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Strategies & Market Trends : Befriend the Trend Trading -- Ignore unavailable to you. Want to Upgrade?

To: Dave Bissett who wrote (8075)	6/6/2000 12:13:00 PM
From: CatLady	Read Replies (2) \| Respond to of 39683

There's a difference between raw volatility and predictable volatility. The cool thing about the 5/8 stocks is that they are also tradable using other TA systems. As a counter example, does anyone have a good TA system for trading RMBS? Quite volatile but not very regular or predictable ( as far as I can see ). A second point, if a stock trades well for a while using 5/8 then doesn't, it's usually because it has gone "flat". Some pick up again after a few weeks, some don't. Just an observation from looking at lots & lots of charts.

To: Dave Bissett who wrote (8075)	6/6/2000 1:07:00 PM
From: Triffin	Read Replies (1) \| Respond to of 39683

Dave .. What's most important about the chart IMHO is it's persistent and continuous volatility, NOT the fact that it accidentally "fit" in with the 5-8 crossover rule. Wouldn't it be useful to know if the profits would have been, say, 40% greater using a a 3-9 crossover, or maybe even a different trading rule entirely? If that was shown to be the case, what rule would you choose to trade the stock tomorrow, next week? Dave, I agree whole heartedly .. I guess it really boils down to where we want to invest our time .. optimizing 'rules' to specific stocks or optimizing stocks to specific rules .. or as you suggest .. id the most 'smoothly volatile' issues out there and then 'fit' the best MAX to those stocks .. I would prioritize the 'elements' of any trend following model, from most important to least important as follows: 1) Trading vehicle .. Identify stocks, indices etc that currently exhibit strong smooth price trends for the specific trade entry rule the model uses 2) Trade management .. Develop rules to maximize the return on open positions utilizing TA, money management etc .. 3) Trade Entry Rule .. 5ema/8sma cross-overs on 60 minute chart. Any 'other' set-up rule that is 'reasonable' ie gives entry/exit signals near price turning points for whatever time period that you are using .. Seems we are doing the right things on the thread, Namely that the posters who are more active or full time traders should mention/post stocks that to their eyes exhibit the smooth trendiness/volatility that trend following models require in order to be successfully exploited. I tend to scan the biggest point changers and most active lists for potential candidates and then I look at the short interval charts on SI as a 'visual' screen. This is not a particularly efficient process <gg> ( I need to upgrade from bear skins and knives !! ) as many others on the thread are utilizing more efficient screening/monitoring software to aid in both trade set-up and candidate stock selection processes. Jim in CT ..