Sunday, December 05, 2004

Weekend Update

In a call-out for trading ideas last week, I received an email from Tony in regard to the following idea: buying NYSE stocks after 4 consecutive down days. Tony states that he's looked at various trading systems and has not found any that work well against the NYSE stock universe.

I agree with him 100%. I have developed over 45 trading systems and only two can trade NYSE stocks successfully. There's just something funky about NYSE stocks. The only tip I've found for trading NYSE stocks is to limit your trading to the NYSE optionable stocks only.

Now, back to Tony's idea of buying after 4 consecutive down days.

I coded the idea first against the QQQQ. There was a surprising amount of trades for this idea with nothing to write home about. So, I filtered the results down to only buying on a drop of over a certain percentage from 5 days ago. I applied various percentages and none really seemed to improve the results. A trend filter did not help either.

Just for kicks, I ran a rough test against NYSE optionable stocks. Results were no better than random entry. Overall, the first wave of testing was frustrating. Does not mean there is not something there. Just means have to dig a little deeper.

My next step is to test volume patterns and possible extending the number of days down. Other ideas could be to test whether it's a brand new 50 day low or if the down days started from a 50 day high. I'll keep you posted on the progress.

Until then...

Daily System Updates
No open trades at this time.

Weekly System Updates
Long system trigger for VNWK at Monday's market open. The system that generated this trade is the same system that generated SPDE and AATK trades the previous weeks. So, as you know, system caters to penny-type stocks with high volatility. Holding periods are mid-term in length. This system is one of my riskiest systems. I trade very little size with trades from this system because losses can be you can see by the current losses in the SPDE and AATK trades.

Also, as I'm sure you know, the QQQ symbol has changed to QQQQ. This symbol change is a result of the ETF now trading on the Nasdaq versus the Amex.

I currently have a weekly long system open on the QQQQ (results below). But, this weekend received a new long system trigger for the QQQQ from a different weekly system. This weekly system is based partly on the original Turtle Trading system. TraderMike has a post containing links to the system. Read TraderMike's post here.

Current open system positions:
  • 1 QQQQ long with current profit of 5.74%;
  • SPDE long with current loss of -9.23%;
  • AATK long with current loss of -13.10%.
Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

1 comment:

muckdog said...

Well, I've tried that system at the roulette wheel sometimes. If black comes up 4 times in a row, bet red. Kind of a slow game, though. And it doesn't work any better than just picking red on the first spin. But, as long as their serving drinks, maybe one can last awhile... Do any of the eBrokers include free drinks per number of trades?