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Isn't this just another attempt to find a holy grail indicator ?
well not so much a holy grail indicator as a holy grail system, yes! Of
course!
Is it also going to
> tell you what is going to happen next ?
I don't think that is possible, so rather would like to know early when
the trend has begun. I suppose channel breakout is the earliest signal
that a trend has begun (or is it the volatility break out? naah, too
early), unfortunately there are many false channel breakouts. The
proposed ADX as a trend indicator may be able to be added into the
system to help show that a trend is underway. It is not so important to
enter the trend right at the beginning. If it is a true trend, it may
be ok to enter a bit late.
It is just an idea. If you already have a non holy grail system that is
providing you great results, I would be interested.
I have traded a volatility breakout system before. The good thing about
volatility breakout is that you have a relatively high percentage of
winning trades. Another good thing is that it doesn't leave you with a
trade that is not performing, although in a sense you are "in the
market" every day because you have your stops in ready to catch the
breakout. Unfortunately however the average profit per trade is too
low. When I traded the volatility breakout, I noticed that there were
many times that I was taking profits while the market was taking off
like a rocket.
I would like a system that can also catch those large moves in addition
to taking the small chunks. Maybe there is a different way to make a
hybrid of a volatility breakout and a trend following system? Another
idea is to incorporate pivots so that the system takes volatility
breakouts that exit with say the first profitable exit, unless they take
out a pivot, in which case you hold for a longer period of time?
Paul Cote
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