Regarding the PMO system - higher low stop method

    Posted by matt on 22nd of Nov 2019 at 11:23 am

    I've discussed this before many times but I think the concept went over your head or you many of you didn't pay good attention. Also it's hard to show without using a video to point out exact things. Here's a couple quick videos I recorded using Snagit, honestly I need to make a longer detailed video via Camtasia because  Snagit is limited to 5 min so I constantly run out of time.

    My method proposes instead of selling your full position when the PMO falls back below 66% (remember I'm the one that came up with that level in the first place), instead sell only 50% of your long position and keep the remaining 50% via a stop at the previous higher low.  Many times in nice uptrends you will find that the PMO will constantly go on a buy and sell signals, getting you in and out unnecessarily, while this method allows you to keep a 50% trailing position the entire time.  Also you have to have a stop that is outside of the PM because sometimes the PMO goes on a buy signal and doesn't go back over the 66% level, thus you need an alternate exit anyway.

    Here's  a video that t I very quickly threw together, it's rough and hurried but you get the idea. I made a second one however it got messed up. I'll make a longer 20 min versions with Camtasia when I have time

    Video Link

    wouldn't surprise me to see

    Posted by matt on 22nd of Nov 2019 at 05:29 pm

    wouldn't surprise me to see some push up early next week with the holidays

    Great video, makes perfect sense...btw,

    Posted by cozz101 on 22nd of Nov 2019 at 11:52 am

    Great video, makes perfect sense...btw, I know Renko and PMOBUYALL signals often overlap but do you find that one is more consistent and/or later signal? Renko has not gone on a sell signal yet. 

    Renko's can be deceptively good

    Posted by matt on 22nd of Nov 2019 at 02:48 pm

    Renko's can be deceptively good looking because of how the noise is filtered out but in practice are not always that way, just like being at the bar at 4 am after way too many, all the girls look good. 

    again with any indicator type system to me price action is king, one should incorporate price action into the indicator systems and that's where the higher low stuff comes in, I'd use it with the Renko stuff as well.

    Matt - In regards to

    Posted by shecar on 22nd of Nov 2019 at 03:59 pm

    Matt - In regards to coupling price action w/ indicator, selling using the higher-low stops make sense and could work with many indicators, but what would you recommend for how to buy back in?

    West coast it would be

    Posted by ssaffer on 22nd of Nov 2019 at 03:51 pm

    West coast it would be after 1 am.   Ex. last week price kept pushing higher even though we saw bearish divergences across the board and volume was declining. That being said going short would have not been a bad idea as the market kept stair stepping up and up.  then finally pulled back a little this week.  Indicators are necessary to know where to drive the boat( Buoy markers) but you have to always be alert for a change in tide, winds, storm fronts when you are out in the open water.  A safe watering hole can easily become a trap if you are not paying attention to the tide, wind speed, barometer, etc...  I use boating because I love to go deep sea fishing and sailing and have learned some valuable lessons out there.  

    so basically current situation on

    Posted by matt on 22nd of Nov 2019 at 11:43 am

    so basically current situation on that PMO you would have sold 50% of your long position on the PMO below 66% that occurred yesterday but still keeping 50% with a stop at the last higher low.  

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