DislikedHi Robinhood. Thanks for the great thread. I see you recommend "phanthoms gift" as a book to read and I was wondering if you implemented Rule 2. From Phanthom of the Pits, in your trading. He talks about a 3-2-1 structure in his book for a total of three entries. I'm just curious to see where you would add to a position if any at all. I'm testing it with the (signal+1bar) and (signal+2bars) as my addon entries but so far havent been having much success with it. The initial entry is great. It's the next two that I'm trying to improve.Ignored
You have to remember that The Phantom was a "Pit Trader" who traded in the trading pits in Chicago. They didn't have charts in the pits (hell, I knew more about technical analysis than they did because they knew almost nothing about it and I traded using live online charts), many of them just bought at or around "Pivot Point Numbers". They bought the numbers from the same guy each morning, and many of those guys only bought and sold at or around those points because they were like magnets because everyone knew what they were.
They would often build a trade by adding contracts as the momentum built, basically they fed off of each other's emotions and many of them just yelled all day long.
I was at the CME (Chicago Mercantile Exchange) one day where many of the trading pits were located (the others were at the CBOT and the NYMEX). There was a pit, I think it was Live Hogs, and there were only 2 traders in it. They got into a fist fight, then when they were done, they had to get up and go back to trading with each other, otherwise, neither of them could execute trades that were hand signaled in to them, by brokers, for their customers. LOL!
It's a well known fact that many of those pit traders were either alcoholics or drug addicts, or both...with a bit of a gambling addiction thrown in for good measure.
Whenever I visited my brokers there, we ALWAYS went to a bar that was close by the exchange after the markets closed at 3PM Central Time. And the men's bathroom was a like a drug dealer's paradise where traders bought cocaine and snorted it in the stalls.
And don't even get me started the mobsters who traded in the pits!
As they say, those were the good ole days!
BTW, my back-testing has always shown that you are best off by putting on your full position at the beginning and not adding to it, and also exiting the whole position all at once.
Always a Student, Never a Master - Emulate What Works
2