I am intrigued by your long and short selections. Out of your long GNSS, ALKS, GRP were in down trend. Hovering close to their 200 EMA. While some of your shorts look like just minor corrections in strong sector stocks. Some of them might be consolidating for move up and have not broken EMA support in many cases. GRP for example was in a sector which had several stocks breaking down. The oil and gas equipment sector was in downtrend since June While some of your short picks are in data storage sector where several stocks are making new highs.
I have a corporate account with Ameritrade and do not use their data. Their commission structure for what I do is best for me, although, the fact that their MM's won't reflect my shorts at the offer bugs me. Great journal greenleaf.
Hi easyguru. Thanks for posting here and taking the time to look at the charts. I would agree with you that I would not want to be in most of these for more than a short time. I am just looking to get 70 or 80 cents or maybe $1 out of my picks right now. $200-$300 a trade. These charts didn't give me any indication they couldn't fall by that amount. In fact, in my eyes, the odds were good that they could fall by that amount in the next day or two. Right now, I do not want to risk the drawdown associated with trades longer than 1-3 days. That is why I have made picks the way I have. I probably should've been more clear about this before. I hope this answers your question, and by all means, if you still think I am off base after reading this post, I welcome your comments. This is exactly one of the reasons I wanted a journal. To hear what other traders think.
Obviously you have a method which is working for you, so you may not want to change it. But here are some of my observations after watching your picks for sometime. Your volume criteria takes out some of the likely major movers. For your account size and holding period if you pick stock with lesser volume it might give you better results. I don't know what is your criteria of defining strong uptrend because some of your picks were below 50 day and near 200 day EMA and below sometime. You may not be noticing it but there are other system traders who are looking at those stocks as short candidates due to those criteria. Probably a relative strength to S&P or NDX filter would give you much better universe to trade with. I personally prefer a three year range filter. ( i.e. stocks trading in top 20 % of their three year range. ) For pullback trading the stronger the trend of the stock you have a high probability on your side. Some of your picks have significant chart pattern damage e.g. MVL and AMLN in the sense they had failed breakout or high volume gap downs which makes them low probability play till some time passes by and the chart gets repaired. I have one major observation on your basis hypothesis which is ADR. The best trending stocks have an extremely narrow trading ranges. This is their stealth rally phase. When they experience range expansion there is an euphoric phase which many times leads to reversal. The best part of a trend is made up of series of low ADR days. Look at the charts of KMX, SOHU, ADVP, HILL, TSCO, CVH, CMX, RCII, ADS, NFI, NCEN, MME, MVL, ACMR . That part may be the best part to trade as it reduces drawdown and reversal risk. Many of them do not get affected by market ups and down also during this phase. The pullback in this phase do not violate trend lines. Your system probably catches them for trading once they get in to euphoria phase (for example MVL or AMLN, LEND).
Hi AAA, Thanks for posting. I got sick of having to predict the market a day in advance because of having to keep positions open for at least one overnight. Although the advice posted by easyguru is outstanding and would probably give me better odds of success, I've been working hard learning to trade e-minis. Watching the market, reading all of the index futures threads on ET, going back and reading some of my books over again, and developing some strategies with which to move forward. I've reworked my software to support YM, ES, and NQ, and will begin trading one contract trades on Monday. I haven't decided yet whether to keep the journal going while I make this transition. -- DG
This is a pretty big switch. I urge you to papertrade for a week or so first and to backtest your strategy if at all possible. I would focus on the ES only, and I would make sure you understand all the CME rules regarding trading halts and when contracts roll.
trade YM, you can put up all 30 of underlying stocks and keep an eye on them when you duke it out with the mini.