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I wonder if anyone has any thoughts on the following system.
Assuming one has the necessary capitalization and patience, would it work?
Rules
1. Go long only.
2. Buy the front month Naz emini at 1800, 1700, 1600, 1500, 1400, etc. all
the way down or all the way
up!
3. Sell each contract only when it reaches a 100 point profit.
4. Rollover if necessary.
This is a strategy widely known as "scale trading".
It takes a lot of capital to make it work. You also need to use "last in -
first out" accounting.
The hidden danger is a prolonged down market where you wind up holding a huge
position of big losers and run out of capital. It also violates the common
axiom of "cut your losses and let your profits run". This strategy holds
losers forever and always takes small profits.
It might work in particular circumstances but be careful about using this
strategy on a regular basis.
Chuck LeBeau
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