My simple, yet profitable trading strategy

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I have thought about that Dustin but many times stocks such as KCI turn around and turn profitable or at least come back quite a bit.

Here is another example:

Take a look at VOL on Jan 9th.

Was in at 50.93..it tanked down to 49.71 midday. Any reasonable stop would have been hit.

VOL finished the day at 54.40.

That equates to a $4690 swing between the price I'd have sold at with a stop vs. keeping till the end of the day.

It is very very easy to play monday morning quarterback with stock picks.

I don't think putting stop losses on the 6 stocks I pick each day is going to improve my results. Even the overall stop loss is questionable.

peace.
 
Let me suggest how you might be able to get rid of some of your losers and manage your trades better with just some simple ta.

Here is a chart of CR. I am guessing you took the trade at 10am, like always. You instantly had a good trade going but it didn't last long. The chart shows you how I would have played it and hopefully it will give you some ideas on how to improve your strategy.
 

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Here is a chart of KCI. A quick look at the chart at around 10am you would notice that this might not be the best buy.

It fails to make a new high and then proceeds to take out the daily low. No good.
 

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I remember that VOL trade, but is the occasional big winner really worth all the losers that you can stop out of? It seems that your biggest problem is being stopped out at $1800 all the time...by cutting losses quicker you may give up some occasional large wins, but your P&L would be much smoother. Just a thought.
 
Dustin. Great posts. If you dont mind Im wondering how you screen for your stocks. Are you just looking at % gainers and % losers? I saw on a old thread you use trade ideas. Just wondering if you could shed a little light on this? Thx alot. Jim
 
Quote from traderich:

One thing that I cannot get a handle on is this:

Take a look at the charts for CR and KCI today.

This is why I have a hard time trying to sift through the list and pick which will be the good ones and which will be the duds.

CR was looking great at first then fizzled and is killing my portfolio right now.

KCI looked like a sure fire dud for the day. Was going down and down and DOWN. I'd have thought for sure that it would never come back and would drag down the results for the day, but then for god only knows reason, it is going gang busters now!

Until I can find a reasonably accurate tool that will tell me which ones to keep and which to dump, I guess I am going to stick to just buy and hold with the 6.

peace.
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Hi there,

A couple of thoughts.

(1) Backtest the entry method for every half an hour from 9.30 to
2.00. That is, any difference in results between entering at 9.30, 10.00, 10.30, 11.00, 11.30, 12.00, 12.30, 1.00, 1.30 or 2.00? You may have the best entry time, but you don't know until you do more research. It is my inclination that you may get a better R:R by entering during the deadzone, and if gains still hold by then the probability of them been good trades may be higher. The downside is you may lose some upside on individual trades. Of course, then you would probably adjust the exit method to 3.55pm and not the $3000 as you are reducing your time in the trade.

(2) Is there a fundamental screen you can apply. Like only taking trades moving on positive news. Just a thought to test and see if that would improve the results.

I think this is a pretty good way to trade. Let me know how you get on.

Cheers.
 
I have no way of back testing it, it's really something you would have to try for a week and see. This is the way I trade my very similar system. I'm willing to give up some big winners for steady gains...and it works. Just depends what you want from the market.
 
Quote from jim c:

Dustin. Great posts. If you dont mind Im wondering how you screen for your stocks. Are you just looking at % gainers and % losers? I saw on a old thread you use trade ideas. Just wondering if you could shed a little light on this? Thx alot. Jim
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First at 10am I look over the Yahoo to % winners and losers. I pick my favorites and put them in charts. Then I also have TI alerts set up to tell me when these things are moving, just as an additional alert in case I need to move stops or add to positions.

NTRI is a good example of why you should consider shorts in this system. I got in about an hour ago in the flatline area...tight stop, good risk reward. Also, there is no fundamental reason to just trade NY stocks.
 
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