New Trades For Monday As we saw on Friday with TLT and HP, some signals are triggered on the Open of trading without a "Pending" warning the day before. Therefore the official New Trades posts by necessity has to go out in the mornings just after the Open. For Monday, I see no new trades pending, but it will be after the Open that we will know for sure. What A Difference a Month Makes As the market maddeningly goes up against most of our new short positions some points and perspective must be made. Although the average number of days from entry to best profit levels is at 31 days per signal, many of the very best trades take over 50 days to reach maximum profitability. Taking a look at the full table of trades from April you will see that many of the trades are still open basis the June options expiration. But because we were still trading the old trend lines in April, not this new strategy, these trades should be considered hypothetical. The methodology is identical, and the indicated option entry/exit prices are based on the then real time quotes. As the table indicates, had we started the new system a month earlier, results to date would have been much different, with 10 out of 20 trades reaching triple digit gains. The results going back through last October look much the same, if not better. Strategy - Targeting Profits Going over all of the data points for every trade from last October, it appears that the best target profit level is at 75% per trade. In other words, exiting a trade at +75% option gains generates the highest average returns per trade. I am myself dropping my target to that number, but still leaving on a small portion of each successful trades as my "lottery ticket" for extended gains. Notes *There are three independent market indexes in the mix, SPY, QQQ and IWM. This is on purpose as each model represents separate, albeit similar trading patterns. Current signals represent a perfect example. While SPY is short, QQQ and IWM are long, both with stellar triple digit gains. **Another characteristic shared across the entire testing period is the clustering of trades around 2-3 day periods. This is especially true of mid-February (not shown) where a slew of Buy Signals went on to generate some of the best returns during the entire test period. Not surprisingly, Feb 8 through March 13 coincided with one of the steepest rallies in the market this year. ***Because the trades above are based upon signals generated before we started trading the system they have to be considered, rightly so, as hypothetical. Regardless of the care and diligence that has gone into backtesting the signals, please read and understand the following standard disclaimer regarding hypothetical performance numbers: These performance numbers are based upon historical backtesting and as such must be considered hypothetical. Although every effort has been made to preserve the integrity of the methodology, hypothetical results have certain intrinsic limitations, including but not limited to the fact that these results are not reflective of an actual real time trading log, they are also subject to assumptions inherent in option results as implied from hypothetical trading, No representation can be made that any account will or is likely to achieve profits or losses corresponding to the historical backtesting. Charts On these two trading charts below, the arrows represent respective buy/sell signals:
