Traders' Roundtable

Someone would like to share some idea on how to track total heat in systems like "Average Crossover" if you dont want to hold/use stops?

thank you

If you are using an average crossover system you could compute the price tomorrow that would give a reversal signal. This price could then be used to calculate risk.

The much harder question is how to do this for an ADX crossover system without stops. You would need to project tomorrow's Open, High, Low, and Close, since the two ADX lines that cross over (DMI+ and DMI-) require all four prices in their calculation.

And the VERY much harder question is how to define the word "risk". Do you want to include (possible severe price gaps) in your definition of risk? Although infrequent, they do occur. How about limit-locked days?