25 lines
936 B
Markdown
25 lines
936 B
Markdown
# Higher Highs and Lower Lows
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The idea for these strategies comes from chapter 3 of [*How Markets Really Work*](https://moshferatu.dev/moshferatu/how-markets-really-work) (2012) by Larry Connors.
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As with most of the strategies from this book, they are meant to illustrate certain characteristics of the market rather than be traded directly.
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## Rules
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**Higher Highs**
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1. Enter a long trade when the market (e.g., SPX or SPY) makes a higher high for 3 consecutive days.
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2. Exit the trade after one week.
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**Lower Lows**
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1. Enter a long trade when the market (e.g., SPX or SPY) makes a lower low for 3 consecutive days.
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2. Exit the trade after one week.
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## Parameters
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**Consecutive Higher Highs / Lower Lows**: How many higher highs / lower lows must have occurred in a row to enter a trade. (Default: 3)
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**Long-Term Trend Period**: The period of the long-term trend as measured using a simple moving average. (Default: 200)
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