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Dimitris Tsokakis
P. S. A friend of mine (and I write this with his permission), has the following
...funny problem : He bought at December 2001 cross(RSI,30) and he is still
waiting a cross(70,RSI) to sell. Does any body knows when and if he will close
this great trade ? The RSI reached two or three times at 67 or 68 and turned
back.
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<DIV><FONT size=2>Here is one possible explanation, why the two new
systems are more</FONT></DIV>
<DIV><FONT size=2>profitable. In many cases you are protected from wrong
entries.</FONT></DIV>
<DIV><FONT size=2>Look at the long term decline, (nearly 10 weeks) from PEAK
to</FONT></DIV>
<DIV><FONT size=2>TROUGH.</FONT></DIV>
<DIV><FONT size=2>First chart is Modified RSI with Dbuy-Dsell steady
levels.</FONT></DIV>
<DIV><FONT size=2>Below is the new RSI Bollinger Bands system.</FONT></DIV>
<DIV><FONT size=2>1]. All this period, RSI crossed some times 30, whithout
result, but in</FONT></DIV>
<DIV><FONT size=2> both systems you were TOTALLY OUT OF
THE MARKET, protected</FONT></DIV>
<DIV><FONT size=2> from a 50% decline.</FONT></DIV>
<DIV><FONT size=2>2].The ENTRY points are quite reasonable, if you look the
trend and not</FONT></DIV>
<DIV><FONT size=2> the artificial 30 or 25 or anyother
level. In both systems, entries occurred at</FONT></DIV>
<DIV><FONT size=2> RSI~20.</FONT></DIV>
<DIV><FONT size=2>3].EXIT points are also reasonable and occured at RSI levels
~50 for both</FONT></DIV>
<DIV><FONT size=2> systems</FONT></DIV>
<DIV><FONT size=2>4] The last period, RSI crosses again 30, but you are still
out of the market,</FONT></DIV>
<DIV><FONT size=2> waiting in cash for a new signal.
</FONT></DIV>
<DIV><FONT size=2>There is no need to be a prophet to</FONT><FONT size=2>
understand the following ELEMENTARY</FONT></DIV>
<DIV><FONT size=2>things: </FONT></DIV>
<DIV><FONT size=2>With 30/70 system you have already buy and wait at point X. If
the stock drops </FONT></DIV>
<DIV><FONT size=2>down</FONT><FONT size=2> (which will not surprise anybody),
you will be again out of [30,70] and </FONT></DIV>
<DIV><FONT size=2>stay with what you bought or buy again, according to your
trading tactic.</FONT></DIV>
<DIV><FONT size=2>With the new systems, you wait sellers to loose their power
and find a better</FONT></DIV>
<DIV><FONT size=2>entry (perhaps).</FONT></DIV>
<DIV><FONT size=2>In the mean time, you may see some friends, drink a beer,
write to the mail-list</FONT></DIV>
<DIV><FONT size=2>and think about some new system to understand the Market
better.</FONT></DIV>
<DIV><FONT size=2>What do you think about ?</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Dimitris Tsokakis</FONT></DIV>
<DIV><FONT size=2>P. S. A friend of mine (and I write this with his permission),
has the following</FONT></DIV>
<DIV><FONT size=2>...funny problem : He bought at December 2001 cross(RSI,30)
and he is still</FONT></DIV>
<DIV><FONT size=2>waiting a cross(70,RSI) to sell. Does any body knows when and
if he will close</FONT></DIV>
<DIV><FONT size=2>this great trade ? The RSI reached two or three times at 67 or
68 and turned</FONT></DIV>
<DIV><FONT size=2>back.</FONT></DIV>
<DIV> </DIV></BODY></HTML>
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