Jeanmichel tells me that his system made 40 and 60 points on Mon and Tue respectively (each time on 4 trades per day). However he has not revealed so far whether the system made any gains today. This supports the observation that the system works well on trending days, but not on choppy/whipsaw days like today. I paper-traded it today and made very little progress. That is why it is only logical to doubt whether he had made 20 points a day for the last 2 years using this system. If he did, then there is more to his results than just using the system alone. You can call me a sceptic...
JM... here's a plan. Always fade the high of the first 30 minutes. I read about a guy selling such a plan. Women making 5 grand a month in their spare time. Working less that 1 hour a day... yada yada yada. So I look into it... and I find it works most of the time. Here's a picture attached. Do your homework... I used the QQQ and the NQ for my research.
This might be a goofy question, but how do you know when the high of the first 30 minutes is going to happen?
More often than not it seems to happen around 30 minutes into the session. Give or take 10 minutes. 6:50 am to 7:10 am EST. Some gurus call it the "First Reversal Period". There are some explanations for it I won't go into. It seems to work for sell offs too... you know... XYZ warns ... the futures are down... the session opens and the market ticks down for 20 or 30 minutes. The stocks are a "compelling value" and up it shoots. Seems to me this would work better with QQQ, SPY, DIA or futures.
Just a guess, but after 30 min, you have a finished 30 min time period. Somewhere in the previous 30 min there is a high.. Again it is a simple buy strength and sell weakness.
You said "Again it is a simple buy strength and sell weakness." Not the way I understand it. I think it is fading the strength and the weakness. The volume of the opening only takes it up or down so far. When the volume fades so should the sucessful trader.
Exactly right, selling strenth and buying weakness. Basically looking for reversals. This is not a momentum/trend following system. Not that it is a bad approach, particularly in choppy markets.
Thats what puts traders on each side of a trade. If one was to buy the high or sell the low of the first bar, on that chart you posted, one would have been profitable. If one would have faded the high of the first bar, one would have been profiable also. Fading, top or bottom picking, has caused me more problems than simply buying a breakout of a high or selling the breakout of the low of almost any time frame.