yes, you got your entry and your exit and thats all there is to it...so simple. Whatever happens to this trade, you will do the same when you see this setup again...thats all there is to it...so simple
high probabality is a myth, what's high ?? 55% win ratio, maybe 60% .. 60% win ratio is a myth on its own .. an to really bang it in .. drawing lines on a charts or using patterns etc. is largely a myth coz they give no measurability as they rely almost excslusively on bias .. trade the price coz it is the only truth .. hence my answer way up top here ..
Nope...that's not true. Your system is based on time. Correct me if i am wrong but your system relies the closing price at a certain time of the day. So there is a bias and it's time. It's all the same if u ask me. But to each his own.
only two, third is trigger .. but yes it may, however like a MACD or RSI or other indicator it is measureable and repeatable .. lines or patterns on a chart are not .. what I mean by that is that if 3 people all add a 21 SMA to an EOD of Top40, we all get same answer for the 21 SMA value (sure we may respond different) .. But if we all draw a support line we'll get three different answers .. now one could argue that drawing lines well is your edge, I would suggest it is ones bias not ones edge ..
It's always TIME - only TIME. The market offers only PRICE! YOU bring TIME to the party! (I'm off licking my chops - 250 000 NTC/ 50 000 AIP / 20 000 GFI / 5 000 HAR / 50 000 NPK. Banking some already. "Trading" my preferred stocks - badly as always - but very profitably.)
more importantly, MACD, RSI, and all the other useless junk out there are mathematical equations, therefore they can be computerized and backtested. (and I challenge anyone to come up with any significant correlation - there is absolutely no evidence to suggest this). Chart patterns, on the other hand, cannot be computer tested, so very difficult to back test. And Simon, markets are biased to the long side, pure and simple. What indicators do, and what traders repeatedly fail to realize, is that they give you an ability to act under the same measurable circumstances every time, thereby introducing consistency. This is how you reduce drawdowns and remove emotions. you act under the same measurable circumstances every time, consistently.
Long-term - patterns do seem to hold true - and it makes sense that they should. Short-term patterns are a cra-pshoot. Buying a recovery off a 5 year consolidation pattern -well - that makes sense. This "head-and-shoulders" / "rising wedge" / "fabulous octahedron" nonsense every 30 days - pleeeez. They keep the stoploss merchants in business. (And XYZ Traders/market/shareholder's College in the money.)
patterns enter into the discretionary realm, and the problem with discretionary trading is that it let's emotions dictate to a certain extent. But, like always, if you can write down your entry and your exit - with a justification, and you only act on what you have written down, then you are in the clear, IMO
What is wrong with sound judgement when it is based on experience?? The shorter your trading period the less emotion you want, hence a mechanical trading system that takes all emotion out of any decision when day trading. If you intent to keep a share for a few months, you can allow for emotion based on sound judgement and experience. Look at the GFI trade. That is a high probability trade no matter how you look at it. The technical and fundaments are all there Â– all I need to do is add time (a few months). The target and stop loss price is set, now we add a bit of time, and that is it.
I am not a believer that as human beings we have "sound judgement" so yes a mechanical system be it .. but you can not do mechanical using lines and patterns .. that is my point and hence why all my systems have zero lines or patterns ..