Fibo of the X axis is another aspect that I find interesting. After a trending move say a triangle formation that took 20 days to form, the stock seems to make its next move to the 127.1 and 161.8 within that same timeframe, in the example 20 days.

52-Wk High List: For this list I record all the 52-wk high’s at the close of the trading session and after a few days I go back to the list and look for any that have formed my entry setup. Pretty simple, Great Trends, Strong fundamentally, and by limiting stocks less than 15 dollars, I have been quite successful with finding winners.

You can do the same with the 52-Wk Low’s and Shorts.

Strong Volume Gainers: For this, I pull up lists of the strong volume gainers and look for a hammer candlestick with a tail which undercuts the most recent low or a low within the past 30 days. This allows for defined exit and in combination with my entry rules a very high probability trade.

I experimented with Stocks that undercut the lower Bollinger Bands, buying over the high of the low day, however very few are in uptrend’s and I do not have enough statistical data for those that are in uptrend’s and fall down to their lower BB to make any conclusions or theories.

Any comments input or strategies are much appreciated. Thanks everyone!

I am interested to find watch lists developed using 200D-ma crossing a 50D-ma or 10D-ma crossing a 20D.-ma. As I am primarily a swing trader my timeframe is anywhere from 2 days to roughly 2wks.

1)      Is this the best way to develop a strategy? I want to build a simple system. I want it to build the trigger that gets me in at the best time. My first thought is to find two triggers that either say to be in the market long, short, or flat. Then by combining the two I will come up with far fewer trades that have a higher success rate. It is my idea to test a couple of basic strategies this way and see if they improve. For the sake of argument let’s assume that I can identify 6 zones for trading with each basic idea I am testing with. For example, I might decide that the stochastics are to be used and tested for the 6 conditions of rising or falling above or below 0 or being in the oversold and overbought zone. That is each wave would have two rising pieces, a peak area, two falling parts and a trough. ***If*** I found the best time to buy was in the rising between oversold and 0 section do you think that could be assumed to be the best one to combine with another method such as using MACD somehow or might another section when combined be the best bet. That is overall the best method might be to buy when coming out of oversold, but when combined with MACD in some way the best method might be to buy while in the oversold zone before the breakout. Obviously there will be exceptions, but would the best way to trade a signal on its own be also the best one to add to another signal or might there be some goofiness of combining them that makes a completely new test required, that is must I test all 30 different ways to find the best or is it almost always going to just be the combination of the best two when tested individually. The reason I ask is that it would be much easier to test everything individually and then combine them, but it might not work very well if it doesn't give the most likely best solution.

2)      Or, is the best way? Use a single simple method and then try and determine if the market conditions are right. It is easy to look back on a chart and say it was rising during this time, so the buy-a-trend strategy will work best. And here it is range bound so the rubber band trade system that rides extremes back to the center are going to work best. But if a decent system is developed for those given conditions, ideally one that breaks even in other conditions, then the step two of determining what condition is prevalent is the key. According to a book I read by Tharp, something with Financial Freedom in the title, he says that there are 6 conditions, trending up, trending down, and range bound, both volatile and non-volatile. It is easy enough to mark off these zones in the past, but how do you tell what day a new one starts. I can historically find a time, a long period of time, of any of these conditions, but measuring them in the moment is like adding a new indicator that is sometimes wrong and makes the system take the wrong type of trades when it is faked out. Another way this type of system is often defined is to trade your system but only take trades in the direction of the long term trend. The idea being that by looking at a long term chart it is easy to tell which way to go. I would suggest trying to put it in an algorithm isn't so easy.

I would love to get your thoughts on which system building idea is the best approach.

     "Could I manage a 100, 200 or 500K dollar account?"

After asking myself these questions I reanalyzed my trading strategy (which is swing trading) and have equations based on my risk tolerance and account value which producing the # of shares to purchase. Now any number can be placed into the account value box and I do nothing different in my physical trading. Thanks for your comments!!

I'm always looking to trade spreadsheets and equations to developing new idea's so let me know.

tim

New York Giants:

1987 -- Open: 1,897.36, Close: 1938.83 -- Yearly Pct. Change: +2.1 percent
1991 -- Open: 2,633.66, Close: 3,168.83 -- Yearly Pct. Change: +20.3 percent

 

Avg. Pct. Change in Dow when Giants win Super Bowl: +11.2 percent

 

New England Patriots:

2002 -- Open: 10,021.71, Close: 8,341.63 -- Year Pct. Change: -16.8 percent
2004 -- Open: 10,452.74, Close: 10,783.01 -- Year Pct. Change: +3.16 percent
2005 -- Open: 10,783.75, Close: 10,717.50 -- Year Pct. Change: -.6 percent

 

Avg. Pct. Change in Dow when Patriots win Super Bowl: -4.81 percent