Hi forrest, how are you mate? Im so busy I dont get on here much anymore. I talk to traders all week long and most of them are losing, making the same mistakes that I and most other people here made.A little knowledge is dangerous. However, occaisionally I meet a trader who is making a living consistanly over a few years and I quiz him on what hes doing and take notes. It seems they are all TA self taught experts with 5 yrs experinece or more. They all have a rigid system and stick to it religiously. As a result, Ive modified my trading as follows: 1-only take positions that line up with my view of the major indices. So as im long the xao, I might look for calls on something like anz that has a chart Im long on. As im short on tls and sideways on qbe, that would rule out any puts at all. 2-I use BBs and MMAs to determine that Id buy anz as it comes back to its trendline at around 18.50-75 . If it happens I trade, if it doesnt then I wait for another signal on something else. 3- exits are managed by a stop loss. Backtests show me that around 7-8% traillng stop loss works best, but 10% is also good.
This all seems to be what the good traders are doing, in simple terms. Im writing formulas with several layers of filters as we speak, so that I can backtest it on blue chips. I'll keep you posted. Good luck on qbe. I think puts are a possibility, but I see qbe trading sideways as the volatility decreases. Sell the straddle and watch them both expire worthless and keep the premiums. happy days AndrewK4
