black bear
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Its an upside down world for sure
Hi Scott
Very Good post and thoughts Scott
The market makes many Highs and many Lows in a day but only one true High and one true Low
Andy
What about a contrarian setup!!!
I've been pondering the amazing number of long signals given off at tops just as it drops, and same for short signals. Therefore I wonder just out of humorous curiousity, what if I took the opposite trade for each signal???
Here is what I got. I did a manual backtest of 2 days 1m data and tried to identify those periods that were out of sync. Usually triggered by some very sharp up and down moves with wide ranging candles. Very choppy and ranging.
These are the trades and stats I came up with (note also that each exit was totally and purely mechanical based on the changing SAR or MACDH. They were surprisingly non-lagging unlike the problems with exits in the normal system.
The key is when a long signal is given, go short instead and exit when the MACD or SAR changes. It is as though the MACD has been shifted forwards or backwards by 4 or more bars so it is out of line with the SAR. When the volatility narrows again with small candle bars either beginning to trend or a narrow range then things get back in sync and time to abandon the contrarian strategy.
Anyway, here are the trades (not including the spreads or commisions). I entered each long at its highest price, and each short at its lowest so these are conservative profit/losses and would probably cover the spread. I gave each trade its lowest proft rather than its best.
2 days 1m data.
20 out of sync trades.
17 profits
3 losses
All profits small.
But every exit purely mechanical with no second guessing.
+76.1 points total profit.
-6.8 total loss
Biggest win +12.8 (only 5 trades at +5 or above, so small profits)
Biggest loss -5 (based on a -5 stop loss)
Just something to look at that I found amusing. I haven't had chance to really nail it down because I just got the idea at work tonight and remembered to do a manual backtest when I came home.
I would appreciate your ideas on this. Is it too risky? Seems less risky and more mechanical than the other way?? or am I being very silly??
I looking at this as a solution/focus problem solving exercise. I am constantly looking for little caveats and improvements. I'm t
regards,
Scott
Hi Scott
Very Good post and thoughts Scott
The market makes many Highs and many Lows in a day but only one true High and one true Low
Andy