Bill, I began following your postings recently, with much interest
Someone on the options thread--I think that it may have been David Grossman--had commented on some of the rules that you use to trade the markets. The thing that got my attention was the importance that you place in terms of trading with the trend. This has been one of the key rules that I follow as well--I rarely violate it--and when I do, I more often than not regret it. So given our similar approach as far as trading the markets, I wanted to see if I could hone my trading approach based on your experience.
A few questions for you:
>>The trend is defined by the 200 day MA... buy calls when it >>is up and puts when it is down
You indicate that one should trade in the direction of the 200dma. Now at what point do you view the direction to have changed. More precisely, would any change in the direction of the 200dma from one day to the one previous be sufficient, or do you look for a certain minimum level of change?
Also, have you ever tested the possiblity of using a more sensitive MA to establish the trend. For example--using the 50dma. Perhaps, even using the 50dma as a secondary filter in addition to the 200dma as the primary filter.
>>Use the Raff channels to position yourself.
I am not familiar with the use of Raff channels--where can I learn some more about this?
>>Get long term options.
I agree entirely--when buying options. Do you write naked options, using your trading rules?
>>Put in sell orders as soon as you buy... i have missed several good profits by >>ignoring this one.
Another great rule--I don't use it but after reading your thoughts on it, I may do so in future. Do you normally set price objectives even as you enter the trade? How do you establish your sell price target? Do you change these objectives after you have initially set them?
>>Pick volatile stocks to place trades against.
What tool do you use to measure volatility and what is the threshold in the context of that tool that establishes there is sufficient volatility?
I use TradeStation and am not familiar with Metastock. Do you use a formalized trading system to generate your signals? Have you posted your trading system and the indicators anywhere--if so, can you direct me to the appropriate url? If not, can you summarize the essentials of your system?
I do a fair amount of work in terms of systems development and always enjoy an exchange of ideas in this area. I favor mechanical systems because it takes the emotion out of trading decisions.
I know that I have asked a lot of questions--would appreciate answers to any of them.
Regards |
