Windows of opportunity
by Douglas Arend
Entering a commodities position typically is a two-step process. First, a decision must be made on the
expected direction of the market. This is the set-up. Next, some method for timing the entry is required.
I'll refer to this as the signal. Certain indicators and techniques are inherently better suited for the set-up,
while others tend to perform well as signals. The key is to separate these functions and select methods
which have proven themselves over time.
My approach is to identify an expected direction in the market lasting from several days to a period of
weeks. Then, having done this, I look for entry signals consistent with this expectation. The time
intervals during which both conditions are satisfied may be anywhere from several minutes to several
hours and I refer to them as windows.
The easiest way to separate functions is by the length of time they cover. I construct my set-up to cover
several weeks and even months, while my entry signals are generated by day trading techniques. This
combination gives consistent results.