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Thread: I wish Cotton were here..

  1. #1

    Question I wish Cotton were here..

    Replaying the past, (February 2018, chosen at random) this is an example of pitting two ETF's (Gold, in this case) against one another with paper money.

    This move has netted a 21% return on an initial investment of ten thousand dollars, all on a single trade.



    The problem is: How do you know when the run is over?






    Some old things are lovely..
    Warm still with the life of forgotten men who made them.




  2. #2
    You can use move averages to pick up trends.. But the end of a run is very often characterized by a red candle sell off, straight down.

    You can use stops of course, but it would be nice to predict the end of a run with some degree of accuracy and simply cash out.

    The intraday volatility makes stops a less attractive option.





    Some old things are lovely..
    Warm still with the life of forgotten men who made them.




  3. #3

  4. #4
    I'm not going to go harass anyone on some other forum..

    Thanks though.





    Some old things are lovely..
    Warm still with the life of forgotten men who made them.




  5. #5
    The move averages really help identify trends.. I worked these out after talking to other traders.

    The light blue one is an exponential average on 30 days.

    The White and Red are simple move averages on 100 and 200 days, respectively.

    You can see the crosses between the lines. The exponential short term average crossover indicates the leading edge of a trend. That is where you want to be, and since they are inverse ETF's, when one goes up the other goes down.. Somewhat proportionally.

    Now.. When do you get out?

    If you wait for move averages to catch up, it's too late.





    Some old things are lovely..
    Warm still with the life of forgotten men who made them.




  6. #6
    Quote Originally Posted by Jhoffa_X View Post
    The move averages really help identify trends.. I worked these out after talking to other traders.

    The light blue one is an exponential average on 30 days.

    The White and Red are simple move averages on 100 and 200 days, respectively.

    You can see the crosses between the lines. The exponential short term average crossover indicates the leading edge of a trend. That is where you want to be, and since they are inverse ETF's, when one goes up the other goes down.. Somewhat proportionally.

    Now.. When do you get out?

    If you wait for move averages to catch up, it's too late.
    The time to exit is when the velocity and/or volume drops down in the direction of the trend. You may get out early but you will likely not be caught holding the bag in a sharp reversal
    Where is my fucking cat?

  7. #7
    Quote Originally Posted by Cotton1 View Post
    The time to exit is when the velocity and/or volume drops down in the direction of the trend. You may get out early but you will likely not be caught holding the bag in a sharp reversal
    Cool.. But over trading is kind of a problem as I will be under the PDT rule.

    So, I want to avoid that to the greatest extent possible. Always need a trade in reserve to stop out.





    Some old things are lovely..
    Warm still with the life of forgotten men who made them.




  8. #8
    That trade is now up to 26%, btw..





    Some old things are lovely..
    Warm still with the life of forgotten men who made them.




  9. #9
    Quote Originally Posted by Jhoffa_X View Post
    That trade is now up to 26%, btw..
    That's a good trade
    Where is my fucking cat?

  10. #10
    Thanks.

    Yeah.. I'm getting very good at identifying trends and making an entry..

    Now, I need to work on getting out with my bag of loot.





    Some old things are lovely..
    Warm still with the life of forgotten men who made them.




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