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RT's,
I use trailing stop all the time, but I do not trail it unless the
market tells me to change it. I do not use moving average or volatility
stops, but I do use Divergence as a way to shore up my Protective stop, I
either use it on daily or weekly bars. When I get ahead on T-bonds or
currencies by $4000, I lock in $2000, other markets that do not move as far
such as Oats would be $2000/$1000. If I get a few "extended bars"
(biggest ranges in 20 days for example), I will move my protective stop
beyond the extremes, I use these on weekly bars as well.
I recently have changed my ways of entry, for years I would use
Triangles on daily bars and depending on the 40ma on the weekly bar chart
would confirm trend. I found that as trend increases in time, so should the
number of bars in the triangle length. At first I would use a 5 bar "Tri"
just to get in, never risk more than $500, when the market gets ahead by $500
go to breakeven. When trading currencies, always use "EFP" market and place
protective and entry stops. As time lengthens out to six months, my number of
bars in the "Tri" would lengthen to 17 bars in duration. I used this method
for seven years and was profitable for seven years. But now I have gone to
using weekly bars as my entry, it has reduced my trading 80%, my win/loss has
maintained the same at 40-45%, my entries are earlier so my good trades are
more profitable and I still use the $500 risk. Now my weekdays are very freed
by not looking for entries and only need to look at charts on weekends. My
method is nothing more than looking for very long trendlines and using the
COT.
Does anyone else make decisions based on weekly bars?
Jim
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