Cycle Trading

[Duma]

Over the past year or so Jaws and I have played with JAK's daily chart to find longer term buys which is based on Slow STO 5,1.

I am always signing up for stuff just to see if some new ideas gets triggered. A Wendy Kirkland uses CCI 5, which I do sorta like.

But what I really like the best is RSI 2 which was thrown out on this board a year or so ago along with RSI 4 and RSI 10 I think. After watching for a while, it was obvisous that RSI 2 did what I was looking for.

So I have been paper trading RSI 2 on the major ETF's and MU for a while and acutally I like the results. I think it is time to go live.

The chart below is for QQQ. The rules used to mark up are the following:

Buy set up when RSI <30.
Buy when prices crosses the high of the last two days. (Got this idea from somebody, I forget who at the moment, but a really good rule)

Sell when Price crosses 10ema or RSI crosses 50. The 10ema is both a JAK and Patrick Walker ploy.

This has generated about 1 buy a month.

Oct 27 buy - gain of 4.35 points
Nov 15 - .48
Dec 6 - 4.12
Jan 2 - 7.42 trade still open

This is a total of 16.37 points. I think this strategy works best with options, so this would have generated about $1150 using just one option.

A QQQ Feb16 156 call bought on Jan2 for 4.12 would now be worth 9.40. So it has captured 70% of the move and generated a 71% profit on the investment.

All of this is only for one EFT and there are several more with different timings that can also generate a profit with little imvestment.