The S&P Model is long as of the close on May 14th. This model will sell the long and get short at the close tomorrow June 1st if the VIX stays above 28.85.
The NASDAQ model is short as of the close on May 20th. No open orders.
The VIX Model is short as of the close on May 26th. This model will cover the short and get long the VIX at the close tomorrow June 1st if the VIX stays above 28.85 or if the VIX closes above 28.92 or if the VIX closes above the VIX open.
Ripe Trades
At left you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Monday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (AKAM,AMAT,AMGN,AMZN,BIDU,BIIB,
CSCO,CTSH,EBAY,ERTS,EXPD,FISV,GENZ,GILD,GRMN,ILMN,INTC,JAVA,LRCX,ORCL,
ORLY,PAYX,PCAR,PPDI,RIMM,RYAAY,URBN,VRSN,VRTX,XRAY,YHOO) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.
4 comments:
What do you think about trading system degradation? - You must have seen a lot of systems over a long period of time in very different market phases.
Do all system fail eventually? For good or just temporary? How sure are you about the excellent systems / set up on this website? Will they ever fail?
A hypothesis could be made that the edges a trading system exploits will eventually be traded by everyone and thereby destroying the edge. On the other hand, we know that simple MA trend=following and momentum based systems work basically all the time since these ideas were first published in the 1930s.
It would be very interesting to see your POV on this.
Thanks, Joe
I like to trade the equity curve of the system. Only take trades when the equity curve has a positive slope. If the system begins to fail and the slope of the curve is going down don’t trade the system. An easy way to do this is overlay a moving average on the equity curve.
Are you going to tell us when one of the systems published here has falling equity curve?
Thanks, Joe
I will stop publishing the signals if a system circuit breaker hits.
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