Camarilla Equation

[S49erman]

I was looking around the internet and came accross this concept. I know there are some smart people on here and figured that at least one of you has heard about this or knows how good it is... seems pretty interesting.... anybody know anything?

[wallstreet]

Here is the skinny on your question.

I did a google search and it pointed me to many sites, this one seems to explain it quite nicely!

http://www.camarillaequation.com/

Looks like a mathmatical trend trading system to me, not too complicated if you have the correct numbers and follow the system correctly.

One thing it might not cover is a strongly negative or strongly positive market, or a choppy trendless market.

So, lets say that in the example from that site, you were to go short when the higher L3 level was hit and reversed, then you went long when the lower L3 level was hit and bounced.. well what if the lower L3 level was hit and bounced, then went down again? Like the market for the past 3-4 weeks where head fakes occur, then go lower..you would be whipsawed to death.

I think this theory has legs, but like the article points out, tons of people do this already, so you are just one of many..so if I were to do this I would try and beat the throngs to the door and take gains quicker, or enter a bit after the majority did.

In my view, there are no silver bullets but plenty of good aides to assist your trading..but over 50% of trading gains and losses are made because of the market moving, rather than the stock itself. So observing a trend, and entering a trade in percentages (money managment) will get you far in the market.

Thanks for the theory, I enjoyed reading about it! It looks to me that this equation is more for the SPX and indexes versus individual stocks though.

[S49erman]

thanks for your insight wallstreet, I think I might give it a try. I think you have a good idea about taking the profits before everyone else does, it should be very interesting to watch. Thanks!

-Scott