context? It is the hardest thing to program. I have only been able to do it slightly at an instrument level, by adding another higher timeframe layer. however, some context like cross market ones, are very very hard to account for. Take this for example: My "custom" indicator alerted me to a euphoria in cad mid last week. the chart fullfilled all the conditions I look for in a girl & I asked for her number. however, the dominant macro theme for the day was dollar weakness. majors looked like they were pulling back from their strong uptrends. minutes after my entry, euro & cable kept surging to fresh highs, while my trade's best updraw only reached 33% into my target. knowing this, I had to pull my stop to breakeven & was taken out. There are so many variables for market context, that I can only conclude, are as predictable as a girl blowing hot & cold signals that she's interested
I agree.. in a way, trading is my beer buddy @Handle123 I see from your other participation that you are full fledged program. how far do you go when you consider market context? across instruments? for my eg. above, I considered cross checking correlated instruments are not making the same directional move
Individual instruments, make my own Indexes of same stocks that are offering about the same market content, so say one stock is in a downtrend, be foolish to include this stock in Index to be buying my Index on a signal. So we have same views on directional and does help me when it comes to dancing options around the positions, erk out a little more. If it going for swing trade, then I will buy non-dividend stocks but if possible for longer term, has to be dividend providing, much tougher now than 2009 as percentages are smaller to today's price, so getting one percent to new positions isn't much, but still is 1 %, often times though my core is from 2009, those holding it not 1% and much larger compared to when first bought. I see USA starting a new Bull market as the reduction taxes for corporate was huge and believe there be more building of factories coming back.