Can you tell us what time frame you use and number of trades (round turns) in a typical day? Thanks, [rwk]
Jack - interesting approach. I understand what you are saying, but you have to identify properly the s&r points. This is really the same issue as indentifying when to reverse in a passive system. As you alluded to, this requires predictive variables, which I do not want in my system. I only use price as a variable. I don't want to dilute it. If I start predicting, it is my opinion against everyone else. Your system is really thinking outside the box though. I like the concept. Are you saying that you use a 1m chart and are always in? How many trades a day?
Sorry I did not see your post. You already answered it. That's a lot of mouse clicking. I like to take a nap during the day.
When you say only use price as a variable, how are you analyzing "only" price? That is where I am now in my latest project (intraday automated trading). I have been studying every trade without summarizing the data into bars -- just pure price. Actually, I don't have every trade because I am using IB's sampled data. But I wanted to avoid the arbitrariness of timeframe and how bars are built. Now I reconsidering organizing my data into price bars. The choices seem to be bars based on time or volume traded. [rwk]
When I say "pure price" I just mean where the price is right now. Not 5 minutes ago or where I "think" it will be tommorrow. To me anyway, non-diluted price is all I really know. Personally, I don't think it matters how you look at it timeframe wise. That is a personal choice. I use the daily timeframe. For instance, today my method generated a long signal on USDCAD based on price only. Price is moving up, so I will get long. I don't care why. Don't care that oil is this or that. Don't even look at what an RSI or Stochastic migh indicate. Don't care that it makes me feel sick to think I need to get long CAD right now. I just do it because price is trending up based on my observations and time frame. That's the best way I can describe it.
That's a pretty good description of "trend following". The problem lies in the two decisions the trader needs to make: How do you recognize when a trend has started, and how do you recognize when the trend has ended. "The trend is your friend -- except for the bend at the end". Using a reversing system has beauty in it's simplicity. The two decisions are combined into one. But that one decision becomes all the more important. The concept of the "now" is a purely imaginary one in technical analysis. The closest thing to "now" we have is the latest trade (or possibly the latest bid & offer). But now is still history, and when we talk about trends, we are really talking about comparing history with older history. Skill is needed to do it well. I hope I am not getting too philosophical here. I'm just thinking out loud. . . [rwk]
I only use price as well...I mean I have to pick a point to reverse of course, which results in only one of two things. It is alot of button pushing but I have an assistant do it. And ur preachin to the choir about naps...ha 130est im on the couch watching Green Acres.
actually Kimble...ha But I do watch Andy. And, Im ashamed to say, that the market has run on me a few times while dozing thru Gunsmoke that comes on at 3. I just cant function without a nap.