Please rate my strategy

Discussion in 'Trading' started by shainadir, Jun 17, 2009.

  1. I'm a new trader and am trying out different strategies trying to find my niche...

    I use in the evening looking for stocks that are trending up or down. I pick 4 or 5 stocks both long and short that appear to be good candidates.

    At the opening, I will wait to see what the trend of the day is. When I see a stock that I'm looking to short at what seems to be the high of the day, I will use a ma(10) for an entry point with the 5 minute candle closing below the line. For a stop I will use the ATR x1.5.

    Please give me some suggestions on how to minimize my risk and maximize my gains. Thanks.
  2. spinn


    why not use tick or volume charts so the price doesn't spike during those five minute bars?
  3. You need to explain your strategy in more detail. You say you wait to see what the trend of the day is. Leaving aside how tricky that can be, are you looking for an uptrend to go long and vice versa for shorts? Then you said you wait for the high of the day to short. How do you determine that?

    What is your time frame for holding? How do you decide to exit? What will cause you to exit early?

    Buying pullbacks in uptrending stocks is a time-tested approach, at least in a bull market. Shorting downtrending stocks in my experience is far trickier.
  4. you may be rely on your crystal balls too much. i mean how can you know in advance?

    i can challenge you with the following statement: if you do random entry, at 2pm, and have a maximum holding period of 1.5 days (i.e. exit at the close of next day, at the market, if your profit target has not been hit), and trade in the direction of the trend (established by relevant moving averages)

    this may do no worse, or even better than a mechanical system which tries to guess, more or less, using one's own crystall balls, or whatever, the direction of the market.
  5. To calculate the high, im adding the atr to the low at the time im ready to trade. If the price bounced off the high end of the atr, ill use that as the high and go short from there.

    Im new to trading so if my theory is way off, please let me know. Thanks
  6. i don't have a lot of real trading experience, so i'm not in a position to provide advice. anything with the words 'frequent trading' in it scares me. i did some backtesting on the ES and YM and stopped in horror.

    that said, i think atr/kettler channels is one of the better tools out there. i think you have to know their limitations though, they tend to work better when the stock is trading in a range, but when it breaks out, i don't know. it's important to understand market structure, and what instruments are appropriate when.

    don't underestimate psyhology, emotional discipline is very important. stay focused. always
  7. If I understand you correctly, you are shorting when a stock in a downtrend rallies to (low of the day + ATR). Basically, you are looking for a failure high. I've never backtested that, so i can't say with any certainty how it will do. On the one hand, you may catch a stock that is extended intraday. On the other, you are shorting a stock that is showing a certain amount of strength. Generally, I would prefer shorting something that is showing weakness on the day, not strength, (or buying something that didn't pull back much at all.)