Hi Folks,
Firstly for good or abd this is a nice active thread which has helped people share idea's etc regarding a strategy development.
My first thoughts when I read the first post were that this was going to hurt a lot of peoples pockets and I still think that now.
What we need to consider at the moment as to why this strategy is having some really good success rates, which is that we are seeing a lot of intraday reversals which on some trades is making a killing, giving hope to many traders that it will CONTINUE to do so.
When its not working well ie when we see normal market conditions this strategy will not work so well.
I know this as this strategy has done the rounds in many slightly differnt forms over the years.
OK so before this turns into a rant about how much I hate this strategy... ooopps too late...
Anyway, I have been thinking baout this on and off for a long time now and I usualy keep my head down and focused on what I'm doing.
And in an effort to be constructive towards this method here are some things to consider to develop this further... I dont know if they have been covered already.
One of my main focuses is on an average days move over a 100 daily bars usually with an ATR indicator.
If you look back over the chart you will see more often than not under normal market conditions that once an average days move has been done price normally stops.
It might do slightly more or slightly less but usually it stops and chops.
Usually I'm thinking twice about a trade if the cross rate is into 65% of an average days move.
So here is a little rule to help you filter out some of the lower probability trades imo.
If >65% of 100 daily ATR done - no trade
Ideally if price still <40% of 100 daily ATR going into the US session (which I think is when this is applied) then there is 60% potenial left and provdes a higher potential trade.
this will obviously mean less trades setting up but restricts the trades to ones which have potential to move and give you a profit.
In the short term with the way the markets are at the moment you will miss some of those intraday reversals and >300 pip movements
BUT, this should help you towards making this into a LONG TERM strategy and not a short term lucky set up based on current volitility.
I dont trade this strategy nor do I intend to as I have my own strategies that I'm very happy with.
I hope you find this little tweak useful
Happy Trading
Phil
Firstly for good or abd this is a nice active thread which has helped people share idea's etc regarding a strategy development.
My first thoughts when I read the first post were that this was going to hurt a lot of peoples pockets and I still think that now.
What we need to consider at the moment as to why this strategy is having some really good success rates, which is that we are seeing a lot of intraday reversals which on some trades is making a killing, giving hope to many traders that it will CONTINUE to do so.
When its not working well ie when we see normal market conditions this strategy will not work so well.
I know this as this strategy has done the rounds in many slightly differnt forms over the years.
OK so before this turns into a rant about how much I hate this strategy... ooopps too late...
Anyway, I have been thinking baout this on and off for a long time now and I usualy keep my head down and focused on what I'm doing.
And in an effort to be constructive towards this method here are some things to consider to develop this further... I dont know if they have been covered already.
One of my main focuses is on an average days move over a 100 daily bars usually with an ATR indicator.
If you look back over the chart you will see more often than not under normal market conditions that once an average days move has been done price normally stops.
It might do slightly more or slightly less but usually it stops and chops.
Usually I'm thinking twice about a trade if the cross rate is into 65% of an average days move.
So here is a little rule to help you filter out some of the lower probability trades imo.
If >65% of 100 daily ATR done - no trade
Ideally if price still <40% of 100 daily ATR going into the US session (which I think is when this is applied) then there is 60% potenial left and provdes a higher potential trade.
this will obviously mean less trades setting up but restricts the trades to ones which have potential to move and give you a profit.
In the short term with the way the markets are at the moment you will miss some of those intraday reversals and >300 pip movements
BUT, this should help you towards making this into a LONG TERM strategy and not a short term lucky set up based on current volitility.
I dont trade this strategy nor do I intend to as I have my own strategies that I'm very happy with.
I hope you find this little tweak useful
Happy Trading
Phil