Good (Thursday) morning all.
I did not trade much yesterday as it is our summer here now and sometimes we have the most spectacular thunderstorms and we had one yesterday. With my experience in the computer business I’ve learned that NO amount of lightning / power protection can protect you from lightning damage especially a direct hit so I unplug and shut down everything when this happens (if I have open positions that need to be maintained I use my mobile phone / WAP to connect). Yesterday’s storm lasted most of the afternoon and evening so I ‘took a break’ instead!!!
Anyway: today is a great sunny day and I’m trading the SIS with great success again. The more I ‘work’ this system (now) the more I ‘see green’ on my platform I’ll tell you. It would seem that even if you’re stopped and reversed at a loss a few times: if you just keep placing your orders you do eventually ‘come out on top’ no matter what (even if those orders are executed because of an instrument or pair trading in a range i.e. although the orders may be erroneoulsy executed you must also realise that your SAR positions are so close that the losses are minimal and when the price of the instrument or pair does break out you’re already in the trade).
One thing that has not been discussed much here are ASI trendlines. I did ‘touch’ on this subject earlier in the week but I’ve been looking at some more examples on different charts and they certainly do have GREAT merit (these are not detailed in ‘the book’ by the way). For one thing: it’s REAL easy to see when an instrument / pair is trading in a tight range because the ASI makes this obvious (more so than looking at the price chart) and, if you’re like me who has always had ‘issues’ being able to recognise or draw trendlines on a price chart, this is ‘for you’!!! Take a look at the attached chart and you’ll see what I mean. In the very first example it’s quite easy and obvious to see when the price of the pair broke out from the range. Your order would be placed after the close of the bar that resulted in the ASI closing below the trendline. Look what happened to price after that. You would still use your SIS SAR rules once in the trade of course and follow the trade through normally. Additionally, in most cases, the close above or below the trendline is confirmed by a proper SIS signal anyway. I normally use the two previous ASI peaks or troughs as the points to draw my trendline but sometimes (as in the attached example) you’re lucky to get three, four, maybe five points of reference for your trendline. (How this could be automated I do not know J.).
Later.
Dale.
P.S. I’m only going to attach charts once they have been zipped using WinZip because this site has habit of compressing any graphics posted and sometimes, especially with fine detail, they are impossible to make any sense of.
gbpcadasitrendlines.zip (59.7 KB)