I observe these results of a trading simulation using 13.97 years of Standard And Poors 500 index tracking stock (symbol SPY) historic daily price data. This mechanical trading system buys at the following opening when SPY stock closing price becomes greater than the 300 trading day exponential moving average value and sells when closing price becomes less than the 300 trading day exponential moving average value. Trading is long positions only. Position size equals (3 % of account equity) / (10 times the 20 day average true range). Greatest drawdown (losing streak) is only about 1 % and the first few dollar position costs are only about half the initial capital so it might be possible to increase position size. Increasing position size might increase overall profit but might also increase volatity (draw down). === Number of trades 15 Total profit $ 115142 Profit after subtracting $ 10.00 commission, slippage per transaction: $ 114842 Heat is 3.00 per cent of equity. Greatest drawdown is 0.0092 (0.92 per cent). Cumulative Annual Growth Rate (CAGR) is 8.22 per cent. CAGR / Drawdown is 8.93 Instantaneously Compounding Annual Growth Rate (ICAGR) is 5.47 per cent. Annually Compounding Annual Growth Rate (ACAGR) is 5.63 per cent. Information Ratio is 0.45 Initial capital is $ 100000
Individual securities sometimes show long continuing trends. I attach a trading simulation using Merrill Lynch stock symbol MER. This mechanical trading system buys at the following opening when MER stock closing price becomes greater than the 300 trading day exponential moving average value and sells when closing price becomes less than the 300 trading day exponential moving average value. Trading is long positions only. Position size equals (10 % of account equity) / (10 times the 20 day average true range). Simulation is conducted with 29.89 years of data and shows how profit can add up over a long period of time. === Number of trades 78 Total profit $ 2905565 Profit after subtracting $ 10.00 commission, slippage per transaction: $ 2904005 Heat is 10.00 per cent of equity. Greatest drawdown is 0.1397 (13.97 per cent). Cumulative Annual Growth Rate (CAGR) is 97.16 per cent. CAGR / Drawdown is 6.96 Instantaneously Compounding Annual Growth Rate (ICAGR) is 11.38 per cent. Annually Compounding Annual Growth Rate (ACAGR) is 12.06 per cent. Information Ratio is 0.20 Initial capital is $ 100000 Growth rate is about 97 % / year and greatest losing streak about 14 %.
well pal if you do a little research her at ET and all over the net you'll find plenty of stuff about price action. second I completely disagree about price action impossible to read. You need to think before you post here my friend 'cause this "nobody really understands what price action is or how to accurately read it" is probably one of the newbiest comment I ever heard on this forum. I am not attacking you by any means, just as I said think before you post. I've been gentle with you. Some other folks here will insult you for that comment, especially here that is a no-man's land and some posters are trying to show who has the biggest balls. I assure you, I am not in that kind of game, but of course if anybody goes out of line with me, I get back real hard, it's my nature. Again, no offense intended
=============== Another thing about moving averages thats helpful; price is down from opening gap, and flat much today, but even a 50 period ma on 60 minute candle charts, shows a nice , even though extended uptrend last 2 days ======================================== In other words lots of time today QQQQ,ES,SPY shows flat price; but a 50 period ma shows a much clearer uptrend last 2 days , than price alone does More help to a position trader, candle chart daytrader; than scalper for sure.