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Hi Darrell;
Thankyou for your response. I don't know if I understand your question, but
let me give it a try.
Once you measure a particular move(leg 1).....look for a .50-.618%
retracement(of leg 1)....IF the market turns in that area....you would then
look for the next leg(leg 2) to be approximately equal to the first(leg 1).
IF leg 2
exceeds the distance of leg1...the next stopping point to look for would be
leg1*1.618.......Now all that said....you could also, look to see if your
measures of the stopping point of leg 2 might also coincide with another
retracement of larger magnitude.
ie:spz---905.50-992.25=86.75....86.75*.618=53.60...
992.25-53.60=938.60....accurate to within 1/2 of 1% of the low so
far(335.50)............
The important point is as always money management. These numbers are
guidelines, NOT absolutes. IF you trade these numbers...give them about a 1%
leeway. IF that 1% is too much to risk(the big spz=$4,500)...Don't take the
trade or use a different contract(the mini spz=$450.00)......
Hope this helps.....
Tom Stein
comfut@xxxxxxx
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From: Darrell Zang
Sent: Saturday, October 18, 1997 1:55 AM
To: ComFut@xxxxxxxxxxxxxxx
Subject: Fib Retrace
Tom....
On your example of a retracement, why do you drop another 25 points
after your initial retrace? Is this the beginning of another
gain-retracement cycle. In other words, I'm trying to determine where /
when this method goes full cycle, so I would know when to start over.
Darrell
Subject:
Re:Simple trading strategies
Date:
Fri, 17 Oct 97 12:43:34 UT
From:
"Tom Stein" <ComFut@xxxxxxxxxxxxxxx>
To:
"REALTRADERS" <REALTRADERS@xxxxxxxxxxxxxx>
Quite often traders get wrapped up in the "it's complicated, so it must
be
good"
mindset. I have found just the opposite...The simplier my strategy, the
more profitable(with less anxiety) I experience.....
Example.........(It's not 100%, but nothin' is)
SPZ made a high @ 992.25
SPZ made a low of 966.50 or 25.75 points.
multiply 25.75 * .618=15.90 (.50 and .618 are very common retracements)
Look for a retracement to 982.40
High for the retracement???? 982.00
Then look for another drop of approximately 25.75 points.
982.00-25.75=956.25...the low yesterday was 956.00
Sure the S&P may go down more, but would I be happy with 20+ points?????
This type of swing trading is applicable to ALL markets...stocks,
commodities
etc......It's nice to know that simple does work.
Hope this gives ya something to consider.
Tom Stein
comfut@xxxxxxx
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