I've worked on the first 5 of 10 ticker symbols in my 4 week long daily 'real-time' study using the True Strength Index (TSI) indicator along with a self-customized 200 ema indicator.
This study concluded yesterday at the open of trade - Friday June 21, 2013.
I will show you the trading skills I personally can improve on using charts detailing my real-time trades (that included the self-imposed handicap of only trading on the open each morning) and reveal my retrospectively observed errors in judgement. It is my hope that those of you who invest the time to carefully consider the thoughts offered on each chart will benefit from sharpening your thinking process and trading skills, as has been the favorable outcome for me.
The first 5 of 10 ticker symbols I attempted to trade in real-time using imaginary money and the handicap of calling the trades based on the end of day analysis for entry/exit at the following morning's open included:
1. Boeing (BA)
2. Crude Oil ETN (OIL)
3. US Dollar Index ETF (UUP)
4. S&P 500 ETF (SPY)
5. Gold bullion ETF (GLD)
The link provided for each of the above ticker symbols will take you to a page that shows you (for each symbol individually) what I was looking at each day in 'real-time', what my thoughts and concerns were each day and what my trading decision was for that ticker symbol on the open of trade the following morning.
Before we look at the charts, here is an overview of how well I did (and did NOT do) in 'real-time'. The column titled 'Real-Time' shows the outcome of the trades I made. The column 'Possible' details the ideal trade outcome with the benefit of hindsight - as you will be shown with explanation in the charts that follow.
Company,
ETF or ETN
|
Ticker
|
Real-Time
|
Possible
|
|
1.
|
Boeing
|
BA
|
-0.80%
|
-2.47%
|
2.
|
Crude Oil ETN
|
OIL
|
+0.57%
|
+6.18%
|
3.
|
US Dollar Index ETF
|
UUP
|
+0.62%
|
+2.22%
|
4.
|
S&P 500 ETF
|
SPY
|
+0.50%
|
+3.48%
|
5.
|
Gold ETF
|
GLD
|
-1.78%
|
+6.11%
|
Subtotal
(1-5)
|
-0.89%
|
+15.11%
|
||
6.
|
Gold Miners ETF
|
GDX
|
+3.33%
|
|
7.
|
Goldman Sachs
|
GS
|
+2.82%
|
|
8.
|
Home Depot
|
HD
|
0.00
|
|
9.
|
Microsoft
|
MSFT
|
+3.52%
|
|
10.
|
Long Term Treasury
|
TLO
|
0.00
|
|
Subtotal
(6-10)
|
+9.67%
|
|||
Grand
Total
|
+8.78%
|
Here are the first 5 ticker symbols traded in 'real-time' followed by their optimal version:
1. Boeing (BA) My trades:
1. Boeing (BA) Optimal:
2. Crude Oil ETN (OIL) My trades:
3. US Dollar Index ETF (UUP) My trades:
3. US Dollar Index ETF (UUP) Optimal:
4. S&P 500 ETF (SPY) My trades:
4. S&P 500 ETF (SPY) Optimal:
5. Gold ETF (GLD) My trades:
5. Gold ETF (GLD) Optimal:
1. Boeing (BA) My trades:
1. Boeing (BA) Optimal:
2. Crude Oil ETN (OIL) My trades:
2. Crude Oil ETN (OIL) Optimal:
3. US Dollar Index ETF (UUP) My trades:
3. US Dollar Index ETF (UUP) Optimal:
4. S&P 500 ETF (SPY) My trades:
4. S&P 500 ETF (SPY) Optimal:
5. Gold ETF (GLD) My trades:
5. Gold ETF (GLD) Optimal:
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I followed your trade sequence on the Dollar Index. Just curious why you place trendlines on indicators but not on price? Would have kept you in the trade. Do you feel you should trade momentum before price? I use a similar setup to your 200 ema but with several periods Cheers..
ReplyDeleteNurseZero - I appreciate it when people, such as yourself, take the time to give my work a look and then offer a comment or idea or question. So, thank you.
ReplyDeletePerhaps you were thinking of another trade and not the one involving the US Dollar? I freely admitted I exited the trade too soon because I thought the daily cycle conclusion was inevitably soon - which did not turn out to be the case whatsoever.
There was NO SELL signal when I exited that trade. Nor was there one for at least 9 days thereafter. Drawing trend lines on either price or the indicators was obviously not the problem, nor would it have kept me in the trade. ie I had it in my head that the US Dollar would not continue to fall and after exiting the trade prematurely with a gain I was in no mood to chase my obvious mistake and take a chance on turning a winning trade into a loser.
Everyone draws trend lines on price. The TSI usually gives me an edge (when I do what it says and not follow my bias) over those who draw trend lines on price.
The 200 ema indicator, when the periods are reduced to 100 or 50 or less, will indeed work well. The caveat, of course, is the number of whip saw signals as the time frame is decreased. As usual, the trade-off is speed over accuracy. Same with TSI (7,4) vs. TSI (25,13), for example.