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It involves buying higher swing-lows and selling lower
swing-highs. Also known as pivot-points.
A definition of these swing-highs and swing-lows is
appropriate here:
A swing-high is a high bar with lower bars on both
sides of it.
A swing-low is a low bar with higher bars on both sides
of it.
The more lower bars to the left of a swing-high the
better.
The more higher bars to the left of the swing-low the
better.
That makes them more significant and presumably more
powerful swing points. However, only one bar on either
side is acceptable (but two or more to the left are
usually stronger signals).
My trading methodology requires two (or more) consecutive
swings, with the second one being a higher swing-low
than the preceding one for a buy. Alternately, the second
swing-high must be a lower swing-high than the preceding
one for a sell.
The long trade entry takes place when your
commodity broker enters the market for you on a buy-stop, which gets triggered
two ticks above the high price of the last bar (the
bar following the swing-low pivot bar), for a buy.
The short trade takes place on a sell-stop at two-ticks
under the low price of the last bar (the bar following
the swing-high pivot bar), for a sell.
Your stop-loss order is placed 6-ticks under the lowest
price of the last swing-low bar on a long trade.
The short trade stop goes 6-ticks above the highest
price of the last swing-high bar. You can make some
really outstanding money using this simple, but very
effective trading methodology.
By David Stone
Secrets of time
durations of profitable & losing day-trades
Most successful day trades last approximately 7-minutes.
That assumes the trader is using a reasonable profit
objective and exiting the trade as his profit target
gets hit.
Most losing day-trades last approximately 45-minutes, based to our hands-on research.
That’s because the trader relies on hope once
he sees the trade appearing to fail. He hangs on to
the losing trade hoping it will turn, finally the loss
becomes to big forcing him to exit the trade.
How many trades
are needed for statistical validity?
Many traders ask how reliable is their track-record
as far as statistical validity goes.
They may see some statistics on seasonal trades showing
a market was up from April to June during 12 of the
last 14 years.
They may have experience with their own trading system
showing 8 of 9 winners following say a 5 unit moving
average crossing over a 9 unit moving average.
None of these are valid from a statistical validity
standpoint. That's because according to mathematical
expert and statistician a minimum of 30 occurrences
are required for statistical validity.
Please keep this in mind when evaluation a trading
system. Anything less than 30 samples is not statistically
accurate.
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