Quote:
Originally Posted by cosgrove
Just have to be careful about the rope being in overbought/oversold zones, because in one of your trades (cad) you sold when the 4h was in oversold but daily was breaking 76.4, and in another (eur) you bought when the 4h was in oversold and daily was breaking INTO the 23.6 level.
I think these trades contradict each other in terms of a system, and that's usually not a wise thing to do. As always, if I misinterpreted your trades, feel free to correct me, and post some charts when you get home from the office!  |
I think you're probably right Cosgrove that i mixed these trades up slightly - but so far has worked out ok so will leave open!!
What is your opinion on entering when the stochs are already in the overbought/sold regions. I went long EUR/GBP yesterday at 0.7436 with 200 pip stop. This is based on the very strong trend as the driver and the fact that the stochs on weekly and monthly are very tight and still rising whilst the daily stochs are rising and tightening again.
Doing very rough analysis of past data, when a strong trend starts, the stochs can stay in overbought/sold for quite a sustained period. Therefore possible scope to still jump on (even if we've missed the initial burst).
Another question for you is - given Ingots comments on stops - are you moving stops when testing this strategy. For example not reducing the 200 --> 250 pip gap but moving it as you (hopefully) generate large profits on trades. Especially interesting as the NFP data tomorrow could cause a bit of turmoil and the two conflicting arguments are:
1. keep original stop and possibly make a loss if hit by big movement (but conversley stay in the long term trend if it reverts back to that); or
2. move stop to break even or above so increase chance of getting stopped in the volatility but at least keep the profit already made
i'm going for 1 at the moment on this demo account but will see how it goes!