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Jitu,
The system generates additional buy/sell signals when the original
signal with which you decided to trade is now losing.
You then have three courses of action: either exit the losing
position taking a loss and simultaneously initiate new positions or
initiate a new position and exit the losing position at break-even
price or continue to hold the losing position which eventually
becomes profitable and simultaneously add (pyramid/pillar) new
positions at the better price.
Lately I found out that I could have avoided the losing position
altogether if I had optimized my entry points (Market on Open, Low of
Day or High of Day etc.,) depending on the strength of the signal.
This is optimizing, but it is ok, not a crime.
I am yet to come out with an effective stopping methodology. The
original inventor of the system recommends a stop at 1 full point
from the entry point and a 3BSMA from the next session onwards, but I
found that it is better not to use stops on the day of entry and use
stops only on the next session after entry provided you do not get a
new stronger signal to buy/sell. Frankly, I feel that I don't need
stops on the day of entry and I never use one on the day of entry.
Of course, to do this you need absolute confidence in your system. I
am doing research with a new stopping methodology which I might share
with others....
Regards,
Pal
--- In amibroker@xxxxxxxxxxxxxxx, "jtelang" <jtelang@xxxx> wrote:
> Pal,
>
> What does "the system converts losing positions into winners" mean?
> May be its a known way of describing a trading technique and I'm
just
> not aware of it... Are you referring to hedging?
>
> Jitu
>
> --- In amibroker@xxxxxxxxxxxxxxx, "palsanand" <palsanand@xxxx>
wrote:
> > That is correct. The owner apparently has been forced to close
his
> > business web site because he alledgely posted results which did
not
> > take into account, commissions and slippage etc. and had also
been
> > banned from exchanges etc.,...
> >
> > Regards,
> >
> > Pal
> > --- In amibroker@xxxxxxxxxxxxxxx, "Dave Merrill" <dmerrill@xxxx>
> > wrote:
> > > do I gather then that this system isn't for sale any more? it's
> > hard to
> > > understand why anyone would want to keep the name and contact
> infos
> > secret
> > > for a product they were trying to sell.
> > >
> > > dave
> > > Sorry, I have signed agreements that I will not disclose the
> name
> > or
> > > contents or specifics of this system to anyone else in any
> manner,
> > > verbal, written or electronically. I had to do this in-order
> to
> > buy
> > > this system.
> > >
> > > If I did disclose, it would be a copyright violation and I
> could
> > be
> > > sued for it.
> > >
> > > When I bought the system it was somewhat crude, mainly
because
> the
> > > original inventor of this system was using simple moving
> averages
> > > because you really need a computer to calcluate an
exponential
> > moving
> > > average and computers were not available during those
times...
> I
> > > have put in an enormous amount of hard work to perfect it.
> > >
> > > Even if I can disclose, I know that if one had developed a
> highly
> > > successful system, one might be very reluctant to put it on
the
> > > market for everyone to use.
> > >
> > > I can only discuss strategy and publish results.
> > >
> > > Regards,
> > >
> > > Pal
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