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RT's
I agree with both Brent and Bill on various points of trading. But the
longer I trade, the less I need of indicators. Perhaps because of the last 14
years, I have done all my charts by hand even though I have four computers
going. I have learned much by charting by hand that many may miss by looking
at a computer screen. Price patterns, at least for the last 100 years, have
repetitive patterns and after many patterns, oscillators will do little
fluctuations showing a slow down of strength and most would call this
divergence if new highs/lows take place. If you look at enough charts, you can
tell if the resumption of trend does not take place with enough velocity,
divergence will occur. This does not mean the market will turn around, but
depending on your timeframe, may mean to tighten protective stops on open
positions.
The markets compress and breakout, compress and breakout over and again.
I see many posts of many topics, but few on trend or more importantly the
dissection of trend as if one was in biology. I believe whatever your
determination of what trend is (mine is the 40ma on weekly bars), the first
trade after change of trend is the best. As I get deeper into the trend, at
some point if the trend is several months old, I feel that there is less
chances that the signal will produce a min. 4 to 1 reward to risk trade on the
normal risk of $500. So at some point, I must risk less because the age of the
trend.
This is true as well when I short term trade, the markets make the same
patterns only quicker, this is why I feel if one wants to trade short term,
they should learn longer term first and build up to quicker bars and quicker
decisions to be made.
I use the same 40ma on daily, 60 and 30 minute bars for trend. Look for the
indexes to compress on the 15 minute and do a breakout on the 5 minute.
All I ever use is the 40ma and stochastic (for tightening stops), perhaps
I'm getting lazy, old or burned out on trading, but I simply don't have the
desire any more to seek the new holy grail indicator, I have already tested
over 400 indicators, show me, paint bars and systems in the past 14 years.
Price LEADS all indicators, unless you have a crystal ball.
Jim
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