Buy Sell Zone on the Russell

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4x=0
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Postby 4x=0 » Tue Apr 10, 2007 3:05 am

The good news is that this method is so incredibly simple you don't need (although it sure looks cool) the ability to code 3rd party indicators. If you can observe opening price you can trade with the zones.


This is spectacular news. I will ask Avery. And I will hope he is as generous as you have been in your explanation.

Normally If TRO were presenting this trading idea I would not take it very serisously as a viable trading system - solely because avery is a one of a kind and something that works for him does so because of many unkown mysterious reasons that don't lend themselves well to the general population. However if this system has been working well for you Edward, then perhaps it is worth a look. I certainly think so.

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Postby eudamonia » Tue Apr 10, 2007 3:09 pm

4x=0,

Good luck.

Edward
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Postby Marci » Tue Apr 10, 2007 7:13 pm

Hi Edward,

where do you close a trade if it goes against you?
Someone uses the white line to close a trade, is this also your way?



I marked some possible trades for one day. Can you tell me the numbers of the correct trades?

Bets regards

Marc

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Postby eudamonia » Tue Apr 10, 2007 8:59 pm

Marc,

Those are all good examples of trades and pretty comprehensive. It's hard for me to tell you exactly whether I would have exited trades 3 and 4 before my hard stop loss (I usually use somewhere between 5 to 7 ticks depending on market volatility) without Dynamic support and resistance on your chart. I typically use Dynamic Support and resistance to keep me out of bad trades and I rather suspect that it would have kept you out of trades 3 and 4. Also I tend to be very impatient and if a trade can't get it done in less than 3 minutes I'm typically out (this may not apply well in the afternoon when trading is slower).

I typically only trade for the first 2 hours of the day, so that's why I couldn't confirm those trades. Also, even if 3 and 4 hit your stop loss of 5 ticks you would have netted 20 ticks. Not too shabby by anyone's standards.

Edward
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Postby Marci » Tue Apr 10, 2007 10:07 pm

Hi Edward,

this is the same day as shown above and I would like to discuss some of my thoughts about it:



Trade 1
Open of the candle is equal to begin of short zone. If you need a red candle to go short this would not have been an entry.

Trade 2
No trade - no red candle

Trade 3
Trade, loss of 5 ticks (sell at white line) - buy@817.30 / sell@816.80

Trade 4
Trade, loss of 5 ticks (sell at white line) - buy@817.30 / sell@816.80

Trade 5
Trade, win 5 ticks - sellshort@816.30 / cover@815.30

Trade 6
Trade, win 5 ticks - sellshort@816.30 / cover@815.30

Trade 7
Trade, loss 5 ticks (cover at white line) - sellshort@816.30 / cover@816.80

Trade 8
Trade, win 5 ticks - sellshort@816.30 / cover@815.30

Summary:
6 trades: 3 winners & 3 losers

Would these trades stick to the "original concept" of Buy Sell Zone?

Greetings

Marc

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Postby eudamonia » Tue Apr 10, 2007 10:37 pm

Marc,

Well here's how I would have traded it (which is all I can tell you).

1) I actually would have taken trade 1 on the 1st candle using a 1 min. candle. Since I actually took this trade I think it was doable. I agree that I would not have taken the subsequent trade on the 3rd candle. So +5 ticks.

2) Reversals in the zone are a tough call but strictly speaking no trade.

3) For me the trade must enter the zone clear and free of resistance. This never happened because resistance was in the way (also we never actually entered the zone). No trade.

4) This would have either been a full loser (-5) or a scratch depending on how long this trade took. I never like to hang out too long. But to be conservative let's call it -5 ticks.

5) As you took it was fine, although support was still in the zone so I would have taken 4 ticks and run. +4

6) +5

7) No way would I have sat in a trade for 20 minutes for it to hit my stop. These are scalps - not position trades! Most likely this would have been a small win or scratch. +0.

8) +5

Total net for the day +14 ticks.

Like I said I only trade the first two hours and my goal is to make 5 ticks a day.

Edward
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Postby Marci » Tue Apr 10, 2007 11:11 pm

Hi Edward,

thanks a lot for your answer!
There is one question left regarding trade no. 3.
Would you suggest to wait for the price entering the buy zone for a least one or two ticks and buy on a pullback to 817.30 (lower buyline). Now it's rather easy to see but I could imagine that the trend looks rather strong after the very long green candle (18:20) before trade no. 3.

Did anybody run stats on this strategy for ER2? I think backtesting this using Tradestation might not lead to reliable results...

Marc

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Postby eudamonia » Wed Apr 11, 2007 3:40 am

Marci,

Take a look at where resistance started the morning - at 817.40. It never was pushed up above that. You don't want to be the one pushing up above daily resistance - that's why trade number 3 wasn't tradeable.

Edward
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Postby TheRumpledOne » Wed Apr 11, 2007 6:40 am

You do NOT take a trade if the dynamic resistance dot is in the long zone or if the dynamic support dot is in the short zone.

Let someone else push the dot out of the zone, so on the next entry, there's little to no resistance to the price moving through the zone!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby TheRumpledOne » Wed Apr 11, 2007 6:45 am

Trades 1 and 2 are trades... we are NOT waiting for candles to close. They are clear shorts!

Trades 3 and 4 are NOT entries!!

Trade 7 should NOT be a loss... sometimes all you get is a couple of ticks... DO NOT BE GREEDY!

TAKE ALL YOU CAN. GIVE NONE BACK!

Don't turn a winning system into a losing system.

KEEP IT SIMPLE... THE ODDS ARE IN YOUR FAVOR!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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