While basking in my apparent glory late Friday I decided to code up my idea and visually automate the entries. Worked like a charm, but oh wait it started showing areas on the chart that for all intents and purposes I should've been in, but I hadn't taken the trade. Worse was that many of these areas were losing trades. It was an odd mix of trades that I had seen in real time and taken and trades that I had just ignored and not looked at.
I THINK that my mind was playing games on myself with pattern recognition. Backtesting I would see a certain pattern that had worked and then I would apply my entry and management technique, but if the pattern didn't play out correctly my eyes would kind of skip over the entry as if it wasn't there. Needless to say its a dangerous game to be playing.
What is curious is that my live sim results were so out of this world good. It was reinforcing this misnomer. But having the computer "see" for me and really looking at what is there has forced me to reconsider things. Needless to say i'll be on sim until I can sort this a bit better and prove it in real time. I'm still CLOSE but i'm no where near what I thought I was. I guess the Lamborghini is on hold for now.
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4 comments:
How did you code up the high-low lower-high type stuff? Care to comment? Wondering what your heuristic is for determining this stuff. I guess scanning through a previous window looking for the highest point, then scanning for a bar with a lower high, but I guess what I wonder about is on the lower high, you have to qualify it some how as the ticks are streaming through. Just curious what your criteria was.
charts are optical illusions. we see what we want to see.
http://tacticalstrategictrader.blogspot.com/2010/04/chart-can-be-optical-illusion.html
I feel like you're looking for the holy grail setup and making things more complicated than they really are, IMHO.
Couldn't agree more. I just deleted everything off my charts. :)
Maybe this time around I can keep it that way?
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