DislikedI've been doing the same type of exercise on live demo from Jan 15 to Jan 23.
I traded most pairs using hourly bars high/low on the 5 minute time frame.
If the 5 minute bar closes above the 1 hour high, or below the 1 hour low...i took the trade with a TP at the 138 extension.
Out of 83 trades...77 hit my TP for a gain. 3 of the losses i chickened out and manually closed them,(they would of hit TP but not quick enough for me).
2 losses i entered at a market top and had to close them. Price never reached TP.
1 loss i entered at a market bottom and had to close it. Price never reached TP.
Promising results so far, now i am not taking trades near daily high or lows to avoid losses at tops and bottoms.
Also my first 38 trades in a row hit TP! Luck probably...but we'll see over time.
CharlieIgnored
Sounds great. Thanks for sharing.
I've been doing similar things to what you are discussing but not exactly what you described. I'll run some of my own tests and see how it goes.
I have been looking at soooo many different angles to this that my head has been spinning the last week (no harm in this as far as I can see.....Skunny has thrown out some bones and left us to figure things out to this point....waiting for chapter 3!)).
A couple quick thoughts:
1) Did you notice any pause or reverse in PA (as a general rule) when price did HIT the TP? Some of the purists in the thread (no offense gang!) may not be thrilled with the lack of a noticable stop-and-reverse exactly at the 138......but, as I see it (and Sizz mentions).....there may have been a complete 138 pause, retrace and then continuation on on that 5M bar that doesn't even show up looking at the 5M bar.....but might be quite evident on a 1M or even a 15 or 30 second chart!
2) Those "major" tops and bottoms where you took the losses......that has been my problem area as well. How to deal with this issue might really hold a key.
Anyone have any ideas here?
3) I've "chickened-out" a few times as well. I recall Skunny mentioning that he has done this at times when PA suggested jumping out and waiting to get back in at a better price. This also helps avoid BIG problems at those turn-around points.......chart watching time can help develop the instinct for this IMHO.
Thanks again!