Hello!
The time for getting into using SIS is approaching for me little by little. I reread the last 15 pages and collected the recent posts about the peculiarities or open questions of SIS. I think the earlier ones were pretty well summed by this comment by Dale:
Quote:
After spending the entire week (as you all well know) going over the SIS etc. etc. etc. I've reached ONE FIRM conclusion:
It does not matter WHICH system you're trading from 'the book': you NEVER place an order or base ANY trading decision until after the close of the daily bar!!!
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This makes a lot of sense and makes the system more consistent as well. Personally I'm going to study the system by using this rule.
This one I think has not been commented yet:
Quote:
Originally Posted by dpaterso
This is where the (my) confusion is STILL ever present:
Take a look at Figs. 8.6, 8.7, 8.8, and 8.9 (pages 97 - 98).
The way I look at those diagrams we're being told that your entry orders are AT THE EXACT POINT where the ASI PASSED the previous (SIGNIFICANT???) HSP or LSP. Right??? In other words according to these diagrams the ONLY WAY you get 'get in' at the entry points indicated would be if you had already placed your orders the day after the previous (SIGNIFICANT???) HSP or LSP had formed. In other words: NOWHERE on these two pages does it say anything about waiting for the CLOSE of the ASI above or below the previous (let's forget about SIGNIFICANT??? here i.e. I'm tired of typing it but you know what I mean) HSP or LSP. Nor does it say anything about 'for the first time the ASI exceeded (passed) the previous HSP or LSP'.
This is 'significant' (DAMN!!!) BECAUSE:
Now turn to the work sheet example on page 103.
'Day 10' SPECIFALLY (another DAMN!!!) says: '... On Day 10, the ASI exceeded 104 for the first time. We therefore entered an order on Day 11 ...'.
Now my point is this:
Take a look at the associated chart.
Yes I agree that on 'Day 10' the ASI DID INDEED exceed 104 for the first time and I can see where the order was placed on 'Day 11'. NO PROBLEM SO FAR EXCEPT FOR THIS: WHAT IF the price had gone WAY PAST the high on 'Day 11'??? At that point the ASI WOULD STILL have 'exceeded 104 for the first time'. However: there is no way that if that had happened you would have been able to 'get in' at '46.05' UNLESS you had ALREADY PLACED YOUR ORDER on 'Day 7' i.e. the day after the HSP was formed!!! Do you see the difference??? Do you see the 'issue' here??? Which is it??? Do you place your order the moment a previous HSP or LSP has been (completely???) formed and is clearly visible OR do you place your order THE MOMENT the ASI exceeds (passes???) the previous HSP or LSP OR do you wait for the ASI to CLOSE above or below the previous HSP or LSP and ONLY THEN place your order???
Take a look see!!! I'm DYING to get and answer on this because I believe this is where the 'issues' with this system lie.
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I think that 'Day 7' is not the correct time to place the order. It might be possible that the order would be hit by a peak, while the ASI would not necessarily ever cross contrary the previous significant HSP or LSP.
The second option "do you place your order THE MOMENT the ASI exceeds (passes???) the previous HSP or LSP" is contradictory with the conclusion not to place an order until after the close of the daily bar, as far as I have understood all this. So I would ignore it as well.
So, if the price is then "way past the high on 'Day 11'", you are then left with 3 alternatives:
a) Do nothing, just ignore the trade and consider it as a lost one.
b) Place the order at the original entry point and hope that the price will dip enough to pick the trade. If it refuses to dip, see (a).
c) Place a market order at whatever the price is after the ASI close.
My choice would be (b), as I think it is best in line with the overall concept in these systems. Market orders have been earlier classified as inferior ones in this thread, and therefore I would ignore (c).
I hope I have now caught up with the posts about SIS and can start introducing it into my toolkit.
J.