TASC June 2010 'Forex Gambit'

in the June 2010 edition of TASC, Walter Downs speaks of his Forex Gambit trading system. Daily charts is what the article is based on.

Buy : Buy two lower lows and a closing price that is greater than the midpoint of the bar and is above the SMA

Exit Long: When a bar occurs whose range is greater than the previous three ranges and whose close is in the top 10% of the bar, exit a long position on the first closing price that is lower than the previous closing price OR exit after 16 days.

Anybody else tried this, seems to be WELL thought out. Any help on indicators to make the visuals easier especially in the exits.

I read that and and just started using it this week. So far so good.

Thanks for finding this post.

I was breaking in use of these two ideas with a 13 sma, and found some possibly useful variants.


The first one (in green) seems designed to capture turning, downward momentum at the second low. What happens, though, is that price often goes sideways between the previous two highs and lows.
Too, this sideways motion may often break down into a third low that is usually even or above the two (relief after the break in downward momentum), so that exiting on the second idea gives a poor or false trade. Maybe watching for the second idea as a reentry is a good idea.


The second idea (in red) establishes when upward momentum ends. I circled places the first three bars don't form a long, producing a complement to the second idea.




What separates the two ideas is how momentum is declared:
The two lower lows on the first, downward momentum idea, and a bar with a range bigger than the last three, long-going bars on the second, upward momentum idea.
What may tie these two ideas together, is that there is a stopping line after the break that each idea happens.

The occasional third low, which I found, in the few examples I looked at, to be a higher or even low, is more significantly right after a horizontal, or stopping, line that is (from my limited experience, and commonsensically with a momentum halt from the two lower lows) usually/always there. This stopping line makes the first idea similar to the second idea and its well-defined 'stopping line', enough so form a kind of symmetry between the two ideas.

The first idea needs a high after the lower low to make profit, so the stopping line is not noted during the idea's description; the second idea needs its stopping line to declare when to take profit. If a stopping line is used in the first idea during a short, then one would also, as with the second idea's stopping line, exit the trade one is in when the stopping line is broken.
So, including the stopping line that I've found is so evident in the first idea, makes the second idea reverseable; as well, the idea's separation of longs and shorts is instructive.

Hi
Nice idea.. need an indi for this