All you need to trade is a horizontal line - TheRumpledOne

This is a discussion on All you need to trade is a horizontal line - TheRumpledOne within the First Steps forums, part of the Reception category; Originally Posted by TheRumpledOne You it is funny that so many people try to find a way that the Buy ...

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Old Feb 7, 2008, 8:27am   #43
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Originally Posted by TheRumpledOne View Post
You it is funny that so many people try to find a way that the Buy Zone won't work. They will spend hours, days, weeks, etc.. trying to prove it doesn't work.

If they would only realize that if they looked for how it could work for them, then they would be on the winning path.

I hear from people on almost a daily basis who are thanking me for showing them the Buy Zone because, for once in their trading careers, they are making money.

and this is exactly what is messing my head up right now.......im making everyday so far except one day with the buyzone, but people say it cannot work in the long term...................grey1 says this is like trying to rob a bank and you only get rewarded because you are lucky, it's really confusing i must admit but maybe if it's working then carry on, should we listen to people or not?.......i just don't know, see grey1 knows what he is talking about of course and his views must be respected but has he ever tried a style like this to make such assumptions?


jason
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Old Feb 7, 2008, 9:12am   #44
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grey1 says this is like trying to rob a bank and you only get rewarded because you are lucky
I think you have taken his comments out of context. He was referring to those who claim they can get a 100 point run using momentum trading and more specifically on a consistent basis. BZ is very different because the targets are so small that you would have to be at the exhaustion end of any momentum run for it to fail. In other words you would have to enter a trade at the exact point where the market is about to reverse to consistently lose. I have yet to meet anyone who is capable of picking the top or bottom of a market with any consistency and especially in very low time frames. Most momentum runs don't begin and end in the time frame used for BZ trades.

That said I have set arbitrary times and found that the principle behind BZ will work at any time you choose, it doesn't have to be on the hour. The key to success in this is the small target and in other definitions is known as hit and run. I have developed my own approach that has worked well so far as I am entering trades based on exhaustion in the opposite direction and so far it is giving good results but it is early days yet.


Paul
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Old Feb 7, 2008, 9:54am   #45
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For me, any strategy user thats risks 8 pips, and is then happy to recoup a 4 pip profit, without having a very high % of winners (75% or more) is engaging in kamikaze trading.

For me, because there is no logical reason why the BZ lines provide any type of edge in terms of if price hits the BZ long line first, there is a 75%+ chance that price will go 7 pips into profit, before retreating back to the 7 pip SL, i see no reason to credit this approach with any merit.

Sure, it may not go +7 pips before retreating to -7p SL, it may go +5 or +6, & had you been quick enough, you could have bagged a FEW pips. But this takes us back to the basic problem of being happy to bag 4 pips while risking 8 or so pips. Not good if you ask me, unless you can achieve 75%+ winning signals, which my analysis has shown is not the case with BZ, and there is no logical reason why there should be such an edge in terms of winning % as the entry signals are just at random points on a chart.

Therefore I personally have abandoned BZ as a non-starter. But thats not to say it can't work for others.
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Old Feb 7, 2008, 10:08am   #46
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My risk is 10 and profit is a minimum of 12 but when the momentum keeps going it is easy to get a lot more than 2 to 1 Reward to Risk. So far it is working well but like I said I am only using the principle of BZ and have developed my own approach. I should add that this cannot be successful using SB or Bucket shop, it is essential to use a direct access platform.


Paul
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Old Feb 7, 2008, 10:12am   #47
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My risk is 10 and profit is a minimum of 12 but when the momentum keeps going it is easy to get a lot more than 2 to 1 Reward to Risk. So far it is working well but like I said I am only using the principle of BZ and have developed my own approach. I should add that this cannot be successful using SB or Bucket shop, it is essential to use a direct access platform.


Paul
Why?

Whats wrong with worldspreads & their 1-pip 0800-1600 uk time EURUSD, AUDUSD & USDJPY spreads.

Thanks.
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Old Feb 7, 2008, 11:13am   #48
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It is to do with speed of execution which is critical to success of this approach. It takes me less than 0.5 seconds to decide to take a trade, hit the hotkey to enter and get filled. The same is true to exit the trade and when you are taking small profits then every point or pip counts. The commission I pay is less than 1 point in value and so far my trades have lasted a maximum of about 61 seconds. I will see how it progresses over a longer time frame but so far it looks good just like jayjay121 has been saying. I am almost certain that using SB or other non ECN will result in greater slippage, slower fills and as such less profits which for something like this is very costly over a large number of trades.


Paul
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Old Feb 7, 2008, 11:20am   #49
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Originally Posted by Trader333 View Post
My risk is 10 and profit is a minimum of 12 but when the momentum keeps going it is easy to get a lot more than 2 to 1 Reward to Risk. So far it is working well but like I said I am only using the principle of BZ and have developed my own approach. I should add that this cannot be successful using SB or Bucket shop, it is essential to use a direct access platform.


Paul
Yes i was also thinking of using the entry lines with my owned customised R:R ratio (max SL of maybe 10 pips & PT of maybe 20 pips, alongside some kind of trailing SL), but to be fair did not look into this in detail.
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