I read this in some website about Tony Crabel's breakout trading strategy:
I have prepared an excel (link for the excel: http://www.4shared.com/folder/vPBzc9nm/_online.html) based on my understanding and did backtesting for some stocks (only for the months may and june as I don't have intraday info prior to this period) and it seems to work. I want to know if anybody is using this technique as I have some queries. Would u be kind enough to go through the excel and see if my method is right? My queries are:
1. Should the absolute value of the average be taken or can it also be negative?
2. What should be stop loss and targets?
This information is only available in Tony Crabel's, "Day Trading With Short Term Price
Patterns and Opening Range Breakout". This is a mathematical formula used to play the
opening range breakout. If you are unfamiliar with this method it may sound complicated
but bear with me.
First Step: you get the (High - Open) and the (Open - Low)
For example: Let's take the S&P 500 emini contract
High: 1294
Low: 1281.5
Open: 1290.50
(High - Open) = 3.5
(Open - Low) = 9
2nd Step: You take the minimum of the two numbers. In this example the minimum would be
3.5.
3rd Step: Add the minimum for the last 10 trading days and divide it by 10. So you would
add 3.5 to the minimum of the previous 9 days. In total you will have 10 numbers. Divide
that by 10 to get the average.
4th Step: For example, let's say you get a 10 day average of 2.5. You simply play the
breakout of the opening range. If prices open up at 1293, you would buy a breakout above
1295.5 and short a breakdown below 1290.50.
Patterns and Opening Range Breakout". This is a mathematical formula used to play the
opening range breakout. If you are unfamiliar with this method it may sound complicated
but bear with me.
First Step: you get the (High - Open) and the (Open - Low)
For example: Let's take the S&P 500 emini contract
High: 1294
Low: 1281.5
Open: 1290.50
(High - Open) = 3.5
(Open - Low) = 9
2nd Step: You take the minimum of the two numbers. In this example the minimum would be
3.5.
3rd Step: Add the minimum for the last 10 trading days and divide it by 10. So you would
add 3.5 to the minimum of the previous 9 days. In total you will have 10 numbers. Divide
that by 10 to get the average.
4th Step: For example, let's say you get a 10 day average of 2.5. You simply play the
breakout of the opening range. If prices open up at 1293, you would buy a breakout above
1295.5 and short a breakdown below 1290.50.
1. Should the absolute value of the average be taken or can it also be negative?
2. What should be stop loss and targets?
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