Analysis

I didn't get a chance with a really busy weekend to do all what I wanted to do with analysis of my costing trades. However, I did get to go back on LEH, AAPL and a part of RIMM. Have not gotten to BIDU or CMI yet. But, the common theme from LEH and AAPL backtesting was that my stops with funded trades were far too loose.

It was better to have tighter stops (and this is relative) and get stopped out, reverse my position, then it was to stay in a position and allow it to correct itself.

With AAPL, though my profitable and costing trades were 50/50, profitability was 5:1 over costing trades, which is really good, as my goal is 4:1.

With LEH, profitable trades were 64% over the 36% costing. Profitability was almost 9:1 over costing trades, which is excellent.

With most of the AAPL and LEH trades, when I got out of a bullish trade, I would immediately do a SWS (Switch Stop), meaning reverse positions. However, this would only be at pivotable points (meaning at resistance or support either trend or otherwise). A few times, I did get whipsawed.

My backtesting started back on 5/21/07, so a little over 2 months worth. That was just an arbitrary date.

My positions were small with 1-5 contract sizes at either slightly ITM, ATM or slightly OTM, depending on where the stock was.

Since I'm fairly wiped out from the weekend, I will be going to bed early and getting up early to continue with my stock work tomorrow morning.
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