Broadening bottom : (Trading System 4)
After series of five higher highs and lower lows called inverted triangle pattern or broadening pattern, Trade-Ideas report an alert when the price touch the bottom of this pattern then turn back up.
We buy a stock then when it is alerted and sell it after 30 minutes.
This alert is provided by trade-ideas.
Below you can find a description of additional filters we are using to pick only the best patterns.
Summary :
Buy Rules :
- Stock touch the bottom of broadening bottom pattern and turn back up (Trade-Ideas alert : Broadening bottom)
Sell Rules :
- Sell the stock after 30 minute.
Filters :
- Stock Price >1$
- Stock with a spread < 20 cent
- Average $ Daily Volume > 10 000 000$
- Volatile Stock : Volatility > 0.4%
- Current volume (Relative volume) > 2
- Day range > 50%
Very important information :
- We are using a simple sell rule, because we use an automatic system for picking theses stocks, and we are handling lot of data.
It means that if you use personal sell rules, you can highly improve this trading system results.
Here is some suggestions of what you can do :
- Use stop loss to protect you from loosing trades.
- Don't close the winning trades after 30 minute and let your profit run.
- Close position if it show a bearish pattern.
- Use a profit target to close positions.
...
Now this is the results and graph for this trading strategy :
Number of trades : 37
Winning trades : 23
Loosing trades : 13
Average performance per trade : 0.25%
Average Daily performance : 1.5% (For 30 minute holding period we can easily take six positions per day if there is enough alerts)
Average Monthly performance : 36.71%
The monthly performance seems to be too high, we need more data to confirm theses values. Keep on going here as we are updating theses trading systems every week and adding new ones.
NB : The average performance per trade is calculated with 0.1% commission and 0% slippage (We don't consider slippage because we buy and sell at the market). |
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