First of all, thank you pointing me in a direction that is looking very positive for my trading. Bumping into this thread has had a large impact on my trading methods.
In addition, if you do not mind, I felt I would mention a few variations I am playing with. This is not to create a better system than the one you are using or to say there is anything wrong with the current program you are following. I am just looking for slightly different results to fit my style and goals and offer this as food for thought.
I do not hold over night and I was trying to minimize some of the whipping. I trade off a much shorter chart period, some might even say I am using your system to scalp but that is not my intent.
I have added a third simple MA. In your 60min. time frame it would be a 40 period MA. I then only take the standard buy signals when above this or passing through it and only sells below it. So when a standard sell signal is generated above the line, I exit or go flat etc.
To cut down on the whips, I have added MACD signals and only take a signal if confirmed by the MACD and only buy if MACD if above the zero line, etc. This has cut down a great deal on the whips without eliminating any good moves.
Since I am flat at the end of the day, the MACD also gives me a re-entry signal the next day. If the standard buy signal is long at the end of the day and still long the next morning then I will buy when the MACD gives it's first buy signal and follow the system from there as normal.
For me this seems to generate pretty consistent signals over a wide variety of conditions and with very small losses. Risk/reward seems to fit well with my style. Since the signals appear at this time to be consistent, my goal is to find 3 or 4 stocks which fit the program well and just trade those few stocks.
The consistency and risk/reward aspects of the system are my main goal. For me, profit is more a function of money management than size of stock movement. Compounding from even very small profits, if consistent and low risk, become huge in a very short time. To me the secret is to find a consistent system you feel comfortable committing to.
This variation is giving me about a 50/50 profit to loss ratio but the losses are usually in the 1/4 to 3/8 size with the very rare 1 to 1 1/4 point loss. Many of the profits are also in the 1/4 to 1/2 size but with a good sprinkling of 2,3 and even 7 point gains. Keep in mind I am generating signals from a much shorter chart so on a 60 min chart all these would be equally larger.
So again, thanks to you and the others on the thread.
boots |
