Okay, here's the CAVEMAN METHOD, because it's so easy that even a caveman can do it... seriously, I believe a responsible 12 year old could follow this method mechanically without any problems or issues and without having to understand anything about these markets in the first place, it's just that straight forward and mechanic...
I would officially call it the "5 Point Rule," since that's what it really is... after going over the data for the past 3 years as posted in the header of this thread, the gains would be reduced by as much as 45% to 50%, depending on the actual movement of the market itself, but I believe nearly ALL whips are completely eliminated... the trade off is fine since it would not require any tip toe monitoring other than to place a buy or sell stop and to watch where the actual close occurs...
Here's how it would be done:
The most recent initial main model sell signal confirmation was a close below 1427.40 on 12/21... the market actually went far below that price in the evening session on the 20th... using the 5 point rule, a straight sell stop would be placed 5 points below the 1427.50 price... this means a sell stop at 1422.50 would get one short... once the price is hit and the order is executed, then one only needs to watch the actual close itself... if the market closes BELOW 1427.50, then keep the short position because the official sell signal was confirmed...
You can well imagine, one would have to give up 5 points of his earlier long position and then give up another 5 more points on the forthcoming buy signal using this 5 point rule, and that's where the reduction in gains occurs... but, at the same time, using the 5 point rule just about completely eliminates the whips that do occur at the signal price while the market itself is trying to figure out which way to go... the 5 point rule keeps one well out of reach of those kinds of whips that occur very near the actual confirmation price itself...
NOTICE: THIS IS NOT TO BE CONSTRUED AS A RECOMMENDED OR SUGGESTED TRADING METHOD, THIS IS ONLY PRESENTED HERE FOR ENTERTAINMENT PURPOSES ONLY... ANYONE WHO USES THIS, OR ANY TRADING MODELS MENTIONED HERE, ARE FULLY RESPONSIBLE FOR THEIR OWN MARKET PARTICIPATION...
GZ |
