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In a message dated 3/2/99 9:43:06 AM Pacific Standard Time, jrt@xxxxxxxxxx
writes:
<< Any of you out there who are trading range breakout systems - what do you
> find are the best filters to use to pick a false breakout when it occurs?
> Or, better yet, to keep you from making a trade when your filter indicates
a
> breakout is more likely to prove a fake-out when it occurs? >>
In recent years I have found that breakout systems in futures markets are less
reliable than in past years and I have developed a preference for entering on
dips except when there is a breakout of very unusual significance where I
might miss out on a big move while waiting for the dip.
Unusual significance could be defined as a long term breakout accompanied by
sharply expanding volatility but there could be many other possibilities.
(CCI or ADX levels for example) Suggestion is to do most of entries on dips
and only chase after the market on the strongest breakouts. Assume that most
breakouts are false and try to identify the good ones rather than trying to
identify the bad ones. (Seems easier to me but same logic either way I
guess.) Remember I'm generalizing about futures markets and not stocks.
Hope this helps.
Chuck
http://traderclub.com
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