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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures

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To: F Robert Simms who wrote (39976)	11/19/1999 4:45:00 PM
From: Matthew L. Jones	Read Replies (1) of 44573

In the event that a pivot point (the highest or lowest point within 10 bars in either direction or a 20 bar range) has an adjacent bar with the same high or low, the first bar is called the top or bottom. In the event there are three adjacent sharing the same extreme, the center bar is the pivot. Thanks for the nice comment. The way that the info is valuable to me is this. It helps me evaluate the odds in continuing a position or in entering a position (since I like to enter positions only when the odds are in my favor by at least 3:1. Further, I will exit a position even if it is moving in my favor, when the odds against me are 3:1. Based on the statistical work, the following conclusions can be drawn from the data: Extent (or points in intraday trend): Average-- 9.13 points (uptrend); 8.57 points (downtrend) Odds 3:1 (favor)-- 4 points (up or downtrend) Odds 3:1 (against)-- 14 points (uptrend); 12 points (downtrend) Duration (or the number of minutes of an intraday trend): Average-- 45 min or 9 bars (up or downtrend) Odds 3:1 (favor)-- 25 min or 5 bars (up or downtrend) Odds 3:1 (against)-- 65 min or 13 bars (up or downtrend) Hopefully this makes sense. Let's say that your system generates a buy signal 5 bars and 4 points after an intraday low. The odds effect your entry as follows: 1) odds of further up move (extent) are marginal (the 3:1 odds limit is 4 points) and 2) the odds of further up move (duration) are marginal (you are at your 3:1 odds limit of 25 minutes). This makes the trade right at my minimum acceptable odds. I would definitely not chase this trade (at all). I might look to exit whenever the extent got to 9 points or the duration got to 9 bars or 45 minutes. REMEMBER... THESE ARE FROM THE PIVOT POINT AND NOT FROM YOUR ENTRY POINT. In other words, your upside is 5 points and your time limit is 20 minutes. If you have any questions, let me know and I'll try to answer them. Matt

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