Feeback for my very simply trading strategy

Discussion in 'Professional Trading' started by AndrewL, Jan 3, 2009.

  1. AndrewL


    My strategy doesn't get any more basic. I've been a full time investor for a couple years and as such have been following the markets a few hours a day from open to close. I noticed I should be able to take advantage of the market's momentum but haven't day traded until lately.

    My theory is that individual stocks and the market in general usually swing to one direction of the other on a daily basis instead of rotating around an unchanged point. I simply go long during the first hour when the SPY is up around 1% from the open and short if it's down around 1%. Sometimes I'll move earlier depending on the chart. If the market reverses through the open price I take my loss. It's been workinig but due to the market's recent volitality I'm not sure if it would be as effective of a strategy in a less volatile market. Still when the market is making a new high or low every 30 minutes throughout the day it seems liek a no brainer.

    Momentum can be even more profitable in an induvidual stock. Emcore opened on New Years Eve up 15%. Steadily it rallied throughout the day and closed up 60%. This seems to happen far more often than a stock opening up 15% and closing down 30%.

    I imagine that this concept of buying breakouts and selling breakdowns is the very basis of trading, but all of the terms and indicators used turn me off. I prefer to just stare at my charts for a few hours and come up with some patterns.
  2. This is easy to backtest. Let us know what you learn.
  3. AndrewL


    I use power etradepro which is decent software but doesn't offer backtesting. IF someone could backtest for me over various time periods it would be greatly appreciated. Is there any software that offers backtesting for under $100/month?