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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Ron who wrote (40338)	11/10/2003 3:32:51 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71088

Hi Ron, I can't say I have any specific experience with that system. It sounds like a very short term oriented trading system. Given that this is the case I would more inclined to use the 60 or 30 minute charts instead and use a 32 period or 64 period moving average. This would be about equivalent to the 4 day moving average. I don't use those setting myself, but everyone has their own preference for moving averages. You still need to fine tune to the stock you are tracking, so I would not get too attached to any specific moving average. Work out the one that work for the stocks you trade. The ADX signal is used to indicate the beginning and the end of a trend. I would suggest you add the +/-DMI signal to the ADX. The extra two signals should help you to enter your position before the ADX signal turns. Key points to remember about all the fancy technical indicators: 1) There are really only three type of indicators: moving averages, oscillators and range indicators Moving averages - moving averages and MACD Oscillators - stochastics, MACD Range - RSI, Bollinger bands, stochastics All the various incantation are still variations on the models in order to get earlier entry for a specific type of indicator. 2) Playing with the model typically increases or decreases the number of false entries. The idea is to get a compromise that doesn't give you too many false trades. 3) Most mechanical trading systems over time produce about 50 percent winners and 50 percent losers. It is the average winning dollar amount versus average lossing dollar amount per trade that makes the difference between doing well in the market and losing your shirt. 4) Work on your own system and continue to refine it. If you understand your system well, you are more likely to stick to it. It is usually when you deviate from your trading rules that you amplify your losses. 5) Use stop losses and profit trades and stick to them. You should alway have an exit strategy before you enter a trade.