Friday, June 15, 2007

Beat up

I've been trading a swing system that I developed, with very little success over the last month. They system has low draw downs and very good returns, however I am skeptical of how I am trading it over the last couple weeks.

So I suspect the problems to be among the following:
1) I am picking the stocks that I trade based on a list of alerts. I pick the stocks that have had the best performance in the system. This may not be leaving me with as many opportunities (that produce the excellent returns). I also limit the stock universe to those stocks that are trending up and just a little down for the week.

2) With the more volatile markets in equities over the last couple weeks, I've been stopped out early of a couple trades that did eventually turn well.

3) In a bullish market, the only oversolds after a good day (one of my indicators) are not the best stocks, so I when I submit limit orders, I don't get the best stocks and industries.

4) I some how missed the bottom of the market. I knew we were headed for another down day, but that didn't mean I shouldn't be in buy mode. I got stopped out of several orders, but I could have been in to several more and actually profited, if I hadn't been as passive during the down periods.

5) Lastly, and I'm still guilty of this, I can't hold stocks past the period that I've specified by the system, or when the indicators say sell. This has less to larger losses than I should have taken. I've reset these trades too many times.

On the bright side, I am currently in PRU and DIA, and both are close to there sell points. Other trades are doing well outside of this system (wish I had made a larger position in AMX which is up 20% in the last 3 months). I'm gonna stick with the system a little time more and see how it goes. I have lots of trading ideas but I haven't had time lately to code them up. I'd like to try some strategies that go long and short at the same time, and see how that does.

It's disappointing not having profited more from the bull market, but I'm still in that learning phase, and I have really limited my risk, so my +/- is still very reasonable. Hopefully if the market continues to be choppy I can profit on the next coming swing. I see the dow, spy and qqq continuing making highs, but in the same choppy fashion that we've seen in the last week. That's my intuition at least....

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