dknight
8 posts
msg #38543
- Ignore dknight |
10/22/2005 3:10:12 PM
I’ve had great success with this filter and trading method since I started using it. It’s a modified Muddy so credit goes to Wallman and I’m “paying it forward” so to speak for what it’s worth. I could never get the hang of the true Muddy, especially “waiting for green” which drove me crazy and cost me more money than I care to think about.
I’ve been trading with this system for about 100 trading days in both the Canadian and U.S. markets. The basis for the model came from hours and hours of fiddling around with filter variations, but maybe I’m just slow to catch on. When I eventually stumbled across the nucleus of something that looked promising I created a database of inputs and the results over the following 10 trading days (that’s the maximum hold) going back over a 300-day trading period. I then did statistical analysis which showed some of the best patterns. Add the 100 odd trading days since I started using the system and the database now covers a period of more than 400 trading days.
Since I started trading with the system I’ve made 41 U.S. trades; 40 are closed and one is open. My “success” rate (1%+ gain) is 66% and my average per trade performance is +21.5%. Per trade performance in the Canadian market is better, but the number of matches is way, way smaller. The number of trades may seem small but patterns only have a chance of working when you play every trade that meets the match so it was a case of balancing the amount of capital I had, the average investment per trade that I wanted to make and the maximum number of open trades that I might have to cover. As my capital continues to grow I’m going to have to expand the number of trades I make because I think spreading the risk is a good strategy and I don’t want to increase my per trade investment much above what it is now. Based on the data I have...and it’s only historical data...my average per trade performance is going to take a hit as the number of trades increases, but the indicators are showing something around +10% and only time will tell.
I have not included the exact price criteria I use as: a) I think you should do some of your own research and due diligence; and b) I don’t know that I want you playing right in my sandbox. I have the flexibility that most days I can monitor activity during the day and I have made several exits on gut feel alone before I was stopped out. So, I don’t know how this system may work for someone who can’t watch the market during trading hours.
Also, I am not very interested in discussing the merits of the system, good or bad. To each their own and you can make your own decision about its worth...it’s working for me and that’s all I really care about.
As TheRumpledOne is known to say by times: “I wish you success with your filters and trades. MAY ALL YOUR FILLS BE COMPLETE.”
/*Modified Muddy*/
set{10ds,10 day slope of the close}
set{x,count(volume above volume 1 day ago,1)*2}
set{y,count(volume above average volume(90),3)}
set{z,x+y}
z is above 1.1
rsi(2) below 5
close below open
close 1 day ago below open 1 day ago
close 2 days ago below open 2 days ago
10 day slope of the close below -.18
low below lower bollinger band(20)
close /*research your price points*/
volume above 75000
average volume(15) 2 days ago above 75000
not otcbb
add column 10ds
sort column 5 ascending
/*END*/
Entry...
On the following day, buy the #1 ranked stock (lowest 10ds) near the end of the trading day if the price change is 0% to +10%.
Hold...
Maximum hold is 10 trading days. My average to date is six.
Stops...
Initial 10% stop loss. Stop tightens as gains are made but you have to leave enough wiggle room so you don’t get stopped out too early. When any gains reach 8% I lock-in a 5% gain. Anything over 10% I’ll usually set the stop 5% below.
Exit...
a) 10 days;
b) when you’re stopped out;
c) when it just feels right to cut your loss and reinvest;
d) when it just feels right to take whatever profit there is off the table.
At this point in time I always close out a trade that gains 15% to 20% in one day.
|