ETF SWING & DAY TRADING

[Duma]

capt_jmj * VTO System *

Several of us have had the same feeling that you have expressed that there are times that it would appear it would be better to not exit the VTO trade when RSI hit 50. Several mails were posted about possible ways to exploit the trade to say in longer for better results, but no one had described a good method. The only thing I have found was trading with CCI(20) and RSI(14) when they were both near or above their upper limits. However, usually, this signal came a day or two after the exit. If I had reentered the trade, the results were pretty good. But I could never develop a set of rules that I was really happy with. I encourage you to look also and see what you can find.

For my personal trading, I am using VTO as an add on to my trading. All of my VTO trading is on margin. There have been 3 trades so far this year. In all three cases, 28 vs 30 entry did not come into play, and in all three cases, staying in the trade would not have resulted in any significantly better returns (no breakouts yet this year). The three trades gave me returns using NDO (next day open) of 1.9%, 1.0%, and 2.6%, for a total of 5.5%. Days in the market was only a total of 24, which is just over 25% of the time. Using a margin cost of 7.5% (current for BrownCo), the cost would have been .5%, for a net gain of 5.0%. So add this to whatever other trading you are doing gives a pretty good trading model IMO. If one had just sat on Spider shares, the gain for 1Q would have been 4.9% with dividends. So if one invested to 100 margin with VTO, the gain would have been a total of 9.9%. Investing in 2X funds would reduce the amount of margin required. I doubt that few traders saw their portfolio grow by 10% YTD, except for Nococa, Little Chico and the others who are day trading.

The CSGCOS that tclark1 and other have developed looks very promising as a base system also. I have looked at it, but have not decided to follow it yet. I just don't have the time to really get into it at the present. In my experience, the VTO using RSI is the only sigle indicator system that works well. Any system that I have come close to using had to use multiple indicators, just like CSGCOS. I am currently playing around with using simple trend lines. The results look surprisingly good. Just like Nocona's RSI day trading method, simple is good.

Cheers,
Jon