Billy; How do you decide what levels will be included in the different clusters?
Thank you for your time and patience,
Bill
Billy; How do you decide what levels will be included in the different clusters?
Thank you for your time and patience,
Bill
Sorry Bill, but this is part of the proprietary elements of the methodology, so I won't give much details.
The starting point is to define the first clusters as a normal range that could be made on the next day. The second clusters are the ranges that could be made on a strong trend day. The cluster strength will give you the expected ease of movement in each direction.
The proprietary details are mostly in what optimal ATR and multiple of ATR to choose and it is different with each instrument. But I hope you get the concept and idea.
Billy
Billy; When we add to a position or get in late on a Strong Buy signal, like IWM has now, is there a formula or methodology you can provide us to manage the trailing stop after the first day or should we just move the stop to the "Management of an existing position" stop level?
Thanks for all your hard work. It REALLY is appreciated,
Bill
Bill,
Ideally you should enter at the limit price i.e. 77.77 on Monday and start with the new position's initial stop (75.99) or 2.29% away.
Trailing the stop thereafter is depending on your own trailing techniques. Since the stop is a function of ATR, a good guideline and suggestion would be to keep the same % difference of 2.29% from any close above your entry, never lowering the stop. If you can enter at 77.77 on Monday and the close is 78.25, you raise your stop to 76.45 and so on on the following days.
Your trailing stop will progressively catch up with or even overshoot the robot's existing position's trailing stop, at which point you may start trailing with the exact same stop as the robot.
Billy
Last edited by Billy; 06-19-2011 at 11:52 AM.