2 replies to this topic

[CLK]

I'm working on an index trading system, for short term trading. Seems to me the best strategy is use the same lot size on all trades, or maybe fewer if the signal is weak. Using a wide stop and no pyramiding with a decent system should generate good returns and minimize drawdowns. I know some like to scale in, I'm not used to that, maybe I can use that occaisionally, limiting to one add.

Edited by CLK, 06 January 2007 - 09:10 PM.

[Rogerdodger]

CLK,
I like the option of scaling in and out.
I'm a craps player. I can hang a long time buy taking early profits and then playing with the "house's money" while the high rollers are parlaying every win but often they walk away empty.

You can take partial profits and move the stop on the remaining to breakeven, etc.
On some of those RSI systems where you sell at 50 or 70 etc., you may miss a HUGE move if you sell all at the trigger.
The opposite is true of buying since you may be getting in at the beginning of a crash!
Notice the RSI 2 system says "Buy an additional unit if the RSI 2 falls 5 days in a row."

I picked up an idea from Linda Bradford Raschke's site.
I think she applied this to vst term trading but when a buy signal generated, you buy 1/2 position at market to make sure you get into a move and then place a limit order on the second half thus you don't risk getting a ridiculous fill on the whole order.

[dcengr]

PTJ says "losers average losers". You can plop down a position size, if it goes against you, take some off. If it goes for you, put some more on during bounces. To make this work the best, you must pick the IT trend change. Anything else means sitting in a house of pain. You don't want that.