Thursday, October 05, 2006
Stopped Out
The model stopped out. If this level holds then the model will reverse to the long stance again. The fluctuations in the last couple of weeks or so have been too rapid to trade and have whipsawed the model around to lose money or go sideways... From an E-Wave perspective the NASDAQ 100 index could be forming an ending diagonal formation. That would be the bearish case as that is the end of a move... But a new post July high would be coming in the next days... Bottom line is things are now as unclear as they have ever been.
Subscribe to:
Post Comments (Atom)
3 comments:
Well, that's a bummer as far as your model is concerned. Were you stopped out completely, or are you still short some shares? Your last post indicated that you were up about 4% already this month, so hopefully you were able to preserve most of your profit.
Can you shed some light on this mysterious model that you have? What is the raw data that you are feeding in? Is it strictly based on technical analysis, or are you looking at other economic data as well? Details would be nice, but I understand if you want to keep your methods under wraps. Also, do you think your model would work for other stocks or indices besides the Nasdaq-100?
I now have a loss of a few percent for the month. This is because I use a lot of leverage. The model specifies to reverse position in this situation. I didn't because I didn't have time to watch the market. I actually kept some put options while closing the short position. I will reassess things in the morning.
The model is purely based on technical analysis, time series analysis, and trading rules. The core idea was initially described here. I have fine tuned it a lot since then and added a whole bunch of trading rules. You could apply the methods to other indices etc. I haven't. NDX has a high beta yet is less risky than trading any individual stock. If trading stocks beta is important as margin limits are based on dollar amounts rather than on risk as they are in the futures markets. I find that NDX makes the nicest, cleanest moves of any index I have seen. For noiser indices and securities the error is likely to be bigger relative to the potential trading gains.
Thanks for the comments and guidance. I like your aggressive goals. Thought I was aggressive. Look forward to learning more. You are now in my blogroll :)
Post a Comment