The Importance of Simplicity

Discussion in 'Strategy Building' started by Corso482, Nov 4, 2002.

  1. The most back testing I ever did on that was to look back through the last month and by the time I'd written down some numbers for about 2 weeks worth I knew it worked well and just started trading it immediately without any more ado...

    Natalie

    p.s. those numbers were real life - not theory or backtest.
     
    #41     Nov 6, 2002
  2. Cool, thanks again.

    wally_
     
    #42     Nov 6, 2002
  3. Snosur4

    Snosur4

     
    #43     Nov 6, 2002
  4. Thanks again Mike. I am also on the west coast, but being a very night person, I am struggling each morning, so I have to have a simple strategy because I can't think that early in the morning.
    However, I think it could be possible to make this system even better and only a little bit more complex. More about later.

    Now, one more question to you guys: have you noticed any correlation between the first half an hour direction of market's move (yesterday it was up, today down) and the direction in which the breakout will happen?

    Any statistics? With 300 trades, one could probably get some idea how this works.

    My working hypothesis would be that the first breakout is more likely to happen in the same direction as the first half an hour move.

    Thanks,
    wally_
     
    #44     Nov 6, 2002
  5. Snosur4

    Snosur4

    One more thought...maybe Natalie will agree..that on a day like today if we don't get a break before the fed announcement, I will cancel all my orders and not play the break on the news. I have had to many bad experiences with the market intially reacting one way then reversing in the opposite direction.

    Descretion, in this case, is better than valor IMHO.

    Mike
     
    #45     Nov 6, 2002
  6. Hi Snosur4

    It's spoooooooooookyyyyyyy seeing someone say the exact same things. I rarely play the news volatility these days because I've be burned too often. I'm out for the day.... Just watching and waiting.

    Good to see your results correlate well with mine.

    Natalie
     
    #46     Nov 6, 2002
  7. I tried looking at that but could not find a correlation that was reliable enough so I didn't spend too much time looking further...

    Natalie
     
    #47     Nov 6, 2002
  8. But as far as correlation is concerned, I believe (not tested on any reasonable sample) that when the stochastics in 30 min chart (say 15(3), 5) is above 70 before the session opens, it's more likely to get a down breakout, when the stochastics is lower then 30, we are more likely to have an up breakout. As I said, I have not tested it.
     
    #48     Nov 6, 2002
  9. Snosur4

    Snosur4

    Wally....please don't confuse me with the facts.:)

    You may have a point....but it really doesn't matter because whatever way it breaks...that's the trade. The beauty of this system is that you are letting the market dictate the trend not second guessing it.

    I think you will find that sometimes the first 30 minutes are up,down and even more often both. There are many reasons for this.....order imbalances....front running by brokers buying/selling the futures before a big buy/sell on stock..program trades based on previous days close etc. But if there is going to be an intraday trend it will usually be established after the first 30 minutes.

    Anything can usually be improved upon.....please go for it!

    Make sure you share your results with us!!

    Mike
     
    #49     Nov 6, 2002
  10. Snosur4

    Snosur4

    Natalie......I was adopted.....maybe we were seperated at birth.:eek:
     
    #50     Nov 6, 2002