- Joined
- 22 August 2008
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Hi there.
Had a chance to read through " Stuff ".
I don't wish to add only that we are looking for a measurable set of conditions
So this can be tested.
It is not known whether the conditions chosen are indeed " correct " until placed into a formula which can be tested.
Yup - ideally against a set of data that can support a statistical significance. Ie between 500 to 2000 data runs.
T/H has suggested a low volume rise could signal a change of sentiment.
Tech would suggest that Shorts would be un wound in selling volume not buying volume.
So I would expect any turn to com after some exhaustion of selling.
All of these hypothesis have to be tested against like stocks past data.
Yup but we know where to find that data.
Experience has also shown me that prolonged down moves rarely " v " bottom and are likely to rally then fail once again.
Consolidation --- sideways tends to pre cursor sustained up moves.
A few questions for you on the above.
Rally then fail. Is the rally worth it? IE does the rally give us a beneficial win/loss with a high expectancy?
I've shown in your thread one of the things I do in relation to Hard pivots and Soft pivots to manage ongoing trade positions. At the moment in this system we've spoken about what we are looking for, what we might measure it against, what we might use to trigger...but we're yet to discuss under what conditions we will exit.
So we have the situation where a change in trend has occurred (albeit from a descending one to a neutral one) - what's our downside risk? Failure to result in a V pattern emerging means what to our bottom line?
Mean reversion in my experience works best in corrective up moves--- unless your adding or entering shorts.
In the end it will work or not in the formula tested.
Want to give the Chart the Tech/A onceover?
Cheers
Sir O