Mechanical trading, congestions and anti

[Paul Cote <cote@xxxxxxxx>]

Ok, to DEFINE a congestion, I learned from a disciple of Charles
Drummond the following:

You determine a constant called the pivot which is the (h+l+c)/3.  I
suppose you all have seen this constant before and it is even called the
pivot.  I believe Drummond calls it the red bird dot or something. 

You average three days of pivots and plot it to the right of the current
bar to form a kind of displaced by one half a day moving average of a 3
period pivot.

If you close over the prior day's dot for three days in a row, you are
in a trend run up! If you close below the prior days dot three days in a
row you are in a trend run down! If you are in a trend run down, and
close over the dot, you enter congestion and then you begin a horizontal
period. after a reactionary period, you draw a line above the high bar
after congestion entrance and below the low of the lowest bar of the
congestion.  After drawing these lines on some fine day you will break
out of the confines of congestion.  Then you ought to be short or long
on the close outside of the congestion or you can buy or sell on the
confines of congestion perhaps the next day.

Now, if you dont want to deal with the dot, you can use a four day
moving average which seems to be close enough imho.  There may be a way
of getting tradestation to identify congestions.  I believe the program
I was discussing called investigator does such a thing.  I will fill you
in when I get it.  

In any case, I don't know what the difference is between a trading
system and trading by a set of rules.  If anyone can tell me, they will
be teaching me something.

Now, LBR has a system called anti.  In the Streetsmarts book the system
looks great.  I have not been able to see any setups using my
supercharts or any of the commodities I track.  If anyone else has had
succss with this system please clue me in how you figured out how to use
it.

Thanks

Paul Cote