I Want to Trade This

Sept. 16, 2024

For quite some time, the purpose for the Newsletter and my YouTube channel was to share ideas.

I always love hearing about well-researched trading systems and I thought I’d try to do that for you.

The problem? I have a lot of ideas.

I’ve studied Forex since 2009. I’ve studied dividend stocks for years. Same with Futures.

I’ve also studied momentum breakout stock trading for a long, long time and value investing since 2004.

In short, I have a lot of ideas on many different instruments, and many of those ideas are shareable.

And the Newsletter and YouTube is where those ideas come out.

But I’d like to get specific and talk about what I’m actually going to trade–or what I’m considering trading.

That was the idea behind the series of Newsletters on the Performance Page Portfolio. That’s something we could actually trade.

Similarly, I recently talked on YouTube about a Buy on Monday version using the NQ–see the video here–and traded it last week. (It was a winner).

I say all that as background for today’s Newsletter.

I’ve found a system I really want to trade. But I’m hesitant, and I think that’s stupid.

Maybe if I talk about it (and get some good feedback), it might help.

So let’s get into the system.

• It’s for the Daily chart. That’s good and bad, as we’ll discuss.
• It’s on the E-Mini Dow during Regular Trading Hours (YM.D in Tradestation). Why the Dow?
• It uses the RSI 2 (RSI indicator with 2 Length). A standard way to try to avoid overfitting.
• It gets in at the open of the next bar when RSI closes into Oversold (15). Typical for RSI 2.
• It has an ATR target of 0.8x the ATR stop of 16x.
• It has a timed exit of 52 days. To get out when nothing’s happening.
• It’s Long-Only. To capitalize on stock markets’ upward bias.

And here’s the Curve via Portfolio Architect:

It absolutely kills the market with or without dividends reinvested:

That seems like a slam dunk.

Why not trade it?

Several reasons.

And I’ll get into those in the upcoming Newsletters.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.