bwilhite,
Exactly right. That's why I pointed out that you have to be fully willing to risk that loss gap and use up some capital until it finally breaks out. Not to mention, you're essentially shooting for small profits. I don't currently practice this strategy, but I may put it into demo once the market opens next week just to see how it tests out. I'll try various adjustments as well. I believe the outcomes will be decided by the widths and noise of the sideways markets.
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Originally Posted by bwilhite
Bob,
I've done some similar thinking and research along the same lines. It seemed to me, however, that the odds of the size of the loss getting out of control were too large (in worst case scenario basically, we're locking in a loss everytime we cross the range). I would like to know if you've found a way around this problem? Or maybe I misunderstood your original post?
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