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Old 12-17-2008, 09:52 PM   #9

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Re: Looking to Enhance Current *working* Trading Methodology

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I would guess you place your stops in strategic areas so that you are only stopped if the reversal formation fails (and ideally price doesn't reverse). Do you play the failures of the formations at all?
Hi jonbig04,

Yes the stop of the reversal formations would be a new high or low of the day.

I don't play the failures as this would constitute buying high or shorting low.

Great to see someone out there that trades similar!
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Old 12-17-2008, 10:01 PM   #10

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Re: Looking to Enhance Current *working* Trading Methodology

Oops... yes low accuracy is what I meant.
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Old 12-17-2008, 10:10 PM   #11

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Re: Looking to Enhance Current *working* Trading Methodology

Thats true, people always laugh at me for shorting the LOD or buying the HOD. IMHO accuracy is irrelevant as long as you keep your losses small and let your winners run, eg favorable R/R (which I noticed you do). The traders I look up to don't really have that high of an accuracy at all, but as you said they are disciplined and let their winners run. For me personally, to keep r/r in check I have set targets which are multiples of my stop. 3 targets each at a minimum of 4.5x, 9x, and 13.5x of my 3 point (NQ) stop, usually I play around with it and have them and key levels if I can. My accuracy was around 30%-33% last month, but this month has been tougher and it's been lower (especially this week and last week). So anyways I said all that to say, why are you looking for higher accuracy? What's wrong with the ultra low risk, high reward trades that you're doing? Have you considered adding on the pullbacks once the reversal has panned out? I'm just a noob, but I think we have some common ground in the way we trade.

BTW I'm researching M tops and W's right now, where did you go to learn about them? I'm sure there are plenty of places, just wondering if you know anywhere specifically.
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Old 12-17-2008, 10:13 PM   #12

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Re: Looking to Enhance Current *working* Trading Methodology

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Oops... yes low accuracy is what I meant.

Yea, if I had to guess I would say her trades aren't high risk at all. From what I see, reversal formations can allow ultra small stops and ultra high (1:10 or much more) R/R.
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Old 12-17-2008, 10:15 PM   #13

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Re: Looking to Enhance Current *working* Trading Methodology

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Originally Posted by jonbig04 »
Thats true, people always laugh at me for shorting the LOD or buying the HOD. IMHO accuracy is irrelevant as long as you keep your losses small and let your winners run, eg favorable R/R (which I noticed you do). The traders I look up to don't really have that high of an accuracy at all, but as you said they are disciplined and let their winners run. For me personally, to keep r/r in check I have set targets which are multiples of my stop. 3 targets each at a minimum of 4.5x, 9x, and 13.5x of my 3 point (NQ) stop, usually I play around with it and have them and key levels if I can. My accuracy was around 30%-33% last month, but this month has been tougher and it's been lower (especially this week and last week). So anyways I said all that to say, why are you looking for higher accuracy? What's wrong with the ultra low risk, high reward trades that you're doing? Have you considered adding on the pullbacks once the reversal has panned out? I'm just a noob, but I think we have some common ground in the way we trade.

BTW I'm researching M tops and W's right now, where did you go to learn about them? I'm sure there are plenty of places, just wondering if you know anywhere specifically.
Yes, with a risk reward ratio of that nature you can't go wrong, over the course of time the equity curve will surely grow.

The reversals I just learned from studying thousands of intraday charts, once you study enough, they tend to stick to you.

I don't add to trades, when I do that, my position is unprotected. Hence, why I only initiate from extremes.
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Old 12-17-2008, 10:30 PM   #14

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Re: Looking to Enhance Current *working* Trading Methodology

I see. I do believe though that you can trade intraday and still have your stop protected. I enter on the pullbacks of the trend now. The majority of the time (except for 2 times last week) when I get stopped out its because trend is changing, or heavily congesting (chops been killing me lately). In other words, when I'm wrong usually I enter in such a way to where if I do get stopped out, price has to break through S or R in a major way, which in turn gives me more valuable information about where it may be going next. IMO there a quite a few ways to have your stop protected by price action. For example, (this is what I aspire to do anyway) lets say price runs into major R and an M top forms and price reverses, you could wait for it to reach a previous S level, wait for it to either break or reverse again. Assuming trend continues and it breaks through the S, you could then enter on the pull back to that level which is S, but now has flipped to R. Your stop could be well above it and therefor protected. Thats all I've been doing. Not the reversal part, but the flip scenario. To me, this is an example of a protected entry during trend. A lot of the time when I get stopped it's because my rules are too strict and the "break" of S was just a bend and its actually going to respect that level. But, for now, strict rules are necessary.
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Old 12-20-2008, 05:57 PM   #15

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Re: Looking to Enhance Current *working* Trading Methodology

Check out the link below. It explains the use of a 10 minute MA on the 1 minute NYSE Tick.

Countertrend Trading the SPY's using the 10 MA Tick: I've found that when the 10 MA Tick > 500, you can look for a reversal to the downside and when the 10 MA Tick <- 500 you can look for a bounce to the upside.


http://traderfeed.blogspot.com/2008/...g-average.html

"I find that a 10-minute moving average of the NYSE TICK removes much of the noise from the one-minute values."

Hope this helps with your countertrend trading.
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Old 12-29-2008, 05:15 PM   #16

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Re: Looking to Enhance Current *working* Trading Methodology

Susana...

Patterns that form at key areas have a higher probability of producing a significant move which will effect your accuracy, patterns that form outside of key areas have a higher probability of failure because they are most likely noise and will not attract lots of market participation.

Understanding what are "key areas" (regions) can shed a lot of light on why some patterns take off witout looking back and others fail. A good starting point is to study past patterns that where sucessful.



Regards..
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