Your friend's idea is only stupid for one reason, and it's not commissions. It's because there is no stop loss.
Yea, I told him that... He may win 30 trades in a row, but the one trade he loses will cost him 30 handles... LoL!!! I dunno though. A lot of the information out there is false. I knew a guy who couldn't make money with a 1 handle stop and a 1 handle target. Then he started making money steadily with a 2 handle stop and a 1 handle target and put in a LOT of trades through a day... The problem with trading for very small amounts is that the market noise screws you up. Personally... I trade with the market. If the market is trading with a 50 point range per half session... I simply don't trade it... If we have a nice half session range of 10 handles with a trading range around 3-5 handles that is where I am at my best! What I have found is that to effectively trade you need a stop that is 75% of the short term trading range, and you need to try to capture at least 75% of the trading range per trade. You can lower your stop to 50% as long as your timing the tops/bottoms well enough with no worry of market noise clipping it. Best to trail your stop down a bit locking in a profit once the cycle starts to move so you don't get stuck when the market shifts back into the next trading cycle. So, if the market is trading with a 5-6 handle short term trading range. Four handle stop, four handle target. Either trade the tape or wait for different conditions... I like medium speed bull market rallies. They maintain my favorite trading range. The very high internals trending rallies are ridiculous with their compressed sub 2 handle trading range... Only thing you can do in those conditions is buy and hold... Selloffs never have a small trading range even with internals trending like mad... They are also a bit random and chaotic...
no athlonmank8, everybody gets what he is saying except you. So that makes you the odd man out. There use to be a casino out at one of those Indian reservations in New Mexico. All I had to do was show up and they would make phone calls and within 20 minutes they would have a full table of retired poker players. Like the old saying goes, "If you don't know who the mark is, it is you."
The indicator definitely works well in stable/uptrending chop as I knew it would, but I have to use a different technical analysis system to time the big morning/evening moves with any accuracy. This shall be referred to as the LUNCHTIME system...
Unless we have rally internals by 10am tomorrow I am putting this fun toy away until the next uptrend... Hourly/daily getting a little extended... Maybe tomorrows news can catalyze a fun little rally. We shall see!!! Were not "Bulls are screwed" overbought, but give it a few more hours of medium strength uptrend and were there... I ain't bidding on no dips higher than 1325... Is this pattern making anyone else dizzy or is it just me?