Is this a lucrative strategy?

Discussion in 'Strategy Building' started by Drew07, Feb 19, 2008.

  1. Drew07

    Drew07

    I don't recall mentioning any of those publications is my OP...
     
    #11     Feb 21, 2008
  2. I don't think he meant to demean your post. New trading ideas are rarely new, only new to the new-guy. It's exciting, but the veterans (not me) have probably seen it, or a variation of it, before.
     
    #12     Feb 21, 2008
  3. The high (low) over what period of time? Time is important as it implies the size of the move.
     
    #13     Feb 21, 2008
  4. you might want to look into divergeances with those double tops and bottoms you wanna trade. If when the prices are heading for the high or low you want to fade, watching for a diver on some oscillator (like the 20 period cci for exemple) might put the odds more in your favor.
     
    #14     Feb 21, 2008
  5. Drew07

    Drew07

    Today yielded another pretty good example of what I'm talking about. Notice the first 4 pushes upward making higher highs. When the 4th push fails to reach the previous high it provides an ideal entry for a short.
     
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    #15     Feb 27, 2008
  6. Each of those pushes required a unique stop/target to keep you in the trade and also book a profit.

    So, how do you arrive ahead of time at which one to use?
     
    #16     Feb 28, 2008
  7. Here is the same kind of situation on an ES chart for today. It's a P&F chart, but you will see a failed double top followed by a little more than a 4 point move. Each box is .75 points. I managed to catch 3 of these points.
     
    #17     Feb 28, 2008
  8. Drew07

    Drew07

    Since I didn't trade that live I don't have a good answer for that. A combination of watching price action and judging by the previous high possibly?. Maybe HolyGrail can post what size stops he uses for these trades since he seems to have it figured out pretty good.
     
    #18     Feb 28, 2008
  9. My stops are really dependent on volatility. So far this year the market is fairly volatile so my stops are normally somwhere between 2.25 and 3 points. It also depends on which chart I box size I based my trade. I use three charts types, a .5, a .75, and a 1.0.

    Multiply each chart by three and add a tick. That is what it would take for a reversal column to appear. If I am using a pattern on the .75 chart my stop would be 2.5 points away. 3.25 points if it was on the 1 point chart.
     
    #19     Feb 28, 2008