The additional feature in HGBnD arises from the idea I had when GJ did its leaky toilet act after BOE cut the UK interest rates a couple of weeks ago. This was the picture-perfect leaky toilet. The market would fall, triggering sell stops. It would fill in the gaps with buy stops, then retrace just far enough to close a couple of sells and fill the pending buy stops. I cannot remember what the imbalance was, but probably about 20+ buys against 5 or so sells.
My idea to deal with this was:
- Wait for the next retrace.
- Hope that retrace was sufficient to generate and HGI H4 sell signal.
- Take a hedging sell so the I had an equal buy lots and sell lots open. Remove DB from the chart and manage the position manually.
- Hope the market fell and await an HGI H4 buy signal, then:
- Close the hedging sell and grab the profit.
- Close whatever number of worst performing buys can be closed at <= the sell hedge profit.
The leaky toilet reversed, so I reloaded DB and she started offsetting buys. Eventually I found myself with 5 open buys and 23 open sells, one of which is the 0.25 lots hedge. I took the first RAD buy signal and opened a full buy hedge to equalise the lots over buys and sells.
The leaky toilet has continued. Currently the sells are at -$3386 and the buys at just shy of +$1,600, leaving the difference between them of c.-$1790. The rise has filled four more buy stops and so the position is unbalanced again, but the DD drops slightly with every upward push.
The first HGI H4 sell/range signal I see will prompt me to close the large buy trade and as many of the biggest losing sells as possible. I will restart DB and let her continue with her offsetting. I can probably rinse and repeat this for some time until it becomes possible to close the entire position.
Edit 1st November 2016:
The strategy was a triumph. The market did the Plunge and the Plummet dance and several more sell stop stops filled. The yellow dashed line marks the candle during which I closed everything down: You can see that I did not wait for a new HGI signal. The profit from the GJ positions was over $1,200 so I decided not to be greedy. I used some of the profit to close down all my other trades so I could knock off for the week and enjoy a rare, flat weekend. I emerged from the whole business just shy of +$870.
