Step 5... Not Quite There Yet

Step 5 for developing a system is "Determine the best historical moves in that time frame and notice what those moves have in common." Tharp suggests having at least 50 to 100 sample market moves to examine, including both up and down moves. This is a very simple, but time consuming step. I have almost 10 years worth of daily data for the EUR/USD, AUD/USD, and GBP/USD pairs, so I'm certain I have the necessary volume. What I don't have is the time, or more honestly, the patience to inspect the charts to spot the big moves.

While I think the best way to do this step is to visually inspect the charts, I'm going to create a calculation of moves based on 1, 5, 10, and 20 day price changes. My hope is that this will help me find the big moves and some of the action before and after it.

Until next time....