Friday, October 24, 2008

Think out loud #1

I am now pondering if I should limit my number of trades to limit being affected by the crazy market swings, especially in the current market. But then there's another part of me that is afraid that if I do so, I would miss the real move when it has gone past the ding dong stage. I was also thinking if for example I go long after CCI goes past -100 and then it goes back down should I sell my position and then go back short and then go long if it goes above -100 again?

After thinking it out, I have decided that my strategy would only involve 3 entry criterias.

#1. Go long when CCI goes lower than -100 and then reverses back to cross -100 to the upside.
#2. Go short when CCI goes above +100 and then reverses back to cross +100 to the downside.
#3. Reverse the position when it crosses above zero and then back below and vice versa (Below and back above for short positions).

So this means that when you go in long put a stop and let it run. If it got stopped, and CCI went below -100 again, go back Long when the long criteria is met, even if it is within the day.

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