Bigbusiness
Experienced member
- Messages
- 1,408
- Likes
- 23
It is a shame there is not more interest. I am starting to work out a strategy.
My theory is that the Dow moves 50 points in at least one direction every day.
Most days it will move at least a little bit in both directions from the previous days close. There are only 10 days so far this year where it has only moved in one direction from the previous days close.
Some of these days, the futures have moved in both directions before the market opens.
Trading at the close, if I can use a system to predict a 50 point move, I have a good chance of either making my target or closing for at least break-even the next day. When my target is reached I then have the choice to look for more or take my winnings.
I will loose on the days where it only moves in the opposite direction to my bet, but I will make up for these with the days where it moves in my direction all day.
Some days I have a good idea that the Dow will move 50 points in one direction, based on the previous days action and support/resistance. Other days I have no idea and I wont trade.
There are also days like today where I closed my overnight short for a small profit as the futures were starting to rise. Now I still expect some weakness later in the day so I can look to short if the Dow opens higher, hoping that today wont be the 11th this year that the Dow goes in only one direction!
This is where it is handy to have a finspreads account to see if this works without risking too much money.
My theory is that the Dow moves 50 points in at least one direction every day.
Most days it will move at least a little bit in both directions from the previous days close. There are only 10 days so far this year where it has only moved in one direction from the previous days close.
Some of these days, the futures have moved in both directions before the market opens.
Trading at the close, if I can use a system to predict a 50 point move, I have a good chance of either making my target or closing for at least break-even the next day. When my target is reached I then have the choice to look for more or take my winnings.
I will loose on the days where it only moves in the opposite direction to my bet, but I will make up for these with the days where it moves in my direction all day.
Some days I have a good idea that the Dow will move 50 points in one direction, based on the previous days action and support/resistance. Other days I have no idea and I wont trade.
There are also days like today where I closed my overnight short for a small profit as the futures were starting to rise. Now I still expect some weakness later in the day so I can look to short if the Dow opens higher, hoping that today wont be the 11th this year that the Dow goes in only one direction!
This is where it is handy to have a finspreads account to see if this works without risking too much money.
Bigbusiness - you can get free 20 min delayed intraday charts (anything from 1min - 60 mins) going back 60 days at :-
http://www.prophet.net/analyze/javacharts.jsp
for all US shares and the main US indices. Also daily, weekly, monthly and quarterly charts going back to 1918.
http://www.prophet.net/analyze/javacharts.jsp
for all US shares and the main US indices. Also daily, weekly, monthly and quarterly charts going back to 1918.
Bigbusiness
Experienced member
- Messages
- 1,408
- Likes
- 23
rglenn,
I would be interested and will let you know what I am doing.
RogerM,
I use that website but can't find intra day charts going back 60 days. I save the chart each night and have started making charts from 1min data going back to 1997 using excel.
I would be interested and will let you know what I am doing.
RogerM,
I use that website but can't find intra day charts going back 60 days. I save the chart each night and have started making charts from 1min data going back to 1997 using excel.
Bigbusiness
Experienced member
- Messages
- 1,408
- Likes
- 23
I must be lucky today. Made my 50 point target shorting the Dow while it was still trading above the open price. Sold right at the peak at 3pm. I am not usually that lucky.
Now I can spend a bit more time working out a system.
Now I can spend a bit more time working out a system.
Bigbusiness
Experienced member
- Messages
- 1,408
- Likes
- 23
Thanks RRG,
Good advice and I agree with you entirely. I have been working on this for a while but there is a long way to go.
I wish I had spent more time learning excel and statistics. Here is some of the numbers I have churned out so far. They might not be correct as I haven't checked them yet.
From the last 851 trading days. From the previous days close:
504 days reached at least +50 points
529 days reached at least -50 points
202 days went both up and down at least 50 points
95 days only went one way, averaging a 154 point move
The average rise was 83 points
The average fall was 93 points
In conclusion,
In the last 851 days, the dow has from the previous days close:
Risen at least 50 points 59% of the time
Fallen at least 50 points 62% of the time
Gone up and down 50 points 24% of the time
Only gone one way 11% of the time
Good advice and I agree with you entirely. I have been working on this for a while but there is a long way to go.
I wish I had spent more time learning excel and statistics. Here is some of the numbers I have churned out so far. They might not be correct as I haven't checked them yet.
From the last 851 trading days. From the previous days close:
504 days reached at least +50 points
529 days reached at least -50 points
202 days went both up and down at least 50 points
95 days only went one way, averaging a 154 point move
The average rise was 83 points
The average fall was 93 points
In conclusion,
In the last 851 days, the dow has from the previous days close:
Risen at least 50 points 59% of the time
Fallen at least 50 points 62% of the time
Gone up and down 50 points 24% of the time
Only gone one way 11% of the time
Bigbusiness
Experienced member
- Messages
- 1,408
- Likes
- 23
My intention is to trade on days where there is a better than average chance of a 50 point profit.
A 62% chance of a 50 point fall is on an average day. There are some days when there is an improved chance. By trading at the close, there is also the chance of getting the 50 points before the market opens the next day. I don't have the data to work this out but it must boost the % a bit. I have seen several days where the futures are down 50 points before the open, there is some good news and the Dow opens higher and goes up all day.
This data is from January 2000, so recently the up days will do better than the down days. Using the current trend might improve the odds.
Still a lot of work to do but the results so far look interesting.
A 62% chance of a 50 point fall is on an average day. There are some days when there is an improved chance. By trading at the close, there is also the chance of getting the 50 points before the market opens the next day. I don't have the data to work this out but it must boost the % a bit. I have seen several days where the futures are down 50 points before the open, there is some good news and the Dow opens higher and goes up all day.
This data is from January 2000, so recently the up days will do better than the down days. Using the current trend might improve the odds.
Still a lot of work to do but the results so far look interesting.
Yes BB but at 21:00 tonight, how will you know how the futures will act overnight / tomorrow AM?
Your right, chances are they will go up OR down - but which way??
There is no way of knowing if tomorrow will be a 'better than average' risk day or am I missing something?
It really does seem like a 50/50 gamble to me.
Your right, chances are they will go up OR down - but which way??
There is no way of knowing if tomorrow will be a 'better than average' risk day or am I missing something?
It really does seem like a 50/50 gamble to me.
Bigbusiness
Experienced member
- Messages
- 1,408
- Likes
- 23
This is not a complete trading strategy, just some observations I have made. This thread is about market direction so I thought the observations would be interesting.
I don't intend going in to greater detail. If people think it wont work, that is fine. I am only testing it out using very small stakes with finspreads overnight and then trading during the day.
Yesterday I went for the -50 target, the Dow only reached -7 but I manged to make 50 points by closing my overnight short before the market opened and then selling again at 3pm.
It's more for fun than to make me rich. If it does by some miracle make money, I wont want to give away all the information.
I don't intend going in to greater detail. If people think it wont work, that is fine. I am only testing it out using very small stakes with finspreads overnight and then trading during the day.
Yesterday I went for the -50 target, the Dow only reached -7 but I manged to make 50 points by closing my overnight short before the market opened and then selling again at 3pm.
It's more for fun than to make me rich. If it does by some miracle make money, I wont want to give away all the information.
Similar threads
