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bobrabcd wrote:
>
> Walt, do you use any kind of a volatility cut off in your futures trading
> systems? Seems like most of the work in the literature has been on entries
> from breakouts of narrow range and low volatility periods and very little
> about cessation of trading during highly volatility periods.
Bob,
Hadn't thought about it before, but you are right. I trade WITH
increasing volatility.
At times when the market is already in a highly volatile state, I
only trade under one circumstance:
Unwarranted Expansion: A market has expanded to the point where it's
underlying fundamental, technical and seasonal aspects do not support
current price levels.
Niederhoffer obviously felt that the market
had expanded too far. Haven't quite figured out for myself why he
thought this. :) He only missed the bottom by one day, but I agree
that it seemed to be a "gambler's" play, and not a very good one at
that. I guess he was trying to make up for Thailand in one shot.
Of course, I hardly consider myself in the same league as Vic,
so I'll leave the final analysis to those traders much more skilled
than I.
I think Niederhoffer is one of the greatest traders that ever lived,
and he still remains one of my idols.
Uh....... but I'll still use stops, thanks..... :)
Walt Downs
CIS Trading
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