Buy Sell Zone on the Russell
Posted: Wed Mar 14, 2007 3:51 pm
I've had a request from a couple of people to show my setup for the Buy Sell Zone on the Russell. The settings I use are .5, 1, 1 for the BuyZone, BuyZoneHI, BuyZoneLO inputs.
Today was a very straight forward day and you could have easily bagged +1.5 points. I'm looking to enter the zone for a buy zone trade this morning at 776.2 and exit at 776.7 (five ticks or $50/con). On the sell zone I'm looking for an entry at 775.2 and exit at 774.7. If things go wrong I look to exit at 6 ticks (5 tick stop market order).
So here is my expectancy with a with an 80% win ratio:
5 ticks * 8 trades (40 ticks) less 6 ticks * 2 trades (12 ticks) = Net 28 ticks or about 2.8 ticks per trade.
With an average of about 3 trades per day I can expect to net about +8.4 ticks per day or about $80 per day per contract. Trade this with 5 contracts and you're looking at $400 per day. Easy.
So you might be wondering where I'm getting my "statistics". Simple, this has been my observation so far. It isn't statistically significant (yet) with a mere 15 trades (need at least a minimum of 30 to be significant). So if you decide to use this - use your head first and paper trade it!
BTW, this is certainly not the only way or even the best way, it's simply one way of looking at the Buy/Sell zone on the ER2. I haven't even bothered to use Avery's statistics in Radar. So if you think your way is better, then please post it and let me know. Thanks.
Today was a very straight forward day and you could have easily bagged +1.5 points. I'm looking to enter the zone for a buy zone trade this morning at 776.2 and exit at 776.7 (five ticks or $50/con). On the sell zone I'm looking for an entry at 775.2 and exit at 774.7. If things go wrong I look to exit at 6 ticks (5 tick stop market order).
So here is my expectancy with a with an 80% win ratio:
5 ticks * 8 trades (40 ticks) less 6 ticks * 2 trades (12 ticks) = Net 28 ticks or about 2.8 ticks per trade.
With an average of about 3 trades per day I can expect to net about +8.4 ticks per day or about $80 per day per contract. Trade this with 5 contracts and you're looking at $400 per day. Easy.
So you might be wondering where I'm getting my "statistics". Simple, this has been my observation so far. It isn't statistically significant (yet) with a mere 15 trades (need at least a minimum of 30 to be significant). So if you decide to use this - use your head first and paper trade it!
BTW, this is certainly not the only way or even the best way, it's simply one way of looking at the Buy/Sell zone on the ER2. I haven't even bothered to use Avery's statistics in Radar. So if you think your way is better, then please post it and let me know. Thanks.