Tuesday 30 June 2009

Is it mechanical?


Mechanical....this is open to interpretation. To follow a set of robust and rigid rules. Well, Stuarts rules are all over the place, 1 min he's saying 100% of your long entries are when MACD>=0, next he's saying as long as there's divergence.

Would mechanical mean you get an entry signal? Well you don't. You get =if(x+y+z)and(a+b+c) OR(if(d+e=f)AND (Y/2*4) THEN "Pull Trade". Something like this. It's just so subjective, has a reverse head and shoulders plotted? Is the right shoulder higher than left? has it made a higher high? What's the time from last cycle low? 15/30/45 mins? S1 which means lowest support point was 30 minutes ago, were now in a DRUP its at mid keltner this should now be a UC, weve got 30 mins since S1, were at 8550, theres positive divergence, right, it all lines up, click........oooops.... it carries on down taking out S1 and going lower.

This is so common. Not even Tradestation is going to give you any signals, just MAYBE signals.

Mechanical should be:

a) a clear set of rules

b) completely mechanical, it gives a signal, an entry price, target and stops

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