Should trades be managed ?
Certainly. Gemsbot is not incorporating trade management since this is not uniform for all traders. Trading capital, risk tolerance and profit expectation, are a few of the many parameters that not only differ amongst traders, but the same person may vary these over time, particularly when market conditions change.
Trade management and money management are subjects that we do discuss in our hotComm room, as well as the prevailing volatility which influences the levels at which profit taking or stop loss are set. You will find clearly defined profit targets and stop loss levels for each instrument and for trading 1 to 3 contracts in the Trade Management page. These are available only to our members and people on a free trial week, since they have been created for trades generated by GemsBot.
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Are there certain hours that trades are more successful ?
Yes there are. Observing the market action with GemsBot for more than two years now, we have been intrigued with the success rate of trades taken during three time frames of regular hours trading. They occur anytime within quarter of an hour before and after 10:30 ET, 13:30 ET and 15:30 ET.
The performance of these time frame trades is highly consistent. If you concentrate your trading only during these 90 minutes each day your will see positive results every week. Once you accumulate enough experience and profits with them your may gradually increase your maximum exposure to the market during these times enhancing your trading results.
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Can choppy periods be avoided ?
Yes they can. The biggest enemy of any trend following system, and GemsBot belongs in this category, is the choppy periods that we experience every day. Avoiding trading during these hours can indeed improve the trading results. On the other hand when a break out of a choppy period occurs, the performance of the break out trade is normally pretty good.
GemsBot handles choppy periods in two ways. First of all whenever it detects a choppy period the Market Status cells in the spreadsheet is showing the words Choppy Period. You could avoid trading altogether when the sign is on, or trade with fewer contracts and adding with Continuation trades, which normally mark the end of a choppy period. Also for each individual instrument periods when the market is Ranging is shown in the spreadsheet and again trading should be avoided.
Alternatively the Sync Trade. even better when it is a Triple Trade, is the one that when it appears, almost always, signifies the end of a choppy period. So, particularly if the choppy period is protracted, waiting for a Sync Trade is the sure way to avoid many small losing trades.
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