I see you are a TS user have some knowledge of the Turtle system.
I have been interested in writing a strategy for the Turtle system in EasyLanguage.
Have you written one? Are you willing to share it if you have?
Or can you elaborate on the entry exit rules of the Turtle system to aid me in writing it in EL?
Your question...
Regarding different ways to use oscillators Marcel Link in High Probablility Trading offers both the above methods of using oscillators. His thoughts are that if you are buying an overbought market you may get stopped out a number of times before you find the beginning of a strong trend but it might be worth it if the trend is long enough.
That's not my style of trading but I see that pattern in stochastics more often on a 30 minute or higher chart than on a faster chart.
Faster charts are more likely (imo) to oscillate. The faster the chart the smaller the oscillation though that makes it harder to pay the spread. Taking trades where the stochs are generally going the same direction on higher time frames helps a lot.
Is the RSI basically the same at Stochastic? I saw an article about how traders waste time using duplicate indicators. I'd like to see that list again that shows what closely duplicates what. It suggested chosing one of each that follows price volume momentum sentiment. Then dump the others to keep it simple trade a less noisey environment. What do you think?
Entry rules
1. Get in on a 20-bar breakout.
2. Before reversing the trend using the 20-bar breakout there must be a losing trade in the opposite direction.
3. Always enter on a 55 bar breakout.
4. (Subjective) If the market is sideways use a 55 bar breakout.
5. Once there is a profit in one direction you can continue to trade in that direction but to trade in the opposite direction there must first be a loss.
Stop rules
1. On the day of entry use a 1/2 (Average True Range) ATR stop.
If the trade gets stopped out during the intraday trading then
get back in if the intraday market gives a new signal (makes
new lows or highs).
2. Use a 10-day trailing stop.
3. The day after the entry use a 2 ATR protective stop. Sometimes the 10 day trailing stop is too far away. The 10-day trailing stop assures you will not be risking more than 2-ATR on a trade (except when there is a gap open against your trade).
4. When the trade is at a 2.5 ATR profit move the protective stop
to breakeven.
5. Once the 10-day trailing stop or the 2.5 ATR rule moves the
stop to breakeven start using a wider trailing stop of 20 bars.
6. Once you are ahead by 10 ATR use a 3 bar pivot as a trailing
stop the 20 bar breakout as a trailing stop.
Additional Techniques
1. Enter additional positions at a 55-day breakout provided the
protective stop on the first positions have been moved to
breakeven.
2. After a big profit of 10 ATR or more do not trade in the
opposite direction for 45 bars using the 20 bar breakout method.
Use the 55 bar breakout instead.
3. Wait for a sideways market to start trading get in on a 55
bar breakout.
Money Management Rules
1. Do not risk more than 1% of your account per trade.
2. Do not expose your account to more than a 2 ATR risk at any
time.
3. Use fractional entry technique.
4. If in one trade wait for that trade to be moved to breakeven
before adding any new trades.
5. Trade the strongest commodity within a complex such as
grains currencies.
6. Trade when the volatility shrinks. When the volatility shrinks
by 50% it allows more contracts to be used for the same dollar
risk.
The Question: Is the RSI the same as Stochastics ?
My view would be: Yes they are more or less doing the same task. The RSI uses only closing prices while the stochastics uses three price streams (highlowclose) but the interpretation is almost the same.
These would be called co-related indicators.
Yet it is possible to use them to-gether as a trend - momentum combination.
Use a 14 period RSI. If the RSI is moving up we are in an up trend. Now use a 5-3-3 stochastics. This would be a very fast line. When this stochastics moves into oversold buy (this would be a dip in the main uptrend).
I've found RSI useful in trading .
I use several aspects of the indicator using a 14 period
As per rew Cardwell John Hayden.
Looking at the overbought areas not always at the 70 20 but depending where the current trend is .i.e. tring down use 20 60 in an up trend 40 say 80.
I like to use areas of support as given historically by the rsi look for these to break for a good move to indicate a change of trend . Trend lines being broken to give Trend line Breaks .
The most magical of Rsi though is the time when price rsi have a momentum discrepancy (hidden divergence). Anybody else use this doesnt seems to much said about it ?.
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