Wednesday, February 15, 2012

Buy #2. Stop tightened.

With SPY hitting a higher high today intraday, that brings the stop loss up to the low of Feb 1, which is 1312 on the SPX, and a not too distant 55.62 on TNA.

Today will be the 2nd buy signal if SPY closes 134.72 or lower. This will put the system all in long TNA. If we close above that value, it will remain just 50% invested.

Until tomorrow...


  1. hi
    if hypothetically i am trading say 100k account, how much percentage are people using your system for their portfolio?

    thanks all

  2. I know u werent asking me but i say whatever your comfort level.

  3. Samir, this is a complicated question the answer to which varies somewhat with every individual. Apart from external factors, one has to understand the risks: both in the number of times in a row the system may be wrong and the drawdown on each of those occasions. When you have an estimate to that question, ask yourself whether you feel comfortable with it. Most beginnings take on positions larger than they should and then, when they suffer a loss, they begin not taking "the next trade" or second guessing the system. This soon results in under performance and a treadmill of taking larger positions almost at random in the signal cycle to get even. And so on for a dangerous cycle. The preliminary answer is to take small enough positions so that you are comfortable taking every trade, win or lose.