gyzhao - remember officially it's a daily system, if
at the end of the day, it's still on a sell, no big deal, no trade
for the system. my 1 min chart also provides some nice
guildlines.
please see the statistics to the Renko system. I've
discussed this before in the past many times. After a huge
winning trade, the odds of the next trading also being a large
winner is not good, in fact the stats are better if you skip the
next trade.
Now this doesn't mean that you have to skip the next long trade,
but it does tell you not to expect a huge winning trade from it.
You could for example exit before the system did via using a
60 min chart, or Stochastics or RSI getting overbought etc.
The reason why this occurs is because Renko systems
follow price and thus Elliot Wave counts. Think about it like
this, after GDX puts in a confirmed bottom, then the first move
higher should either wave a wave A or a wave 1, this means that you
ALYWAYS ALWAYS get a pullback, either in a wave 2 or B, and it's on
that next pullback where the system can have a whipsaw. The
odds favor wave 1 and 2 being whips or A and B. It's
generally the third trade, which would be a long, that has the
potential to be a big winner because it would either be a wave C or
a wave 3. Hopefully this makes some sense. see the
graphic
the point of my post is to just make sure you don't bet the farm
thinking that the next GDX Renko system long will be a huge winner,
when in fact odds favor that it won't be.
Also I know how new members tend to think, they take one trade
of a system like the GDX Renko system and then say, "ahh the system
sucks, it doesn't work if that trade happens to be a minor winner
or whipsaw", nope, you cannot think about the system in that way
off one trade, and you need to understand the dynamics of how it
works and the odds of the trades.
and again you don't have to strictly adhere to the
rules, you can take profits early at times when you think trades
have a whipsaw probability.
I will expand upon this in the near future and I'm also adding
some additional rules/guidelines such as looking at RSI and other
things.
gyzhao - remember officially it's a daily
Some Short Ideas Updated
Posted by matt on 17th of May 2012 at 12:26 pm
gyzhao - remember officially it's a daily system, if at the end of the day, it's still on a sell, no big deal, no trade for the system. my 1 min chart also provides some nice guildlines.
otherwise do you trade anything else besides GDX?
I set up a good
Posted by gyzhao on 17th of May 2012 at 02:11 pm
I set up a good stop loss. Thus everything is OK.
GDX Renko system trade statistics discussion
Posted by matt on 17th of May 2012 at 02:36 pm
please see the statistics to the Renko system. I've discussed this before in the past many times. After a huge winning trade, the odds of the next trading also being a large winner is not good, in fact the stats are better if you skip the next trade.
Now this doesn't mean that you have to skip the next long trade, but it does tell you not to expect a huge winning trade from it. You could for example exit before the system did via using a 60 min chart, or Stochastics or RSI getting overbought etc.
The reason why this occurs is because Renko systems follow price and thus Elliot Wave counts. Think about it like this, after GDX puts in a confirmed bottom, then the first move higher should either wave a wave A or a wave 1, this means that you ALYWAYS ALWAYS get a pullback, either in a wave 2 or B, and it's on that next pullback where the system can have a whipsaw. The odds favor wave 1 and 2 being whips or A and B. It's generally the third trade, which would be a long, that has the potential to be a big winner because it would either be a wave C or a wave 3. Hopefully this makes some sense. see the graphic
wave diagram and box text GDX possible wave count
Posted by capital1 on 17th of May 2012 at 03:05 pm
wave diagram and box text for GDX
Mat,
can you put that info someplace I can print it out? thanx!
the point of my post
Posted by matt on 17th of May 2012 at 02:43 pm
the point of my post is to just make sure you don't bet the farm thinking that the next GDX Renko system long will be a huge winner, when in fact odds favor that it won't be.
Also I know how new members tend to think, they take one trade of a system like the GDX Renko system and then say, "ahh the system sucks, it doesn't work if that trade happens to be a minor winner or whipsaw", nope, you cannot think about the system in that way off one trade, and you need to understand the dynamics of how it works and the odds of the trades.
and again you don't have to strictly adhere to the rules, you can take profits early at times when you think trades have a whipsaw probability.
I will expand upon this in the near future and I'm also adding some additional rules/guidelines such as looking at RSI and other things.
unless gold keeps going straight up.. it should at least test the 1168 ish area
Posted by zach06 on 17th of May 2012 at 02:46 pm
on the short term
ANYONE KNOW THE OPPOSITE OF TVIX?
Posted by harveykoss on 17th of May 2012 at 02:48 pm
be extremely cautious trading those
Posted by matt on 17th of May 2012 at 02:49 pm
be extremely cautious trading those VIX ETF's, I've seen people get blown up with those, too volatile