Despite my success daytrading over the past couple of years, using an arsenal of highly effective trade triggers, I have been looking for something new, something that will work as effectively in down markets as my other stuff works in up or sideways markets. I may have hit the jackpot.
My new "beta system" uses a proprietary equation that determines buy and sell levels based on the previous day's range and closing prices. There are numerous "pivot point" systems out there, but this one is the only one that has ever intrigued me enough to carry it into "beta" mode. What beta means to me is that the underlying technique has passed all my backtesting criteria and has reached the real time, real money, test mode. This is the final stage before becoming an official module for my daytrading system. I have to make money with it, consistently, before it becomes an offical daytrade system trigger.
So I thought it might be of interest to chronicle it's progress here on my blog. I'm monitoring about 20 stocks and being very selective so far in where and when I throw real money into the ring. In any event, all trades are recorded into a spreadsheet, whether I take them or not. Once this technique graduates, if it does, to an offical part of my trading system, all trades are taken, no questions asked.
One of today's trades, taken real time, real money, was TZOO. The trigger was a move above $31.80. I bought TZOO at $31.84 and exited with a decent profit at $32.20. TZOO then ran up to $34.14.
I guess you can say, "So far, so good." Or on the other hand, ask, "What were you thinking, Allan, taking the trade off with a paltry 1% profit?"
That's why we beta, something new.