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Jim,
I have noted that you try to add only one position a week when you move from
cash to fully invested. With my system, I am either long or short and if I
get stopped out during the middle of an intermediate term move (a few weeks to
a few months) I don't have good criteria for getting back into the stock
market. I would be interested in suggestions from you or others regarding
strategies for getting back in or for other systems that would compliment the
one I use.
I use a fairly simple momentum based system that has me long when the market
is making an intermediate term move up and short on intermediate term moves
down. Before I enter long positions, a 13 day moving average of the 34 day
StochRSI must be below 0.2 and been curving up for at least 3 days. My buy
decision is triggered by the crossing of a 14 day RSI above a 28 day RSI.
Before I enter short positions, a StochRSI(34,13) must be above 0.8 and been
curving down for at least 3 days. My sell decision is triggered by the
crossing of RSI(14) below RSI(28). Due to the time constraints imposed upon
me by a day job, I have not spent any time optimizing or simulating this
system. It is, however, generally profitable in the real world.
When I get a buy signal for the market (NYSE Composite) using this system as
well as breadth indicators such as the McClellan Summation Index, a MACD of
new highs and a MACD of new lows, I run a Metastock Exploration for this
system on my list of individual securities. Within a few days on either side
of a market buy or sell signal, I get lots of buy or sell signals for
individual securities. Largely as a result of your weekly pick posts, I take
a look at the individual securities and their long, intermediate and short
term channels. From this evaluation, I try to pick the four or five stocks
that have given me buy or sell signals and that I think will move the most in
the direction I desire. My experience with this system has shown that as time
elapses from the buy or sell signal on the NYSE, the quantity and quality of
the buy and sell signals I receive on individual securities declines. That is
to say, I do not get as many signals and the signals that I do get are not as
profitable as the signals I get nearer to the signal on the market.
As you can see, adding a position a week would not work well with this system.
For it to be profitable, I need to jump in with both feet when I get a signal
on the market. What strategies would you suggest for developing a system that
adds positions in a more measured way or how would you, or others, suggest
getting back into the middle of a intermediate term move after being stopped
out.
Thanks for your help.
Dan
Pocatello, ID USA
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