EOD strategy advice

[alphawave]

I want to develop a strategy which is based on EOD data and allows me to place limits and stops for the next day (or after the market opens) on the DJ with a view to letting the trade run for a number of days.

I'm guessing this will have to be some type of trend-based system with large stops which will need to be monitored a few times a day to adjust the stops etc. Although not a fan of spreadbetting, I feel that in this type of strategy the spread/bias may not be too much of a hurdle.

I have only ever dabbled in trading from a intraday perspective so this is new ground. I'm looking for some pointers in the right direction, some tried and tested methods by anyone who has traded this way with the aim of refining (if possible) something that suits my profile.

Any advice is appreciated.

AW

 

[Scorny]

Have you read Alexander Elder's "Come into my trading room"? It may answer alot of your questions.

Scorny

 

[Splitlink]

I want to develop a strategy which is based on EOD data and allows me to place limits and stops for the next day (or after the market opens) on the DJ with a view to letting the trade run for a number of days.

I'm guessing this will have to be some type of trend-based system with large stops which will need to be monitored a few times a day to adjust the stops etc. Although not a fan of spreadbetting, I feel that in this type of strategy the spread/bias may not be too much of a hurdle.

I have only ever dabbled in trading from a intraday perspective so this is new ground. I'm looking for some pointers in the right direction, some tried and tested methods by anyone who has traded this way with the aim of refining (if possible) something that suits my profile.

Any advice is appreciated.

AW

Overnight trading, I have heard, with the DJ can still be hairy even with spreadbetting. I swing and position trade and am always learning something new. Because of my time zone and working hours I trade UK shares. These are easier but, even so, the spreads in the first hour's trading of the day are normally wide and a rolling bet can be stopped out at the opener. So be careful of that. Sometimes, I put my stops at the "market" quote instead of "theirs". I guess it's cheaper to get stopped with a close stop than with one farther away, you can always get back in when the prices settle if you are still like the share.

Split

 

[tomorton]

Hi alpha

The system I use does not quite fit your parameters but it is consistently profitable with real money (the real test) over 18 months for me now. It is basically Marc Rivalland's swing trading technique, modifications for scaling in / out purely to sort out money management of my account, I do not differ from MR on the TA. Lots of info on T2W on this, also see MR's own website and book.

It relies on EOD data, high and low of the day. But you would open your positions during the next day. A long would be opened tomorrow if today was a swing low in an uptrend and tomorrow's range (ie both the low and high) were both above today's. Of course you won't know that until the end or nearly the end of tomorrow's trading. The beauty is though that the stop would be today's low, so effectively you are only risking one day's range of the equity or index you are speculating in. That would be too much for an intra-day trader, but acceptable for swing.

I can say that on the FTSE100, Friday was a possible swing low in an uptrend, and may be confirmed Monday. Friday's FTSE100 range was 5355-5394, if the low Monday is higher than 5355 AND the high Monday is higher than 5395, this will confirm Friday as a swing low and I will be going long. This will be as early as possible in the day but probably will need to wait for the Dow to open before I put any faith in a FTSE low as the DJIA is in a downtrend.

On opening, I try to immediately enter my stop and then know my loss is capped.

Might be worth you trying it. And don't forget you can place spreadbets on the 100 even after market close if you don't have acces to a screen during the day.

Best wishes,

Tom