Is Daily Better Than Monthly?

Aug. 2, 2023

I’ll answer my own question from the title.

Yes, of course Daily bars are better than Monthly bars.

This week we’re looking at what timeframe is best for long-term stock trading, and today we’re looking at data that will clearly show Daily is the best way to trade.

First, no one outside of the Vanguard executive committee looks at Monthly charts. They’re dumb.

Second, Daily is superior due to more trades, more possibilities, and, thus, more money.

Plus, trading a Monthly chart will get in late, when the trend has already moved up 30, 40, even 100%! Daily charts will get us in on the ground floor of those massive trends.

Oh, and Daily allows us to get out much more precisely. Waiting for a close below a Monthly moving average is suicide.

No, Daily is clearly the way to go. Heck, 4-hour charts are probably even better.

So, here we go.

We’ll take the same system and adapt it to the Daily chart.

Here are the details:

Stan Weinstein Daily Robot

Long Entry: Enter Long at the open of the next bar when price closes above the 150-day SMA for 4 consecutive bars. (You could use different consecutive closes, but they don’t seem to be as good.)

Exit: Get out at the open of the next bar when price closes below the 150 SMA.

Simple and effective. Here’s the Curve on the SPY from 1994-2023 trading $10k of stock each time:

It looks pretty good. Except for that period between 2000-2002 on the left side of the curve.

Here’s the Report:

Hmm, the win rate has dropped substantially. It’s now down to 32%

And the Max Drawdown from Close to Close has jumped mightily all the way up to $3,600.

What the…?

This seems okay but a lot worse than the Monthly chart.

How is that even possible?

In our next Newsletter, we’ll look at the favorite timeframe of some of the best traders in the world.

Surely that one is better than Monthly.

Talk to you soon.

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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.