I came up with the concept of the swing charts and organized the algorithm. Michael Friesen and Mike Watkins programmed hundreds of lines in Omega's (not so)EasyLanguage for TradeStation so that the swings are automatically generated in whatever timeframe we use.
We both use ADX to measure the strength of a move, and want to trade truly directional moves only. The goal is simple. We want to trade every retracement in a directional (defined as moving in one direction at high speed) trend, i.e. sell every bounce in a directional downtrend and buy every dip in a directional uptrend. We stay out of "grinding" up or down trends, where it is moving in one direction, but not at high speed. We stay out of trading ranges and areas of prolonged congestion.
At the end of a move, we will trade a test of high or low to see if we can get a reversal. For example today was a classic. Sell it all the way down, until it formed a 2B bottom, and then buy it all the way back up:
ottographs.com
In the end, that is all there is in trading. Simple, but not easy, because people make it un-necessarily complicated, I think.
T. |
