Strategy Trading

[capt_jmj]

The process of devising an effective automated day trading strategy is relatively straightforward, but it is helpful to have some appreciation of the indicators you will use and how they work. Two or three indicators working together in a complementary fashion should be all that is necessary to produce a winning strategy, and additional ones may actually hurt more than they help as they tend to begin to get in each others' way with increased complexity. You also have to have a sense of how frequently you want your system to trade and how much loss you can tolerate when the trade goes south, which together will define the range of your indicator thresholds within which you will optimize. Using the same indicators, a strategy built on a 1 min chart may look quite different, will normally trade much more frequently, and will likely produce vastly different results than one built on a 5 min chart.

[capt_jmj]

Here is an equity plot of a simple RSI/SS strategy with stops over the last 20 trading sessions...

[capt_jmj]

Strategy trading as it is implemented on the TradeStation desktop and perhaps other trading platforms as well provides some truly impressive capabilities and results. How would you like ~$30K/month net returns trading 2 to 4 NQ contracts, which would require a minimum running account balance of just ~ $16K? This isn't intended as a plug for TS (I just have my trading account with them), so you could use any desktop you prefer for trade execution or go strictly seat-of-the-pants. If anyone is still out there and reading my posts, I would like to extend an invitation to join an ongoing forum discussion ("blog" if you will) on strategy trading at our website. Some of you may be familiar with it as the "TMG Forum" (just Google "themerlingroup-inc"). Just send an email to "[e-mail]" if you are interested and I will set you up with complimentary access to the site. You won't have access to the paid subscriber links that allow you to see to the near real time TMG signal, but otherwise you would have full and unlimited posting privileges, unlike here. The same basic rules for decorum and mutual respect of the host and other posters apply.

[capt_jmj]

Okay, lesson learned with the RBTS board. If you find your way here, let's not repeat those mistakes. We all know who the management sides with, so that is a battle we will never win.