Simple Profitable Method

Heres a Hershey quote from the Stochastics thread:

"When can you reverse? Not until you are making about 150,000 a year per contract on the ES."

 

Guys, if you want a free realtime chatroom for this system, if any follower of this system uses Ensign, that trader can open a room in EChat. Then anyone not using Ensign can download the standalone free version of EChat from Ensignsoftware.com and log into the room. Charts can be posted live even if you don't use Ensign, and if you download Ventrillo you can voice chat live too, and all for free. Obviously it's all easier if you use Ensign - control-J posts the screen, but a number of traders in Buffy's Bline room use other sw eg eSignal GET, TS, free internet charts etc.

 

So why would he mention that then? Here's another quote from that thread:

"When you slip out of the trade, the stochastic is headed out of overbought and NOT to a reversal. Now that it is gone from "overbought" it goes to one of two places. the first place it must hit is neutral. From neutral it can chosse to reform into the prior trend (rezoom as they say) or cool off from the prior trend into an opposite trend. No reversal here though neutral comes first."

That is more along the lines of what I was thinking. I havent looked at the charts yet, but it seems like it would be too difficult to differentiate between an actual reversal and a small retrace.

 

Search ET for "Failure to Traverse" or "FTT" in an effort to understand how to differentiate between a retrace and a reversal.

- Spydertrader

 

What is it about simple that everyone finds so complex?

 

I'm with you, find a simple way to trade and milk it for all it is worth.

 

Actually I also agree. I use the MACD and 9SMA nothing else.

But I am also interested about looking into the reverse method instead of just exiting. Whether or not its feasible with the market and time frame I trade I dont know. It may just make things complicated.

 

I have not looked into it but seeing as the market does not just go up and down but spends a lot of time consolidating etc I doubt it will produce great results

 

Ive been looking at charts all day, and it's just too difficult (at least for me) to determine whether or not a reversal is happening, or just a quick pullback...

 

Draw in Some trendlines using the methods Jack described. Observe Volume changes (gaussians as Jack calls them) and watch for the FTT (Failure to Traverse). With some practice, "to difficult" transitions to "rather reasonably."

Good trading to you.

- Spydertrader