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Re[2]: PAMA trading method



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Larry,

The method applies to stocks and futures charted daily with positions held 
overnight.  The author doesn't mention using it for day trading.  Trades 
are placed near the close for the day.

I guess I'd call it a swing technique, in that it identifies certain 
patterns in up or down channels, then buys or sells on a target day if it's 
still in the channel.  It does seem to catch the pullbacks nicely.  There 
are about 7 different patterns based on support and resistance and where 
you are in a trend.  Determining the pivotal areas is unique and 
straightforward, with the only parameter being the channel width which is 
based on history.  A typical setup for a trade takes at least six days.  
The author claims 70% profitable trades.  My initial study indicates that's 
about right, but I find his stoploss settings give back a lot of profit and 
allow for substantial risk in sideways markets.  

It is not subjective, although I found a few samples that beg the question. 
The author uses a charting method to determine the trades.  I  want to test 
it over a number of securities so I'm putting it into Excel.  The book 
doesn't discuss automating the system, but it is based on fixed rules.    
It does require some study to understand, but the book is well written.  
Not at all like the Taylor Trading Method.

Gary Randall - Brunswick, Maine