Trend 18 - Follow-Up Report - Test 3

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

Trend 18 - Results:

Hello once more! We are getting closer and closer to finding a trend that makes money. So far we have tested this trend and found it has made money over two periods of time, both of which were in downward trends and from January to March. But now we have to look to see if it makes money over a longer term.

Test 3 - Longer Time Frame

Due to the fact that on both occaisions the lower the stop the better the results, I have taken the stop level to be 1%. (The other reason for this, is because any kind of analysis takes a lot of time to process through my computer!)
Results taken January 2009 - December 2009

This trend is looking very good. Not only has it made money in the two periods previously tested, it has proved it is sustainable throughout a longer period! There are some who would say that 2009 across the boards was a year of growth following the huge collapse of the major stock markets, but even then we can see here that we would have had a return of 137% which is by far above the growth of 22% for the FTSE and 19% for the Dow Jones.

Now I can forsee only one difficulty. Keeping track and selecting the right shares. Obviously it is virtually impossible to trade all of the average 19 shares per day, and the number of shares that are below that follow the trend of Up and Up then do not give the trigger Down will be greater. So with a win average of only 38% it means we could be picking the losers 62% of the time. Difficult.

So I bet you can guess what the next test is going to be?

Next Test: Choosing Random Shares

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

(If you want to understand this blog and get the most out of the information here, click on the Introduction link, or to get quick access to different topic use the Contents link.)

Trend 18 - Follow-Up Report - Test 2

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

Trend 18 - Results:

Hello again! Now so far the tests have given us some positive results. We have managed to ascertain that the trend of Up over 7 days, Up over 2 days and then Down on the day of trade, will give us enough good returns to enable us to make a profit. At least we have proved this within the period January 2010 to March 2010. But does it work in a different time frame? Well, let's take a look:

Test 2 - Different Time Frames

Results taken January 2009 - March 2009

Fantastic and interesting results! We have made profit again on six out of the ten trialswith the highest profit being that of the one with the lowest stop in place. Again.

Luckily for this one there is no need to begin looking for exceptions. The maximum/minimum results show that the highs and lows are within suitable parameters so we have a strong possibility that this is going to turn out to be a winner again.

The most interesting part is that we are seing these winnings despite the fact that we have very low winning %. This means that we are actually losing more often than we are winning. However, it also means that our average winnings are much higher than our average losses, thereby giving us the wins we have seen.

So, thus far we have seen that our results have been positive over two differnt time frames. However, both of those timeframe have been from January to arch. This could just be a seasonal trend (which is still not a bad discovery and warrants extra research if it is proven to be a bad trend at the end of the next two tests), and so we must push forward and discover the truth.

Next Test: Longer Time Frame

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

(If you want to understand this blog and get the most out of the information here, click on the Introduction link, or to get quick access to different topic use the Contents link.)

Trend 18 - Follow-Up Report - Test 1

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

Trend 18 - Results:

OK! So in our last test we discovered what looks to be a decent trend. As I said though we are going to have to put this through a very tough investigation. For those that have been reading this blog, you will remember that we thought we havd discovered a trend with Trend 6 because all the indicators were good but the follow-up report really dismissed this idea very quickly.

This one looks more solid, but I am not going to lay down one pound against it until I know we have found a winner! So shall we start:

Test 1 - Exceptions

Looking at the results I can straight away see something that stands out. There is a very large Max running from the 2% line downwards. This looks as though it has had some impact. However, I am not convinced that this is the only reason we have made money here because 1% has still made 41% even without the exception. So what was it?

Well it turns out that it was Brit Insurance Holdings PLC (BRE.L) with a 1 for 4 share consolidation, as well as good news from their annual report. So we have an exception, but what impact does it have on the reports? The answer is % row - None at all, the rest are all shifted down by about 25%.

So even with this exception we still have good trends! (After a thorough check this was the only exception.)

This trend is flying through at the minute! How long will it last?

Check back with me tomorrow and I will see what impact we have had with a different time frame!

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

(If you want to understand this blog and get the most out of the information here, click on the Introduction link, or to get quick access to different topic use the Contents link.)

Trend 18 - No Limits, With Stops - Up, Up, Down

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

Rules:

Data set taken from 01/01/10 to 31/03/10

Trading Type: Stocks
Start Time: 08:00
Finish Time: 16:00
Stop Loss: None
Limit: x% on High
Long/Short Trading: Long
Buy Rule:
-7 Day Close < -2 Day Close

-2 Day Close < -1 Day Close

-1 Day Close > 0 Day Open

Sell Rule:

If Day 0 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else

If Day 1 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else
If Day 2 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else
If Day 3 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else
If Day 4 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else
Day 4 Close take Profits/Loss

Results:

Report:

Well, it was a toss up between reaching further into the depths of previous trend and finding out whether it was good, or wether it was just because of the time frame/ shares choice/ exceptions and so forth, or writing this message. As you can imagine, I get to see these results before I make my choice. and I really didn't have to take too long making it. WOW! and I mean WOW!

Let's look at the first results for this trend with no stops:

Now look at the results above. If ever there was proof that stops work on a longer term this is it. I have alread made my decision as to tomorrow's post. We are going to look deeper into this trend:

- Test 1: Review results for exceptions
- Test 2: Review results with different time frame
- Test 3: Review results over longer time frame
- Test 4: Review results with random selection of shares

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

(If you want to understand this blog and get the most out of the information here, click on the Introduction link, or to get quick access to different topic use the Contents link.)

Trend 17 - No Limits, With Stops - Up, Up, Up

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

Rules:

Data set taken from 01/01/10 to 31/03/10

Trading Type: Stocks
Start Time: 08:00
Finish Time: 16:00
Stop Loss: None
Limit: x% on High
Long/Short Trading: Long
Buy Rule:
-7 Day Close < -2 Day Close

-2 Day Close < -1 Day Close

-1 Day Close < 0 Day Open

Sell Rule:

If Day 0 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else

If Day 1 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else
If Day 2 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else
If Day 3 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else
If Day 4 Loss at Low < x% then take Loss at x%; else If Day 0 Close > x% then take profits; else
Day 4 Close take Profits/Loss

Results:

Report:

OK! Here we have it. We have come across an interstng set of results here 6 out of the 10 trials returned a profit, 1 broke even and 3 had losses of 2% or less. Let's look at the trial run here to determine if this has been a success or not. For those that didn't here is a short review:

All returns for this first set of results hovered around -33%, so to end up with the profits we have seen here is great. But does it work as a system? We are going to ahve to check this one out in more depth, because a quarterly profit of 10% is nothing to be sniffed at, especially with compounded growth!

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

(If you want to understand this blog and get the most out of the information here, click on the Introduction link, or to get quick access to different topic use the Contents link.)

Trends - No Limits, With Stops

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

The idea of this trend is to prevent our losses going below a certain amount. This would mean that we are looking to increase the odds of getting a heft reward, by redcuing the amount we can lose. An example of this would be:

We buy two 10 of shares in two companies each valuing at £10.00 per share (Share A and Share B),and we set a stop in place at 5%. That day we see mixed results. For some reason Share A shoots down 50% whilst share be actually goes up 10%.

Ordinarily we would have made a loss that day as it would have looked somethng like this:

                     Start             Return            End
Share A        £100              -50%            £50
Share B        £100                10%           £110
Total            £200               -20%           £160

Obviously, it is good that the winnings of Share B have helped to offset some of the losses of Share A, but we cannot allow for that every day. With a Stop in place the results would look something like this:

                     Start             Return            End
Share A        £100              -5%               £95
Share B        £100                10%           £110
Total            £200                2.5%           £205

I know which one of those I would rather have! I am holding out a lot of hope for these results, because as with the last group the saying is ride your winnins and cut your losses. This trend is the very empitomy of that phrase. But we will never know until we get started!

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

Trend 16 - With Limits, No Stops - Down, Down, Down

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

Rules:

Data set taken from 01/01/10 to 31/03/10

Trading Type: Stocks
Start Time: 08:00
Finish Time: 16:00
Stop Loss: None
Limit: x% on High
Long/Short Trading: Long
Buy Rule:
-7 Day Close > -2 Day Close

-2 Day Close > -1 Day Close

-1 Day Close > 0 Day Open

Sell Rule:

If Day 0 Profits at High > x% then take Profits at x%; else

If Day 1 Profits at High > x% then take Profits at x%; else

If Day 2 Profits at High > x% then take Profits at x%; else

If Day 3 Profits at High > x% then take Profits at x%; else
If Day 4 Profits at High > x% then take Profits at x%; else

Day 4 Close take Profits/Loss

Results:

Report:

And here we have it. The last of a very bad set of results. I am really glad I didn't go out and spend my hard earned cash following any of the trends in this set. I thnk I might have been a little upset and I probably would have earned more down at the casino!

Another successfully found way to not make money trading! Now let's see the difference when we apply stops instead of limits.

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

(If you want to understand this blog and get the most out of the information here, click on the Introduction link, or to get quick access to different topic use the Contents link.)

Trend 15 - With Limits, No Stops - Down, Down, Up

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

Rules:

Data set taken from 01/01/10 to 31/03/10

Trading Type: Stocks
Start Time: 08:00
Finish Time: 16:00
Stop Loss: None
Limit: x% on High
Long/Short Trading: Long
Buy Rule:
-7 Day Close > -2 Day Close

-2 Day Close > -1 Day Close

-1 Day Close < 0 Day Open

Sell Rule:

If Day 0 Profits at High > x% then take Profits at x%; else

If Day 1 Profits at High > x% then take Profits at x%; else

If Day 2 Profits at High > x% then take Profits at x%; else

If Day 3 Profits at High > x% then take Profits at x%; else
If Day 4 Profits at High > x% then take Profits at x%; else

Day 4 Close take Profits/Loss

Results:

Report:

Before I report, I must firstly apologise to my readers for the severe delay in this report! But it looks like it was definitely NOT worth waiting for. This one really takes the biscuit. For the first attempt we could only really do worse if we happened to lose all out money! We may as well have taken a punt on Nortel!!

Oh, Well. Another successfully found way to not make money trading!

Introduction - Contents - Next - Previous - (Start of Section - Next Section - Previous Section)

(If you want to understand this blog and get the most out of the information here, click on the Introduction link, or to get quick access to different topic use the Contents link.)