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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: dunlurkin who wrote (8632)	6/4/2000 7:31:00 AM
From: TraderAlan	Respond to of 18137

Wilson, The last two months have shown a strong 3 day swing tendency. This particular crossover probably works well with it. Tom should be commended for finding and using it. It's real doubtful that those results will continue as the market changes phases. Back in December and January a lot of folks thought they found a very profitable system too. The trick is to have the cajones to drop a system that starts to exhibit diminishing returns and shift strategy ahead of the crowd as market conditions evolve. There is always a new crossover or momentum strategy that will work great because it responds to a particular market inefficiency. But generally by the time it starts to attract notice, it also starts to lose effectiveness. Alan

To: dunlurkin who wrote (8632)	6/4/2000 3:20:00 PM
From: Jon Tara	Respond to of 18137

Although I don't trade strictly by it, I do use something similar - a moving average crossover based on the RSI, on 1-hour and daily bars. That is, instead of using the stock price as the basis, I use an RSI. False crossovers are a problem, particularly on the one-hour bars. It is not unusual for the indicator to "kiss" the other line, and then go back the other way. As a result, I use it more often for exit points than for entries. I have a single 1-hour chart and a single daily chart set-up on my RealTick III screen. Any stock I'm considering buying or selling gets dragged into these for a quick look-see. I don't conciously use the system all the time - but it's always there, so I am aware of what the reading is. It would take a lot of convincing to get me to buy a stock that had just crossed over to a "sell". :)