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Excellent comments Tom.
Too many indicators can give you indicator-itis. A terrible disease that has
taken the lives (accounts) of many a trader.
Yes, a couple used here and there is good, but the KISS method is best. KEEP
IT SIMPLE, as Tom said.
Using ratio gaps as Tom suggested is a good idea and one that I use quite a
bit. Using one ratio for your entry with some slip, and using another ratio
for a place to say, "hey, I goofed, let me out."
My ratio stops are just beyond the next sup/res level on my trading program
results is realistically wide enough.
The bottom line, less decisions, less anxiety.
I like that line. <g>
cheers!
:)
rick
-----Original Message-----
From: Tom Stein <ComFut@xxxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Sunday, October 19, 1997 10:36 AM
Subject: RE: Fib Retrace
>
>
>Walt...........
>
>Re:Daytrading using fib numbers.
>
>1)Trading a .618 retracement.....put the order just before the .618 to make
>sure you get filled...use a .75 retracement as your stop. Once the price
>hits the .618 and starts to move in your direction...you might lower your
stop
>to a few ticks beyond that last high or low....in fact, at that time you
might
>double your stop for an "anti-fib" trade(works especially well in the
>S&P's)....My anti-fib trade is as follows.....price hits .618 and backs
>off....then powers through the .618 for a total retracement or more.
>
>IF you are going to trade fib numbers.....KEEP IT SIMPLE............
>IF you start throwing in stoch..rsi etc....you will negate a lot of winners
>and just create more anxiety within yourself.
>
>I have found........... more decisions=more anxiety
>
>Yes, I do use some other indicators for other entry/exit techniques.
>There are a few that have worked beautifully for short term stock index
>trading, but I try not to mix them all together....rather take each type of
>signal as it occurs..........
>
>Here's a beauty from Friday....look at Dec. Heating Oil....there was .618
>retracement at 60.20...market hits 60.30 and dives like a bomb.....
>If you put your order in to sell @ 60.00 with a .60 stop above 60.20...
>you were risking .80*$420.00=$400.00 or so and getting out moc would have
>brought in 1.80*$420=$800.00 or so per contract....
>
>Of course, the ones that work are always beauties......the important point
is
>to
>have a simple executable system that on each trade defines how to place
each
>order entry...stop...and exit.
>
>Again......for me...more decisions=more anxiety......
>
>Hope this helps....
>
>Tom Stein
>comfut@xxxxxxx
>
>
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