TrendSurfer
109 posts
msg #83675
- Ignore TrendSurfer
modified |
12/1/2009 11:49:47 AM
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drew9
171 posts
msg #83702
- Ignore drew9 |
12/1/2009 8:21:49 PM
Since we are on the subject of Larry Connors - his TPS (TIme, Price, Scale-In) strategy is supposedly his best. I just ordered his book to learn more about this but does anyone have any insights on scaling into postions? This apparently goes against conventional wisdom of not averaging down in a trade but he advocates this - along with no stops for this type of swing trading. I am interested in what scale in percentages and number of days you might actually follow to scale in if the price keeps dropping?
For example, if your trade enters when RSI(2) drops below 30 and drops for two more days, you would scale in day one with 20%, day 2: 30%, day 3: 50% of your normal trade size. Just an example, but I was hoping some might have some success with this method and how you are utilizing it?
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TrendSurfer
109 posts
msg #83704
- Ignore TrendSurfer
modified |
12/1/2009 8:58:18 PM
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drew9
171 posts
msg #83706
- Ignore drew9 |
12/1/2009 9:48:02 PM
Hey it's not like Larry Connors is Wade Cook!!! He has written some of the best trading material and is certainly very highly respected. I am not opposed to spending a whopping $24.95 to learn some new tricks. So let's hear it - anyone use this strategy yet?
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BarTune1
441 posts
msg #83707
- Ignore BarTune1 |
12/1/2009 9:56:35 PM
Drew,
When you get Connors book, it will explain all his trading rules. All I can say is that I have traded Connor's rules, including:
1) averaging in on positions (which have pulled back further - i.e., averaging down on loss positions)
2) not using stop losses
More often than not, the loss positions have come back close to break even or made a profit in the end.
And, I have to say while I was a skeptic at first, his trading rules have consistently worked for me. In fact, I was up 6 figures early this year following these rules. If you follow the rules to a tee I would almost guarantee that you will make many profitable trades.
I would never say absolutely one way or the other - that us, to use stop losses or not use stop losses. It is, in my view, equally important, or even more important, to have a disciplined EXIT system. Connors exit rules have worked well for me.
Finally, if you follow the rest of Connors trading rules, you are usually buying pull backs of stocks in an uptrend, only on strong pull backs, and in conjunction with an overall market pullback (i.e., by timing trades relative to a VIX divergence for example). You can also short by reversing some of the rules.
Following all these rules has resulted in a 80-90% win rate for me. Maybe I was just lucky but I made so many trades that I dont think it was luck.
TrendSurfer has a different approach, which I am currently studying, which works on momentum and appears exceptional. His system relies heavily on stop losses as (correct me if I am wrong) they form a significant part of the exit strategy.
In any event, I find that comparing reversion to the mean strategies to momentum based strategies as different as comparing apples to oranges .... even though some of the components or rules of the systems may be similar.
Neither system is better - its really a matter of finding something that works for you and following it.
One more suggestion from personal experience - try to find one system with which to are comfortable and try to master it. Studying several different systems at once is no better than listening to all the talking heads on CNBC and trying to make sense of it. It is damn near impossible to keep the rules straight if you are following multiple systems.
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miketranz
962 posts
msg #83709
- Ignore miketranz |
12/1/2009 10:19:52 PM
"In all my years of coaching,I have never been successful using somebody else's plays",Vince Lombardi.Now if that piece of advice is good enough for Vince,it's good enough for me.Truth is,you're not going to find out what works in the market from a book,seminar,stock market guru who can't trade his way out of a paper bag or anyone else for that matter.Its all comes down to your own experience in the market,with real money,in real time.In my opinion,most of the material on trading,does not work in the real world.How do I know?Been there,done that.Think about this,you trade for 12+ tough years,become profitable,then sell you method in a book for $24.99? One last thing,if you don't use stops,or any other method of preserving capitol,you won't be around this game long enough to worry about anything else anyway.....
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TrendSurfer
109 posts
msg #83716
- Ignore TrendSurfer
modified |
12/2/2009 1:04:53 AM
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miketranz
962 posts
msg #83721
- Ignore miketranz |
12/2/2009 9:28:09 AM
TS,I've read most of Connors material.The one that stands out is "How markets really work".It's all about stats,probabilities,market edges tested over time.Good read and eye opener.The only charts shown in the book are directly related to the stats he provides.Check out 10 day Nasdaq lows.You'll be shocked to know that the percentages are with you for a long side swing trade on a reversal.......
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TrendSurfer
109 posts
msg #83753
- Ignore TrendSurfer
modified |
12/2/2009 4:12:41 PM
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drew9
171 posts
msg #83769
- Ignore drew9 |
12/2/2009 11:05:11 PM
TrendSurfer - what's up? I think most of us appreciate your input. Why the deleted posts?
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