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"Do The Right Thing" For Trade Breakouts


I do not know exactly where comes this article, I found this article on investopedia but maybe it is not the source.

Anyway I have an opinion about stuff like this. Everybody who gets on the forums will find a myriad of threads and systems like this. People attach indicators like this, glare at the charts and try to make it. If it works it is great if it does not you switch on the next system having the momentum hype.

Then some guys try to code it and this eventually becomes an algorythmic trading. 

The point here is the human observation, finding a rule or a set of rules using the intuition alone. 

And if the guy who does it is experienced we may come up with a winning system for a while.

For example during the downtrend on the Euro the simplest thing to do was to sell the highs.

I remeber we talked with Jaguar that our systems did not work properly, then I called my mentor asking what he was doing. He answered that he just was selling the highs and some of the guys he was teaching were making a good profit (In fact he never gets money for the instruction, he is giving advices, but that is what makes him a genuine mentor).

So here the key is to know who gave this system and when it was given. 

I know that competent coders are listening to this kind of talks, in order to design based on them the EA that would perform in those market conditions.