I just discovered and read through this interesting journal today, and I simply had to determine the profitability of Rennick's ball calls. Since I only have access to 20-day long intraday charts, the stats I compiled are only for the predictions made from August29th to Sept 26, regarding a total of 20 afternoon calls.
Although the inital afternoon forecasts are said to occur at about 1:05 pm, the time I was concerned with, was the moment William's post appeared on ET(as everyone knows each post has a time-stamp included with each post)--between 1:20 and 2:00pm.--
In otherwords, I've ignored the outcome of any trades based on primary source timed-trading and instead focused on the outcome of real time trades made shortly after Mr. Rennick's calls appeared to the ET public.
FLAT:
6 of the 20 DOW calls made were for afternoon flatness:
-with all six flat calls, the DOW stayed within a range of 40pts from the approximate moment of the posting.
-with five out of the six calls, the DOW closed at less then 25 pts away from the approx. moment of the main posting.
-However, for futures traders and others who don't view a 40 point DOW move to be considered "flatness": 3 of the 6 times the market did afterwards, in fact, move pretty damn close to 40 points in one direction or the other.
Regardless, the 'flat" calls emanating from the crystal ball are not intended to make money, but rather I guess to save one money.
DIRECTIONAL CALLS:
--in those 20 trading days, 14 calls were made for willing DOW traders to either go "long" or "short." If your investments followed and were made shortly after the postings appeared on ET, you would have closed out 8 winning trades,
and 6 losing trades (57% winning trades).
-- one of the losing trades failure, was afterwards atributed to an "event": "the 2 pm release of the Fed's Beige Book."
Overall you would have made money, the rest of the statistics will show how many DOW points you would have accumulated and lost over the 20 trading days, also the average winning trades should have made more points then you should have lost on the average losing ones.
HERE's a look at approximately how many points you would have lost and gained, depending on your exit strategy:
LOSING TRADES:
--- if you exited ALL directional trades at the *end of day*, you would have lost approximately a combined total of 130 DOW points from all the 6 losing trades (with a 21.6 average points lost per losing trade). BUT You would have also had deeper unrealized
losses before reaching the EOD, due to some late 10 to 30 point reversals.
--- if you exited all losing trades at a 22 point STOP-OUT drawdown below entry level, ELSE: exiting EOD when STOP not triggered, you would have lost about a total of 122 points from all the 6 losing trades.
---if you exited all losing trades at a 30 point drawdown below entry level, ELSE: exiting EOD when STOP not triggered, you would have lost about 140 points from the 6 losing trades.
---if you exited all losing trades at a 40 point drawdown below entry level, ELSE: exiting EOD when STOP not triggered, you would have lost about 140 points from the 6 losing trades.
WINNING TRADES:
--- if you exited ALL directional trades at the *end of day*, the 8 winning trades would have made you about a combined total of 220 DOW points (with 27.5 average points gained per winning trade)
--- if you exited all winning trades when the DOW gained 50 points in desired/profit-making direction, ELSE: exiting EOD whenever 50 point profit increase is NOT reached, you would have gained about a total of 230 points from the combined 8 winning trades.
--- if you exited all trades when the DOW gained 40 points in desired/profit-making direction, ELSE: exiting EOD whenever 40 point profit increase is NOT reached, you would have gained about a total of 220 points from the combined 8 winning trades.
--- if you exited all trades when the DOW gained 30 points in desired/profit-making direction, ELSE: exiting EOD whenever 30 point profit increase is NOT reached, you would have gained about a total of 160 points from the combined 8 winning trades.
--- if you exited all trades when the DOW gained 20 points in desired/profit-making direction, ELSE: exiting EOD whenever 30 point profit increase is NOT reached, you would have gained about a total of 154 points from the combined 8 winning trades.
Hope this analysis helps anyone who is contemplating investing in the predictions provided from a seemingly successful crystal ball utilizing prognosticator. I imagine some people will interpret the statistics here as inefficient evidence of any profitable edge (57% winning rate, not improved enough from a 50/50 chance bet? OR thought the after-call win:loss ratio would have came out significantly better based on what I read? Being misled?). While some others will see success in the calls (more wins then losses! bet prompt 1:05 market forecasts produce even far more impresive stats! Can't a winning strategy have more lossing trades then gainers and still be profitable? the winning trades noteworthingly produce bigger profit-points in your pocket then the losing trades suck out !)
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P.S: Here are the dates of the successful directional calls, failed directional calls, and flat calls --- (A = August, S = September)
(8 profit making calls): A29, s7, s8, s12, s15, s18, s21, s25
(6 unprofitable calls) : s1, s5, s6, s11, s14, s19
(6 calls for market flatness) : A30, A31, s13, s20, s22, s26
