I sold my SH last

    Posted by randy on 27th of Sep 2011 at 03:32 pm

    I sold my SH last friday during the day with a nice gain, I then repurchased after hours on friday and gained a few bucks to stay with the system. I  based this on Matts 30 min chart when the macd histogram crossed below the 8 ema. I wanted to stick with the sytem in general but obviously if I had continued to use that sell signal I would have been much better off. It is now close to signaling a buy so I may hold at least a part of my short and see what happens tomorrow. Some of you smarter fellows should be able to figure a way of using this as a way of protecting profits. I would be interested if some one comes up with something.

    I thought Matt's 30-minute SPY

    Posted by frtaylor on 27th of Sep 2011 at 04:37 pm

    I thought Matt's 30-minute SPY system was the 25/170/25 MACD histogram crossing the zero line.  If you could reference a chart, say from the blog or from a newsletter, I would be very interested to see the reference.

    FRT

    frtaylor - I think you're

    Posted by yojimbo on 27th of Sep 2011 at 05:49 pm

    frtaylor - I think you're right about Matt's system involving zero crossovers.  However, randy's idea about 8 ema crossovers seems to get you into trades earlier than the zero crossover.  Unfortunately, it also seems to generate a lot of whipsaws when the histogram is extended (see July 26 to August 5).  Any ideas about how to handle those?

    Here's a reference to the system: http://breakpointtrades.com/blog/post/174601/

    Yohimbo, perhaps using another indicator

    Posted by angelo851 on 28th of Sep 2011 at 11:02 am

    Yohimbo, perhaps using another indicator such as the crossover of -DI over +DI on the ADX 14 as confirming the signal would have kept use mostly short during that whole downturn between July 26 through August 5. I just quickly visually looked at the chart for those days and noticed that the -DI on ADX 14 was over the +DI for that whole time...if I'm not mistaken.  

    Thanks, Angelo.  Also, RSI(14) stayed below

    Posted by yojimbo on 28th of Sep 2011 at 01:17 pm

    Thanks, Angelo.  Also, RSI(14) stayed below 50 for that whole time.

    I believe randy is only

    Posted by frtaylor on 28th of Sep 2011 at 08:02 am

    I believe randy is only using the 8 ema to exit the trade, not to enter it.  As a way to protect profits, such as the situation late last week.  Is that right randy?

    yes , I am using

    Posted by randy on 28th of Sep 2011 at 03:48 pm

    yes , I am using the 8 ema crossover to exit my remaining half of this short trade. I did exit half of the trade on the spy system signal. It is working out so far this time.

    In the past, I mentioned

    Posted by cw12 on 27th of Sep 2011 at 04:19 pm

    In the past, I mentioned a simple strategy in the past how to protect profits, or hedge against an underwater system trade. If you're interested, you can do a blog search for it. I'll use last week as an example.

    Last Friday, if you wanted to protect some profits on the system trade, you could have written some ES weekly puts. The ES SEP EOM 1030 Puts were trading at around 5 last Friday. If you think the ES will settle above 1030 on SEP 30, then short some of these contracts with appropriate position size. As long as the ES closes above 1030 this Friday (4:15 PST), then you make 5 ES points. The market could go down a decent amount, and you still make money with this option position, and with the system trade. If the market bounces like it has so far this week, then it becomes a nice hedge for the system trade. This is a way to stay in the system trade and still make some money back if the system trade starts going against you like this week.

    Personally, I prefer not to have all short positions or all long positions in my account. The out-of-the-money puts were selling at good premium last Friday. I wrote some ES and SPY out-of-the-money puts last Friday in case the market decided to bounce.

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