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Hi b,
Tuesday, July 23, 2002, 1:22:33 PM, you wrote:
b> Yuki,
b> Thanks for the insightful post on how to enhance trading with the
b> StochRSI. I hope to try out some of your ideas.
My pleasure. Just some observations from an old girl who has
survived long enough to have some opinions. :))
I have to confess, however, that I don't filter very much when it
comes to actually trading my own account. The reason? I use a short
term oscillator very, very close to what Steve is using, and on the
small basket of stocks I use it with, I can easily improve percentage
winners with a filter (can crank it up significantly above 60
percent) but only at the cost of a LOT of net profit. So, for me it
pays to take the counter trend trades, even though a higher
percentage of them are going down the tubes than the on trend trades.
But . . . and it's a big but, I don't enter a counter trend trade
without a very well defined and logical exit point that is not very
far away (if I can't easily see it, or I think it's too far away, I
pass). So I don't suffer the large draw downs, because . . . I'm
gone. Even with on trend trades, I have my bail points; it's just
that they are going to be a lot looser, because the market is going
to have to prove to me that I was unlucky enough to bet on a trend
resumption or continuation at the exact moment that the trend
reversed. When I'm betting against the trend, however, the market
only has to bluff me by raising once. No problem in that case; I'm
gone. Ante up. Next hand please.
And, of course, you can more easily and with higher odds let an on
trend trade ride when things look good, while an extended counter
trend ride is making the longer odds bet that you caught a reversal
at just the right time, which isn't going to be the case most of the
time, and especially if you take a lot of counter trend trades.
Try filtering or optimizing this way:
If trade is on trend, exit in X bars;
If trade is counter trend, exit in X-Y bars;
All this means (sob, sniff) that I am not truly automatic, as I would
dearly love to be. But then, I don't know anyone who really and
truly is automatic, either. Some get close, maybe even very close.
But I don't know anyone who can do this with brain switched
completely off. But oh how I wish. :))
Best,
Yuki
mailto:yukitaga@x...
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