Disliked{quote} I have yet to decide the way to trade the system. Jim said we can make it as mechanical or as discretional as we like, and it looks like it is an important choice to make with respect to potential results. Being too aggressive at my first attempt on GJ produced only BE+3, whereas sticking to the mechanical rules would have caught me in the mid week's chop with unnecessary reversals. Looking back at this week's PA (GJ), the best result would be when not moving the SAR at all. That's hindsight, of course. Food for thought too. {image}Ignored
If, for example, you want to ride the trend for a much longer term trade (several weeks or more) then you might want to consider being less aggressive in moving your stop...but you will also need to live with large pull backs. On the other hand if you want to take profits sooner and be involved in shorter term pull backs and retraces, then you will need to be more aggressive in moving your stops...but you will also be vulnerable to the inevitable whipsaws that come.
As I see it this method is extremely mechanical and on the 4 hr chart you are basically trading the weekly moves, while getting a really good entry (from the weekly point of view). The discretion only comes as to how you want your trades to flow...each side has benefits and risks...there is never any "wrong" answer only what YOU feel comfortable with.
Personally I have taken to using this strategy in two ways. I use it on 6 hr candles (because I want to sleep) for trend moves and feel comfortable with stops as large as 250 pips to make 700-800 pips in a trade that takes about 3-5 weeks to complete. I also use this strategy on 1 min candles with the DOW e-mini on a daily basis at the NY open. I am very aggressive moving stops and so far (since I started 1 1/2 weeks ago) have logged an 80% success rate while gaining an average of 29 pips daily to keep the account building.
If you don't have a futures account you can try this on a 5 min chart during the London session and have similar results. Its all up to how YOU feel you want your trading style to be overall.
Edit**for some reason this thing posted 4 times...hopefully I have removed them all except the original