No More, No Less

Several questions I’ve received recently relate to my use of three- and
13-minute charts combined with five- and 15-period MAs to detect trends. For
example, several have asked whether using five- and 15-minute charts or three-
and 13-period MAs would work as well. As I mentioned in my very early columns,
there is certainly no magic to the numbers themselves, and one can use a number
of combinations and methods to detect trends. Yet, I purposely don’t use the
same time frame interval (3 & 13) as MA period length (5 & 15) in my
column and personal trading to simply lessen confusion when I’m narrating to
charts of multiple time periods. We’re basically after trend detection…no
more, no less.

Yet, I do believe a larger issue is often at play when I see questions relating
to the preciseness of any method. I’ll go to my grave (hopefully a long, long
ways away) believing that 90% of trading is between the ears and that any method
is meant simply to skew probability slightly in a trader’s favor if used
consistently with effective trade management and sufficient trade sample size.
If I had the choice of giving my capital to a trader with 30% trade success and
strong mental and trading discipline vs. one who was 80% successful with a
lesser mindset, I’d easily choose the first every time.

Thanks again for the continuing feedback and putting up with my often-corny
analogies. As I’ve said before, none of my insight is meant to be a startling
revelation by any means, yet I hope reinforcing what may be obvious for some
using a slightly different twist (or is it twisted humor?) is helpful for all,
and hopefully a bit entertaining as well. Life is too short to do otherwise.

Don Miller