I have not, but I will. I'm not sure exactly what you would like for me to provide so let me start with this. Every few days I back test my list to see if my conclusions are still holding up. Over the last 69 occurrences of this pattern, going back into last week, of course, 51 have resulted in at least a retest of the session's high and 18 would have resulted in a stop out for a loss. If I remove those that occurred when price was below the open, I would remove 14 occurrences, of which 11 were losers and only 3 managed to see price rise to the minimum target, which again, is a re-test of the high. This leaves means almost 87% (48/55) managed to reach a minimum profit objective. This is a stronger than the average of the last six months, which has been pegged +/- around the 80% level, but then again, these last 69 occurrences have happened during a strong 4 day rally. The rally from the morning pullback has a strong tendency to see the stock make new session highs. The rally from mid-session and afternoon pullbacks has a strong tendency to double top or trend sideways once back to session highs, and there is a 40% failure rate, i.e. approximately 40% of the time the afternoon rally makes a lower high from which either a reversal or a sideways consolidation occurs. For this reason, my plan calls for a more aggressive trailing stop on afternoon trades than those taken in the morning. I will stop there and see what you have to say, as I am not certain I am providing you with that which you were asking.
Well, you say that you "believe that this plan will give me all I want and more if I just trade it as I have written it", but there must be some basis for that belief or you'll never trust the plan, and if you don't trust it, you won't follow it. What timeframe did you cover in your backtest? (At least a year) Did you do it manually? What was your winrate? What was your profit:loss ratio? What was the longest string of consecutive losses? What was the maximum recoil after your entry? IOW, did price move cleanly away from your entry, or did it come back? If the latter, how far? If the latter, how often did this occur? And so on.
That's it. I do trust it - I did the backtest manually over 13 months of data, and on all the parameters you ask about it tested out very strong, with the numbers being very similar to what I have seen you achieve in your "Straight Line Method" threads. So why I was unable to trust it yesterday was and remains a mystery to me. I did much better today, though a technical glitch prevented it from being as routine as I would have hoped. I lost electricity, internet, and my land line late this morning, leaving me with only my cell phone with which to access my account and manage trades. It quickly became apparent that Scottrade's mobile app was a nightmare, and I just closed my one open position out where it was at the time. I did not get my services restored until after the close, so my trading day was effectively foreshortened to the first two hours. Trade 1 UGAZ: The first trade I put on was UGAZ. This was a proper instance of the DBP, I entered the order, was filled, set the stop loss, and within minutes the stop loss was triggered for a loss. Grade 3 Points - .26 Trade 2 ALXN: Soon after the UGAZ entry, a DBP higher low set up formed on ALXN. I entered this order and the entry buy stop was triggered and filled. This is about the time things became interesting. No sooner had I been stopped in to this position and stopped out of Trade 1 UGAZ I saw that UGAZ was setting up a second DBP entry. As I was entering a buy stop to take this second trade on UGAZ there was a loud explosion outside and I lost internet, electric, phone. From what the linemen told me later, a squirrel lost a whole lot more than that as it made a bad connection with a transformer (I find it hard to believe a rodent could cause that much damage and disruption, but that was their story). I was not able to enter the UGAZ order, and I was long ALXN but with no way to monitor it. My computer is on battery back up, as is my modem and router, but this explosion took out the power and the cable company's "box" as well. So, I grabbed my smart phone and logged in to Scottrade. It did not take me long to realize that it is the most counter intuitive trading software "platform" ever devised by human beings. I think I accidentally exited the program about five times before I figured out how to avoid doing that. I then found that the "streaming quotes" were off. I figured out how to turn them on, and then I went to another screen, and the streaming quotes were again off and I was getting delayed data, again. I was simply flying blind at this point, so after some additional fumbling, I found my way to the order screen, and after still more of me jumping through several hoops where I was forced to cancel my stop loss before I could enter a new order to take me out of the trade at the market, I exited the ALXN position. So ended my trading day. Here is the ALXN chart: The exit was not "per plan," as it was really a forced exit due to technical issues on my end. However, now that have experienced this, my trading plan has been revised to call for an immediate exit of all open positions and cancellation of any remaining open orders should I lose connectivity to my broker. I give myself a 2 on this trade - 1 point for correctly identifying the opportunity and executing my entry order, 1 point for predefining my loss point and setting the stop loss order. However, as this was not a per plan exit and as I did not have this situation covered in my plan, I give myself a 0 for properly managing the trade to let my profits run. For the day, I finish with a grade of 5/6 B- and 1.28 points. For the week I have cumulative 15/21 D, and 2.93 points. Here is a table of today's trades.
Foozler, I am really admiring your dedication and discipline. Two questions, first, do you have a set list of stocks you always watch, or do you scan for this particular DBP pattern. Second, have you looked at trading the mirror position, the double top pullback, DTP, on down days? Thx.
Keep it simple, get quiet, try and go back to yesterday in your mind, what were your feelings: anxious, nervous, excited, pressured Yesterday what conversation was going on in your mind? Either way great start, keep moving forward.
I'm a little fuzzy on the details. You say you came up with a list of thirty-five stocks and ETFs and I assume this list resulted from your backtesting. Did you also forward-test this same list? If so, how did your results compare with the results of your backtest?
Yes, I have stable list of stocks, which I will speak to more directly in an upcoming post. If by "scan," you mean do I have an automated system to signal this patter, I do not. I find the pattern by clicking through my chart list every few minutes. I use a double top as one of my exit strategies, but I am not short-selling at this time.
Yes, the list is a result of my backtesting. I found that stocks exhibiting certain characteristics, including relatively high price per share, volume (minimum 300K per day with preference to 1 million shares per day), average true range greater than two dollars (with a strong preference to those trading in excess of 1 million shares/day or more make the best candidates in terms of frequency and success of the opportunities presented, as well as favorable bid/ask spreads (though this is not always the case). For stocks, an issue must be trading at $100/share minimum to make the list. If it drops below $85, I remove it until it is again trading above $100. For leveraged ETF's, $25 is the minimum to make the list, and if an ETF drops below $20, I do not trade it again until it is above $25. By forward testing, I presume you are referring to paper-trading and/or sim trading. I paper-traded the set-up several months, and I sim traded it during the immediately preceding three weeks. The results of the forward test were comparable to those of the back test.
So you did forwardtest using the list that you came up with as a result of your backtesting? As for forwardtesting, no, that's not the same as paper-trading. There are three phases here after the initial exploration and deciding what you want to test: the backtesting, which is done in hindsight and is designed to provide you with at least one hypothesis to test, the forwardtesting, during which you test the hypothesis via replay without knowing the outcome in advance, and, if the results match the backtested results closely enough, the paper-trading or sim-trading in real time, though it can be a delayed feed since you're not trading with real money. If you are then consistently profitable throughout, you can begin trading with real money. If everything then falls apart, you most likely have issues that have little to do with your trading plan and must be addressed through some means other than just hammering away at an activity that isn't providing you with a successful outcome.