Saturday, 31 August 2013

More Outside In

The chart below shows Flo trading in Bloodhound using the LURenkos.Flo is fading the moves as she identifies areas where the market is likely to turn. If she's wrong, she doubles down using very specific rules. She also has a third double up her sleeve in case the initial trade was very early which it can be. Lots of people say that this is exactly the wrong thing to do and lots of people never get to CP. The math does not lie.

I've got a couple of guys (why do so few women trade?) starting algo training and we will be working a lot on Outside In trades to get them to CP as hybrid traders. Why Outside In? Firstly, because of the way that markets are trading now and secondly because Outside In trades are easier to hold. Learning the skill to know when a trend trade should be cut is more difficult than cutting an Outside In trade. If going short at 31 was a good trade (met trading plan) then adding to the short at 33 is even better waiting for the price to at least revert to the mean. The drop dead stop that has been backtested is the cut. This is a very high win trade.

What we'll be doing is having FloBots entering trades that have been backtested to be over 70% winners. Creating these algos means that a trader can be relaxed until the alarm goes off and know that the trade they are entering has an edge. Managing that trade manually gives them a lot of flexibility in managing the trade to suit their trading style within a very specific trading plan that they have created.

Everyone who is taking Monday off should enjoy the long week-end.

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