The irony

[Taylored001]

I hope this can provide a helpful insight for alot of you struggling traders -

Once i was demo'ing a strategy for 4 months unsuccesfully. It was losing about 10% consistantly per month.
What i did is take the range from the FTSE100 from 8.30 to 11.30 and enter long at the break from the high and short at the break of the low, with stop loss of 30 and target of 20.

Now what i had here was a strategy that was consistantly losing, with a set stop loss and set target Then i had a 'Eureka' moment.

What if i did the same strategy, but reversed it. So instead of entering long at the breakout of the high range, i would enter short with a stop loss of 20 and target of 30 and vice-versa for the low of the range.
Right enough it has worked and i'm still demo'ing it. On average currently 13% per month. ROFL

The irony... Do you see though that a strategy that can lose, can win doing the opposite - Just a little food for thought for you all.

 

[Hotch]

Not really sure I'd say it was ironic, obvious, yes.

Impressive how you've gone from -10% to +13%, maybe you should reverse it and then reverse it again etc

 

[shadowninja]

I think the problem with your original strategy is that the breakouts are far less likely but when they happened you only took a small percentage of the big move. Whipsaws and bounces off the channel top are more likely but give you a smaller profit.

 

[rawrschach]

This is actually not a bad method you have yourself here.

 

[tomorton]

I hope this can provide a helpful insight for alot of you struggling traders -

Once i was demo'ing a strategy for 4 months unsuccesfully. It was losing about 10% consistantly per month.
What i did is take the range from the FTSE100 from 8.30 to 11.30 and enter long at the break from the high and short at the break of the low, with stop loss of 30 and target of 20.

Now what i had here was a strategy that was consistantly losing, with a set stop loss and set target Then i had a 'Eureka' moment.

What if i did the same strategy, but reversed it. So instead of entering long at the breakout of the high range, i would enter short with a stop loss of 20 and target of 30 and vice-versa for the low of the range.
Right enough it has worked and i'm still demo'ing it. On average currently 13% per month. ROFL

The irony... Do you see though that a strategy that can lose, can win doing the opposite - Just a little food for thought for you all.

Sounds well worth looking into. For a couple of months I was trading similarly to your reversed strategy - going shirt after the first 1-2 hours if we were up on the day, long if we were down. Looking for an 80pt gain this was about 55% successful but I think I should have been looking for about 30pts as you set out. My entry point was based on time. But how do you identify your entry point? - surely, you only know the high or low of the period at the end of the period, by which time the move back from the extreme may well have already completed?

 

[Taylored001]

I have about 30 variations of the 11.30 strategy that i've been demoing lol I test so many strategies at the same time its crazy. And so far this one isn't bad but best has been this variation -

5 points beneath 8.30-11.30 high, enter, stop loss 10, target 15 for long
5 points above 8.30-11.30 low, enter, stop loss 10, Target 15 for short.

16% consistantly for about 5 months. Going live soon.

 

[shadowninja]

The only problem with this is that if things get hectic again, the volatility will increase and your entries will be blow apart as 5 points is now just noise and not a sign of the move you want.

 

[tomorton]

I have about 30 variations of the 11.30 strategy that i've been demoing lol I test so many strategies at the same time its crazy. And so far this one isn't bad but best has been this variation -

5 points beneath 8.30-11.30 high, enter, stop loss 10, target 15 for long
5 points above 8.30-11.30 low, enter, stop loss 10, Target 15 for short.

16% consistantly for about 5 months. Going live soon.

I still think the general principles of this type of trading are appealing but I am puzzled by your entry directions in the above.

What I mean is - your first strategy was based on break-out from early range but you found it a consistent loser. Therefore you flipped the strategy to make it a reversion entry, whereby your entry takes the direction of a reversion back into the range. But the strategy you give above is another break-out, relying on price action after the identification of the range to expand the range in the chosen direction.

What do you really mean to say? I'm not trying to pick holes, this style of trading has been a winner for me in the past so I have faith in it but I do need to refine my position management rules. I can't screen-watch daytime but I would be able to enter a single trade based on price action.

 

[Taylored001]

I still think the general principles of this type of trading are appealing but I am puzzled by your entry directions in the above.

What I mean is - your first strategy was based on break-out from early range but you found it a consistent loser. Therefore you flipped the strategy to make it a reversion entry, whereby your entry takes the direction of a reversion back into the range. But the strategy you give above is another break-out, relying on price action after the identification of the range to expand the range in the chosen direction.

What do you really mean to say? I'm not trying to pick holes, this style of trading has been a winner for me in the past so I have faith in it but I do need to refine my position management rules. I can't screen-watch daytime but I would be able to enter a single trade based on price action.

What i've found with this strategy is that in general, it goes 10 points above or below the breakout and then comes back... The one above has worked around 90% so far.

 

[rawrschach]

His point is that the strategy you outlined is still a breakout, unless you meant short ticks above the high and not long 5 ticks below.