1. Portfolio of 10 noncorrelated low beta stocks.: Yes, but higher volatility. Recently have gone to 6-7 stocks. 2. Stop and reverse system with longs going to shorts at low of previous day and vice versa.: Pretty much, most swing systems use H/L as entry exit, I do like to flip though rather than pursue another setup. You need GOOD stocks for this otherwise you can be eaten alive like you said. I find more NYSE stocks that work well with it than NASD, but its hard to find the volatility so I use mostly NASD stocks. 3. No timing or exit strategy other than stop and reverse at previous days high or low.: Intraday exits based on support (10,15,30,60 min bars), but new positions pretty much entered on H/L. I am curious how far back you tested this system. It has a lot of appeal, but I would worry about getting chopped up in a sideways market. Tested for last couple years over 30 stocks and it was very profitable, less so now. Also 4-5 years back it worked a little better than now. Key is catching big moves (20%+) in stock and not taking profits too early, otherwise the sideways action gets expensive. If I have 500 shares in a stock, I ride it all the way to my exit, no paring in and out. Can't say for sure that strategy is superior to paring in and out (I've tried both), but it seems to be.
Jeffo, You posed a question for me about three pages back concerning S and R. I think it depends a lot on your time frame, but I think important S and R levels tend to occur around prior areas of price congestion, daily and weekly highs and lows, important swing highs and lows and gaps, particularly large gaps. I also think the daily pivot lines frequently offer S and R. Trading breaks of S and R appears logical and it does work well in a trending market, but you have to remember that floor traders, particularly in the futures, make a living out of running those levels.
Like the candlecharts entry,above the 8,50 period moving averages,especially the 8,do look at 200 periods.An elite trader mentioned hour charts,like the way the Nasdaq hour candlecharts green up more ,when that good stock is above its 50 day moving average;Possibility of smaller risk.Study,do more research,real time, lots of time on moving averages.;enjoy it. Still testing when have a small profit,whipsaws happen . TRY to enter on reasonable momentum(price speedometer . To borrow (non margined] some words,written by Dr.Van Tharp,Jack Schwager,testing whether to trade like turtles or cheetah or mountain lion.Sure you can let swing profit ride flat market,if you have it................................................................................
Baruch, please don't take this as criticism as it's not intended to be, but did you notice that this thread is 2 1/2 years old? I have noticed that you have a tendency to open old threads a lot, and reply as if they were started yesterday. I'm not sure if you are aware of this. ProTrader has not had a post in over 2 years. (at least under that alias ) IMO, there is nothing wrong with opening old threads as a subject can get a new round of discussion.
This trading mythology is DANGEROUS to newbies. The hardest part of trading is FINDING AN EDGE. After you do that, you must have proper money management and the psychological fortitude to FOLLOW YOUR SYSTEM. If I gave you a set of rules with 90% win rate and a pfactor of 20.0, I guarantee the psychology part would be TRIVIAL Psychology and money management are NOTHING without a real edge, or you could make a killing playing roulette. peace axeman
O, the sober voice of truth. ET is a snakepit, would you go looking for knowledge in a snakepit? Please. BTW ddefina what happened to your little fund?
Simple definitely is best...Since '95 I've tried most every known combination of two to three different indicators as well as some that I dreamed up myself using mostly 90% technical and 10% fundamental data. Two years ago I decided to cut down to two indicators. The ones I use are the 3 EXPONENTIAL MOVING AVERAGES set to 3-6-20 and the MACD set at 3-10-1. I use one as a Possible Setup and the other as the Trigger. And it does'nt matter which crosses first. I stay in the market all day buying or selling whichever the case may be, or as the saying goes, "changing horses in mid stream." Needless to say since I trade with 5 minute charts I ride alot of horses during the day. I trade strictly Currency futures-no crosses. I do look at the daily charts, 60 minute and 30 to make sure what the overall trend is. It seems alot of traders use the 30 and 60 minute timeframe to enter the markets and I do take note of that. I also have found an excellent program that automatically enters trades for me without me having to even touch my computer. This has proven to be very beneficial because it does'nt hesitate like I often do. I've spoken to many Brokerages about Automated Trading Systems and all of them have told me that they had nothing like that because of the possible legal liabilities involved. Well one does and it really has been an improvement to my "REALLY SIMPLE SYSTEM." The initials of the company are AF. I wont say the actual name because I don't like advertising for others as I don't get paid for it...that's not my job. I wont even wear a baseball cap with someones logo on it. Nevertheless, that's what I use to trade with. For me...Simple IS best!!!