Here’s A Simple Trading System That Has Been 100% Correct On The Last 5 Trades
Dave Landry is principal of Sentive Trading, a money management firm, and a principal of Harvest Capital Management. Mr. Landry is the author of two top selling books, Dave Landry’s 10 Best Swing Trader Patterns And Strategies and Dave Landry On Swing Trading.
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Editor’s Note: Please read this entire
article in order to understand the point Dave is illustrating in his opening
statement about a “100% Correct System.”
100% Correct System
Okay, I’ve just developed a new trading system and the initial results are
incredible. The rules are very simple: If the market is down, you cover existing
shorts and buy it on the close. If the market is up, you sell your
position and go short. This simple system (illustrated below) has been
100% correct for 5 of the 5 trades.
On Monday, the Nasdaq dipped on the open
but soon found its low. It then rallied until early afternoon. Finally, it
traded sideways late in the. This action puts it back above support.
The S&P put in a similar performance. It remains
in a sideways trading range.
So what do we do? If it’s up on Monday,
then it’s down on Tuesday. And if its down on Tuesday, it’s up on Wednesday.
Obviously, the trading system illustrated above is “tongue in cheek.“
My point was that the market has now changed directions 5 times in as many days.
As mentioned last week, it appears to be falling into a pattern often typical with late summers (i.e.
choppy). I also remain concerned about the sectors, aside from a few in bona
fide uptrends such as the metals & mining and energy, many appear to be
trading sideways and/or forming potential tops. Many others have already broken
down. Therefore, on the long side, continue to focus on those commodity related
areas mentioned above. On the short side, continue to look for opportunities in
areas that are breaking down from high levels such as REITS, homebuilders,
selected technology, and retail.
As far as setups, Unit Corp.
(
UNT |
Quote |
Chart |
News |
PowerRating),
in the aforementioned strong energies, looks poises to resume its uptrend out
of a Trend Knockout (TKO). As usual, email me if you need the pattern rules.
FYI
On Wednesday at 11:00 EST, I will be doing my
interactive audio/visual presentation. Email me for a link if you’d like to
participate or would like the last year’s archives (covering entries, stops,
position management, damage control, scanning, sector analysis etc…).
Admission if free (to all) but the space is limited by the software–so sign in
early.
Best of luck with your trading on
Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. Learn my newest and most advanced version of my Bow
Ties Strategy. Click
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