The appropriate rule to use is the Nth Day Rule which only buys on the lowest day of the series. The -Nth Day Rule applies for shorting extended up moves
Yes, I too have found that the rule of N+1 is the most reliable trading rule out there. All that's left is to decide the correct value of N. No doubt a piece of cake for bwolinsky.
Sorry, I'm only familiar with The Bronski not The Bwolinsky. BTW, the P-1 rule is also acceptable since it indicates timely poitioning 1 day before the Peak day. I'm scouring the web looking for the Size Rule (although I've heard that Size doesn't matter).
what a laugh, very amusing. just when I read through a trading book, did not rember its name. but the book gave out an a very interesting story. he went to pee with other traders, he saw a coin here, and his friend immediately warned and asked him to pee into another place. he feel weird about his friend's unreasonable suggestion, so when out of the batheroom, he asked why? pee in the coin means bad luck. after 7day's drop, next day will be sunny, it is a laugh. superstitution? yes. based on physics iternia law: if an object moves to some direction, if no resistance involved, the object will continue to move in this direction .... that is science.
most people trade based on"wish, hope". while not sound scientific fact, no wonder loss after loss. the most important rule in trading is " trade in the direction of least resistance". we all know human being are not GOD. they are greedy, they are fearful, they are emotional... because of those built in sins, the best profitable direction bet is: things always go bad.
In a brief serious vein, Tom DeMark ceated some technical indicators that involve consecutive up (or down) days. A buy signal for the TD Setup is where you have 9 consecutive bars where the close is less than the close 4 bars ago. A buy signal for the TD Countdown is where you have 13 consecutive bars where the close is less the than the bar low 2 days earlier. Once upon a time I used to look at this for some equities that I traded. The main problem was that there was no magic in the number 9 (or 13). You could have 10 or 12 or even more consecutive bars and you could have to endure some pain before the eventual turn if you took the trade. Or you might get a brief reverse and the pattern would then continue and you'd be SOL on you misdirected trade (see '08-'09 bear). But of merit, in general, with a large number of consecutives up (or down) days in the same direction, you tend to be closer to the top (or bottom).