Highs and Lows

Albert Einstien said " Make everything as simple as possible. But not simpler."

So with that said, I wanted to get you guys opinion on a strategy I've been thinking about.

At the beginning of every big move there is a major high or a major low. Everyone of these major highs or lows started out as a minor high or low. So which minor highs and lows will turn out to be major higs or lows?

I've decided to take the guess work out of it and trade every high or low that occurs on the chart. Using a 500 tick chart. So for example, once the first high or low of the day occurI would enter a trade. If a high or low occurs the other way I would simply reverse my position. I notice that in the ES if i trade this way I will eventually catch a few good moves and hopefully they will offset the one's that didn't turn into anything.

What do you guys think? I believe if I automate this system so that I can be in the market the entire day that I could possibly turn a profit every day. I use no indicators.

So what do you guys think? Is this something that has potential? Is there anyone that can back test somehow?

Rookie

On a trending day when are you determining that the (potential) high or low has been made and is now changing direction?

Hey myptofvu. Well I consider a HIGH a bar that has a lower high and a lower low comming before and after it. I consider a LOW a bar that has a higher high and a higher low comming before and after it. Inside days don't count. So that's the thing. Regardless of where the market is or what's the trend, if any of the above occur I will enter or reverse a position. A position can't turn around without making a HIGH or LOW. So some might ride the trend if it occur but me I'll take advantage of those pullbacks as well.

Rookie

Hey Rookie, How's this strategy going? So that I understand correctly; if the market makes a new high with a lower high bar on either side you short below that next bar? What time frame? Thanks for sharing your strategy.

Hi Rookie,

My charting doesn't offer 500 tick bars. Do you know what time frame that usually equals? (I guessing it is about a one minute bar to 30 sec).

Hi Rookie,

I love the idea of making things as simple as possible, however
I am not so keen on this trading idea, particularly for stock index or day trading.

This type of strategy is the kind of thing that seems reasonable but if implemented will be kind of like throwing money in a furnace. I say this not to criticize just as a hopeful warning about what does not work. Best of luck in your strategy development.