For this week’s stupid trader trick, I’ll make a sign error, causing me to completely misinterpret my research by 180 degrees, buy when I should sell, and vice-versa. Yay!
Yeah, so that’s what I’ve been doing for the past two weeks actually. The research I described in this post does NOT indicate that fading end-of-week strength is the way to go. Upon reviewing the research after a second straight weekly loss of 1%, I found that I had introduced a negative sign into one of my MS Excel formulas for no apparent reason. This caused me to get the interpretation backwards.
Mea culpa, mea culpa!
So, in fact, the research actually supports trading in the direction of end-of-week momentum, specifically when certain bar patterns are present. While this doesn’t correspond to the overall “reversion to the mean” tendency that I’ve seen in other research, it does correspond to the conclusions in the Tick Density research report, which also looks only at a week to week time frame.
I’ve corrected this now, and this week’s pending trades are all pointing in the right direction. As of the time of this post, none of my three pending trades have filled, however. So we’ll see how this week goes.
So don’t trade backwards like me, and you’re sure to…keep pipping up!
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