We’re still looking at the way swing traders — those who don’t monitor the market during the regular trading session — could profit from the system calls Nat posts before the day session opens.
Using the same simplified trading method outlined n the previous post, we will be posting week-by-week results for the e-mini futures (ESH6).
The oil trades will still get a cursory glance, but the initial results didn’t give good outcomes for swing traders.
Here’s the results for the first week of February:
One issue is immediately apparent: a lot of the intraday price action congregates near Nat’s inflection points, so they tend to be areas where the price bounces around a lot.
We’ve been using a tight stop (3 points) and re-entering trades the next time the entry price is touched after the next five-minute bar. That means on days like Friday when the price whipsaws across the buy line, (see chart) we get stopped frequently.
If we don’t re-enter, we miss some very substantial moves.
We’ve been exiting the trades when the price reaches the control line or market-on-close. On a day like Friday, a different exit (after 5-10 points profit, for example, or a trailing stop) would have turned two of the losers into winners.
These are two crucial issues: where to cut your losses; where to take your profits. If anybody has ideas or suggestions on how to balance the two, please drop them in the comment box below.
If you’re interested in running simulations to se how the alternatives might work, you can download the necessary data from the previous post.