I've spent the past several weeks searching and researching a couple of new trading strategies which use the True Strength Index (TSI) indicator. I have finally settled on one strategy, with a few tweaks left to figure out, and have another strategy still being worked out.
This first chart is of Brigus Gold Corp (BRD) which I bought yesterday for $1.60 using my new strategy.
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Click on any chart to ENLARGE
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Today I was able to sell this position in BRD for $1.64, which was above the targeted 2% minimum gain of my strategy.
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Each day for the past week I have 'paper traded' my new TSI strategy and tabulated the results in a spreadsheet. The objective I have assigned myself is to define a mechanical trading system that can deliver a gain of 2% each day with a minimal draw down and a fast turn over of my trading capital. To date I have recorded 76 trades with 60 of them achieving a positive return in excess of 2% - a 78.9% success rate. As there are still a couple of days left before existing trades expire (I am arbitrarily giving them 3 days to work), it is possible the success rate will be a tad above 80%. Also, in 76 trades I have only had a single trade exceed my arbitrary 5% draw down cutoff level.
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Soon - perhaps by next week - I hope to be ready to begin posting the trades on my blog the evening before their initial trading day.
Today I sold my position in Denison Mines (DNN) for $4.05, locking in a tidy 22.4% gain.
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My TSI Trading record has been updated.
The SP-500 was overcome with irrational exuberance today and so I sold another futures contract when the index read about 1301.
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I previously sold one of these contracts when the SP-500 was around 1282 and was patient to watch it rise against me, then take a hugely favorable drop a couple days ago - at which time I then bought the contract back for a modest $500 gain.
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In my opinion, today's SP-500 is probably the last hurrah for the index. As you can see from the chart, it is now on its 5th negative divergence and it will take a miracle to keep it from an ugly fall, if not a down right crash.
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John,
ReplyDeleteNice moves using your new stategy. I've been watching DNN for some weeks now. It's one of my favorites. I think It's going to $5.00. Also want to tell you I did make some money with the DXD and after today's action, I'm tempted to try it again. Do you see the divergence in the INDU using the TSI? I do. But this market doesn't seem to want to quit. As you just stated the SP500 looks like it should be coming down. If that happens, won't it take the silver down with it??
Since you share your latest stock purchases with us, here' a couple I just bought. PLG 2.20 and PIT.V (CHXMF) .44
Hi John, I really love your site and trading ideas. I am thinking of getting into some short positions for the overall market. Do you have a favorite EFT or stock for that matter you use when you are expecting a drop? Thanks, G.
ReplyDeleteHi Monty - yes, INDU shows similar setup of negative divergences as SPX. You would probably do a little better than I if you were to wait until the daily TSI (7,4) is falling down through ZERO. As for silver, I would consider that in 2001 the SPX was 1500 and silver $4. Silver is in a huge secular bull market, the stock market is in a huge secular bear market. So not surprisingly, they may appear from time to time to move in sync, but in reality they do not.
ReplyDeleteHi Anon - oh, I have used TZA to attempt to short the market. A little less risky symbol is SDS and less risky yet is DOG. In sequential order, these tickers are leveraged 3X, 2X and 1X.