Hi Savant
Firstly, Welcome back. Hope you had a fruitful break.
Have never traded your system till date as have been a late entrant on your thread.
But have religiously been reading your posts from page 1 will do so till i come upto date with the latest post on this thread. Have kept a target of April end for it at the max.
Have already finished reading your part II thread and am online on that.
(I guess a couple of members may be thinking i am insane to start reading from the very begining but i have no regrets becasue there are many gems hidden in them and inspite of all my readings till date i only ended up adding a lot to my knowledge more so on the regulations and other aspects that effect the trading world in particular which i had no clue of).
I must admit one thing though - not trying to flatter you or apply butter/maska but i am awe struck with the wide range of knowledge that you possess about this field more so since i read in an earlier post that you are from a completely different background i.e. an architect.
That gives me 2 clears signals - you are what i usually term "God's Favourite Child" or you have burnt the midnight lamp for many many years to acquire that much knowledge and exposure.
Well coming back to the main question - till page 328 have read all about both the crossover systems including the BB part the entries at the previous days high, the concept on stop losses, the reducing SMA for the stop losses from 50 to 10 for 20X50 system and the money management rules etc.
I myself have run the afl's explorations with the given criteria's but now coming to the practical aspects of trading. I hope i am not jumping the gun as have just read upto page 328 only till now.
My query is:
1. Do you enter plainly and blindly at the crossover (after that glance at the BB band for further analysis) or do you apply other criteria to further filter the shortlisted candidates.
This question may irritate you a bit but the reason why i am raking it up again is because you must have seen so many charts till date that at a glance you can decifer intutively the good from the bad without even moving a finger or a blink (sub conscious mind/habit inculcated by years of practice).
But in a newbie's case like myself - i observed some whips saws in both the 5by6 as well as the 20by50 crossover systems.
How does one try to reduce the whipsaws i do understand completely avoiding it is just not humanly possible.
Should i enter a trade only if:
a) Expansion Breakout:
Stock Made A Two Month High & Day’s Range Was Large.
Therefore, Stock Has A Greater Chance Of Going HIGHER In The Short Term -Next 4 To 5 Days.
b) Trend Reversal To BULLISH:
Stock Was In A Downtrend & Now It Is In An Uptrend
20 DMA Has Crossed The 50 DMA To The Upside.
c) Buy On Retracement For Strong UP Trending Stock:
Stock Has A Strong Uptrend & It Made A Brief Retracement.
Therefore, Stock Has A Greater Chance Of Going HIGHER In The Short Term - ext 4 To 5 Days.
Suggested Strategy: Buy A Little Above Previous Trading Day's High & Place A S/L A Little Below Previous Trading Day’s Low
d) Buy On Trend Reversal:
Stock Was In A Downtrend & Gapped Lower BUT It Ended The Day Higher
Therefore, Stock Has A Greater Chance Of Going HIGHER In The Short Term - Next 4 To 5 days.
Suggested Strategy: Buy A Little Above Previous Trading Day's High & Place A S/L Sell A Little Below Previous Trading Day’s Low.
e) Trend Reversal To BULLISH:
Stock Was In A Downtrend & Now It Is In An Uptrend
20 DMA Has Crossed The 50 DMA To The Upside.
Or just even if it is purely a crossover as per the sma's.
My apologies if you have answered this query anytime after page 328 in which case i will come back to you only at the end of April 2010 as i have a moral responsibility to first completely read your thread before posing any questions to you.
By the way before i windup - am having difficulty to analyze the BB bands concepts too i.e. 9,2 system as it is very easy in hindsight but in the absence of knowledge predicting the right side of the charts seems to be very difficult.
I found that inspite of the candlestick piercing the upper or lower bands my expectations of a reversal or retracement to the other end of the band was just not happening and the prices continued in the same direction.
Thanks in advance
God Bless
Regards
Floyd:thumb:
Hi Arvind,
You Have Done Us All Proud, The Way You Stormed Through.
I Have Always Believed, How Fast One Learns Is Directly Dependent On Your Interest In The Subject & Fire In The Belly.
Now Coming To Stop Loss If Following 20/50 Where The Profit Target Is Mentioned, When A Fresh BUY Triggers Ideal S/L Should Be LOW Of 50 DMA & If You Are More Comfortable With Trailing S/L Then Each Day That Goes By After Your Entry, Reduce DMA By 1, That Means On The 2nd Day Day After Your Entry You Will Calculate 49 DMA LOW From Present Day For Next Days S/LTill You Reach 10 DMA, Thereafter Previous Days LOW Should Be OK....
To Illustrate This Further.
If You Made An Entry On Monday Your S/L Will Be 50 DMA LOW For Entry Day.
For Tuesday You Will Calculate 49 DMA LOW, For Wednesday 48 DMA LOW So On & So Forth.
Happy & Safer Investing
SavantGarde
