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Hi SJ -
That is good advice and most traders will heartily agree with you.
Many on this list have helped me lately, so I'll give back a little of what
I do here. Here's my personal opinion on the subject....
I privately daytrade the S&P using Leo order entry. Mostly discretionary,
and I depend heavily on some loose fitting, pet indicators. Been trading
since 1978, the S&P since 1994 actively.
My number one rule is: Unless there's a panic up or down, there's no trade.
I look to buy into a sharp sell off and sell short into a panic buying
spree...using price levels that I feel will hold.
I find that the surest and fastest move is after the successful end of a
panic and look to take the first 20-30% (or whatever, not critical) part of
a move. I personally feel the risk becomes higher as the move progresses and
more come on board. Nothing like buying the top of a move and the next bar
takes out the whole previous rally! <g>
I find that stops have caused me a lot of lost good positions in the past. I
feel they are crutches...I don't use them any more...just watch the market
with my finger on the mouse/Leo button.<g> If I buy a panic and I'm wrong,
I will usually get a bounce back to get out even,,,,otherwise I will bail
out after a 5-6 point loss.
I give the market a lot of lee way considering my trades last only about
16-60 minutes. I look to exit with a profit on the first mini panic in the
favored direction. Though, if the panic was of good magnitude, a trade can
rarely last the rest of the day.....This is where a break even stop can be
used....but it is usually best to just get out on the first or second
profitable panic and be happy.
It is important to develop an indicator that can tell you a panic has
occured. It is very difficult to buy a panic 'cuz we have all seen panics
become slaughters. But, that is rare.....focus on the norm, not the extreme.
Mini panics are the norm, while slaughters are rare right now. If a panic
keeps going, just click the button and get out. Though there will come a
time when slaughters are the norm for a period, as everything else....
I use a method to "standardize" the day. All days are "viewed" the same,
just that the price action is different. One must know if today is an
unusual bull day, or unusual bear day, a screw day, etc. Different
strategies are used after the first hour of labeling the market, though it
can easily change later in the day.
I find curve fitting/optimization is the biggest waste of time that a trader
can do. If TS took out all system crap I wonder if there would be as much
money to be made in the market? <g> I feel it helps to just look to find a
general method that works and then concentrate on the rules, not the data
fitting. As I have said over and over in the past....THE MARKETS ARE ALWAYS
CHANGING....from minute to minute . day to day, etc. What worked in the
past may keep working or may never work again and become extinct....esp true
for optimization. Who knows?
Stay flexible in your rules and never have a market senario in your
mind...it will blind you to the real mkt action. Just look at probabilities
and remember the rule of alternation....it will probably be different this
time.
Trading can be easy some days...others can be a bitch. I'm presently working
on lightning the mental load with Excel, a fuzzy, Wav files, etc and thank
the many who have helped! This IS a great list at times.
I've gotten some great sparks of ideas here in the past.
More Later -
Tom Cathey
>
>When is a bottom a bottom and a top a top??
>Only after the market has turned and it can be looked at in history!!
>Is it better not to weight for a bottom or a top to form as opposed to
>"it looks like (could be) a bottom" or "it looks like a top"
>
>Be happy with a 60%-80% of the move, leave some bread on the table for
>someone
>else, why risk all and try to top/bottom pick.
>If one needs to ones to be a hero take up fighting or parachuting!
>Be humble,simple and make money, then give some away and make more!
>
>Do not be RULED by FEAR, GREED, and HOPE.
>
>Set the trap and wait
>
>Just my personal perspective,
>Stephen from the Great Southern Land,,,,,OZ....!!!!
>"simpleman not superman"
>
>
>
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