The Patient Trader's journal

Going to start up this journal again now that I have some time to focus on trading.

First trade was entered in DIA following last weeks sell off. Last weeks price action set up a nice sell off following a 12-month high the previous month. The signal was generated last Friday at 158.48. After some testing I discovered a stop/limit combination that yielded an 83.33 percent win rate. Granted, the stop order is twice the size of the limit order but this mix yielded a good result (Average 3.47% return per trade). The sample set is not huge at 18 (not counting the current open trade) but it should do. The thesis behind the pattern is that price does not typically go straight down following a 12-Month high as the "I missed the rally" crowd should step into buy the dip. I am currently taking some heat on the trade but that is expected

Pattern definition and results are below.
http://www.fasterbull.com/share/52e9cc908c39c.html

Let's see how this plays out.

Trade - DIA
Entry - 158.48
Stop - 149.68
Limit - 162.88
 

Attachments

  • DIACorrectionTrade.png
    DIACorrectionTrade.png
    314.8 KB · Views: 100
Taking some heat on this trade! Feeling like Peyton Manning did going into half time at last nights Super Bowl. Hopefully this trade's second half will fare better than Manning's did :)

fan27
 
Still long DIA.

Some information regarding my approach. I am currently experimenting with a web based tool that allows me to see technical conditions true for a particular point in time. My previous approaches to system development/signal generation were to develop a system and wait for signals occur. This new approach is to review charts each night and if anything looks visually interesting, see which conditions are true for that point in time and see if any combinations of the conditions can be built into a profitable strategy.

The upside to this approach is I might find patterns that would be missed had I built the systems up front. The downside is it is more labor intensive at this point as I need to monitor review the charts each day. The product is currently in beta so hopefully there will be some improvements that can help with that.

fan27
 
DIA trade exited on Friday via a Limit order per the trade plan.

Entry - 158.48
Exit - 162.88

Gain - 2.8%
YTD - 2.8%
 
Looks like my mad market timing skills are getting ready to pay off. :)

Let's see if the market can build on today's late day momentum.

fan27
 
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