Tuesday, August 19, 2014 5:51:30 PM
As you know both Jaws and I have been watching your TD1 system. For sure it is giving some impressive monthly yields and therefore I am now allocating a small portion of my capital to your system. So far only one live trade and it was a loser, which is always the way it starts when I go live with a new system. That is why I always start out small and build my positions with each profitable trade.
However, one thing that I could never get out of my head was the number of trades that yielded 7-12% and yet some trades just managed to eke out the 3% gain. So I started looking to see if I could figure out why and I think I came up with something that could potential almost double the yield from the current numbers.
Below is my chart for tracking the TNA trades. The green rectangles are good 3% trades and the one red one is a failed trade. If you look you will see that during June the 3 trades all made gains much bigger than 3%. But then in Jul, 2 of the trades just managed to make the 3% and one trade failed. If you look the MACD at the bottom you will see that Jun was in an uptrend and Jul was in a down trend.
So I am making the assumption that during an uptrend the TNA trades are going to be much more profitable than 3%. This would normally correlate to waves 1, 3, and 5. During the same time frame the TZA trades will represent counter trend waves (2 and 4) and they will be much smaller in movement.
So here is a new set of rules I want to try for exiting a trade. These rules will apply to both the TNA and TZA charts with MACD.
1. If the MACD trend in down, exit at 3%.
2. If the MACD trend is flat or up, exit at the next signal for the reverse trade.
As an example for #2, the current TNA trade that was opened 8/4 was still in a down trend at that time. But by the time the 3% sell signal came on 8/11, the trend had turned up. Based on this fact, the exit will not come until TZA gets a buy signal. This current run now has a 10.3% gain. They is way better than just 3%.
In the spread sheet below you can see the effect on the gains, they almost doubled.
However, one thing that I could never get out of my head was the number of trades that yielded 7-12% and yet some trades just managed to eke out the 3% gain. So I started looking to see if I could figure out why and I think I came up with something that could potential almost double the yield from the current numbers.
Below is my chart for tracking the TNA trades. The green rectangles are good 3% trades and the one red one is a failed trade. If you look you will see that during June the 3 trades all made gains much bigger than 3%. But then in Jul, 2 of the trades just managed to make the 3% and one trade failed. If you look the MACD at the bottom you will see that Jun was in an uptrend and Jul was in a down trend.
So I am making the assumption that during an uptrend the TNA trades are going to be much more profitable than 3%. This would normally correlate to waves 1, 3, and 5. During the same time frame the TZA trades will represent counter trend waves (2 and 4) and they will be much smaller in movement.
So here is a new set of rules I want to try for exiting a trade. These rules will apply to both the TNA and TZA charts with MACD.
1. If the MACD trend in down, exit at 3%.
2. If the MACD trend is flat or up, exit at the next signal for the reverse trade.
As an example for #2, the current TNA trade that was opened 8/4 was still in a down trend at that time. But by the time the 3% sell signal came on 8/11, the trend had turned up. Based on this fact, the exit will not come until TZA gets a buy signal. This current run now has a 10.3% gain. They is way better than just 3%.
In the spread sheet below you can see the effect on the gains, they almost doubled.
Trade the Charts and not the Heart - Expect the trend to
continue until it doesn't - Realtime is the real deal
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