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Sunday, March 1, 2009

4-8-21

Why does it work? I don't have the answer. My hypothesis: If you are following the herd, are you in the front or in the back?

Full disclosure before we go any further. The system has been great for me day trading using the following time frame 3m,5m,5d5m,10d60m. I have not been sucessful using the daily chart. The last attempt to anticipate the cross above buying $THOR was a disaster (bottom fishing)

IT'S GOOD TO HAVE IDEAS; HOWEVER, IT IS BETTER TO MEASURE THE EFFECTIVENESS OF THE IDEA.

Before / After: which is more preferable?








On a little tangent and hindsight is still 20/10.

Let's see why 4-8-21 may be better.



From the charts above, you can see that 4-8-21 get you into the trend sooner and keep you there longer. Doesn't that make perfect sense, because you are now riding the uptrend?

Look at the distances betweem moving averages. Look at how the 20ema was breached while the 21sma was not.

My SRS tweets for the week of Feb9-Feb13

Conclusion: there are many systems out there, some are costly, some are cheap, some are free, some works, some don't. There is no one size fit all; therefore, use what works for you. For me this is it.