This entry was posted on Friday, June 15th, 2007 at 9:39 pm and is filed under Education, Trades, chart patterns, market commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
I just wanted to give you the official update on the SP-500 swing long trade. McClellan (T2106) closed above the zero reading. This was the exit I was looking for. The exit is Mondays open. 40+ SP points as of todays close.
Let’s look at how backtesting can give you an edge.
- gave me an idea of historical after entry drawdown
- gave me an idea of the average holding period
- gave me an idea of the types of return to expect
Let’s look at the graphic I posted last week with the original trade recommendation:
Let’s see what this trade looks like:
+2.83% Return
6 Bars Held
MAE = -0.22
Kind of an average trade eh? THAT is the power of backtesting in a crystal clear example. A historical edge was demonstrated with a clear and concise picture of past trades. This time it worked out in my favor. I hope it did for you too. Let me know how you played the trade.
Have a Great Night!
Dave Johnson