Thursday, November 18, 2010

Working in a coal mine

 Five o'clock in the mornin'
I'm all ready up and gone
Lord I am so tired
How long can this go on?
Here is a 12 month track record of the SPY Daily Trend Model.  The table that follows contains entries (closing price of SPY day of signal) as well as "Best level" which marks the best price level achieved for each individual trend. 

SPY Daily Trend Model


Past performance is not a guarantee of future results

There are many observations contained in these results.  Striking is how successful the signals have been "intra-signal," that is, before slippage steals points leading into the next signal......But there's an App for that, especially for those trading highly leveraged options seeking to turn quick profits rather then waiting for reversing signals.   

Consider also the effect of a 2X or 3X leveraged ETF applied to the net return compilations. 

Maybe most important of all, no one signal had make or break power over the 12 months of results.  Of the seven closed signals, three, almost half,  were net losers. 

This blog is for perspective, it is for discipline, it is for perseverance, its for going to work each day with a game plan, with strategies and with realistic, yet achievable,  expectations.

A
Workin' in a coal mine
Goin' down down down
Workin' in a coal mine
Whop! about to slip down

13 comments:

Alan said...

What I notice is that every signal has been successful. All long signals have lead to higher highs; all short signals have lead to lower lows. All early bounces following each signal have been reversed. So if the pattern continues, and it does not have to, the 1173 lows should be taken out before the next long signal. As for the draw downs leading into the next signal, maybe other technical patterns have to be considered in taking partial profits, or maybe leveraged instruments should be played short term following any early bounces. It would be interesting to see how these net results changed when also trading the hourly and 240 minute signals alongside the dailies.

Anonymous said...

I'm surprised no one has seen and commented on this yet. Based on those numbers and 3-month ATM calls/puts, you would have seen a 100% gain at some point after each signal. Forget trends, just take the 100% trade and stand aside and wait for the next one. Beats the 16% annual return, even if doubled or tripled with a leverage ETF. Looks like a fine little system you've got there.

skyprince said...

I'm convinced. It is obvious that even at a measly 50% win rate, given the gains are so much larger than the losses, the system produces very commendable net profits. One thing I note is that if you use Ultra (2X or 3X) ETF's, you must use them in both directions.

Anonymous said...

Does anyone have any - as Alan suggests - "other technical patterns" they have found successful for taking partial profit?

Also, counting this AM, NNVC has been up 5 days in a row. Very tempted to take the 69% gain...

Anonymous said...

Checking in from New Orleans

Re: "Other technical patterns"

Took a long trade on TBT on 10/14/10 at 33.38... the pivot date given by Allan. As the price escalated in price by 15% by 11/15/10, entered a sell order with a 4% trailing stop. Stopped out on the 16th with a 10% return in one month.

Don't get greedy. 10% is a great return. Just another tweek.

Anonymous said...

Sir,

Is the trend model service beneficial for traders that have a portfolio of $10,000.00 only, or is it geared for big time traders?


Thanks

Allan said...

Yes!!!

Anonymous said...

side note / off topic

i'm following about 34 mining stocks in my portfolio.

today saw most of them idling neutral

only the silver majors
are doing well today.

slw
svm
paas

and a few silver juniors

misvf
frmsf

gold miners neutral today

...........................

on topic

Allan's service is great.

just dont freak out during the assorted short term whipsaws when they happen

Anonymous said...

Allan, for a subscriber with a 10K portfolio, it will take a 12% return just to pay for the subscription ...

Anonymous said...

Howdy Allan

Is the system only relevant for those that can short and work with live markets?

I'm currently based outside the US and the stock accounts/trading service I use don't appear to allow me to go short - suppose I could use an inverse ETF for some of the ETF Plays but that's about it.

Also, due to time zones, it's generally later at night when the markets in the US open. Will your service be of value for someone who can only place trades at the start of the day and won't be able to actively trade the live market?


Thanks
D

Allan said...

D,

Take a look at those signals again. Only you can decide i something like that will work for you.

A

Anonymous said...

{Allan, for a subscriber with a 10K portfolio, it will take a 12% return just to pay for the subscription ...}

So says a poster above..

But if Allan trends are available to a small portfolio,Re: stocks that return good value and are not blue chip stocks that cost over $50.00 a share, then the returns would generate higher profit and at the end of a year, 12% would not be bad at all.

Guess it is in the way one looks at the whole picture.

Is the glass half full or half empty!

Anonymous said...

As sad as it may be

This

Canary in a coal mine

will only enhance system returns.

Lucky