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Dear Bob,
What you outline below is very true and makes it nigh impossible to
backtest reliably. One needs to forward test and assess.
If it is too much of a bore to post the day after a volatile day, I
have no interest in following through with this.
John
------------------ Reply Separator --------------------
Originally From: "BobR" <bobrabcd@xxxxxxxxxxxxx>
Subject: Re: [RT] S and R trading method for S&P
Date: 04/23/2002 05:34am
Here is another view of something similar to John's S/R trading
method. For
example, in the attached chart the 1114 and 1106 levels contain 70%
of the
previous day's tick volume as calculated by Clyde's Market Price
Distribution tool. If the snp opens withing 1106 and 1114 then sell
at 1114
and buy at 1106(with appropriate stops of course) within the first
third of
the session. As the day progresses the newly developing price
distribution
takes on more importance. If 1114 fails to hold as resistance the
first
sell gets stopped out, then buy a retest of 1114 and target 1122. The
inverse strategy is used at 1106. Trending trades can occur if those
two
levels are broken. The problem with this plan is the concepts depend
so
much on the bar time and what is determined to be a successful pass
or fail
of resistance or support along with diligent use of stops. For
example,
what constitutes a failure of resistance?.. a close above it on 5,
10, 15,
30 minute bars? A close and an open above it? A clear bar
penetration so
that the low of the bar is above it? And then what about the stop?
How
does one determine how many points above the R level to put a stop on
the
short, or how many below the R level for a long if the R level
doesn't hold
resistance? Additionally, suppose the snp opens above the R level or
below
the S level. MPD theory says those levels then become S and R
respectively
and are to be bought and sold respectively. One fly in this ointment
is
that the value are pivot at 1108.50 is a strong attractor for a
retest of
Monday's action. Sometime Tuesday it should be tickeled a bit, how
is that
for trading terminology. Personally, trading off of specific levels
could
be improved on by use of swing points near those levels in order to
incorporate more of what the mkt is revealing about itself. So
rather than
take specific R/S levels I would look for the nearest swing points to
R and
S to trigger the signals. PS: The chart was made about 5:30 PT or
an hour
before the NY open. Globex is thoroughly testing that 1108.50 level
now.
have a good day,
bobr
----- Original Message -----
From: "John Cappello" <jvc689@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Tuesday, April 23, 2002 5:06 AM
Subject: [RT] S and R trading method for S&P
>
> R= 1112.6 S= 1104.0
>
> If market opens between these ranges, Sell at R or Buy at S
whichever
> is struck first.
>
> If market opens outside this range, enter only if this range re-
> entered and Sell R on a stop and Buy S on a stop.
>
> 4 point SL and 6 point profit target, MOC...discretion optional.
>
> John
>
>
>
>
> To unsubscribe from this group, send an email to:
> realtraders-unsubscribe@xxxxxxxxxxxxxxx
>
>
>
> Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
>
>
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