StockFetcher Forums · General Discussion · RSI 2<< 1 2 3 4 5 >>Post Follow-up
SFMc01
296 posts
msg #83906
Ignore SFMc01
12/6/2009 10:10:59 AM

BarTune1: Thank you.

Do you use these systems to trade automatically ... like with TradeStation? Daytrading?

Would you be willing to discuss this further by contacting me at " SFMc01@aol.com " ?

Thank you

BarTune1
403 posts
msg #83911
Ignore BarTune1
12/6/2009 12:25:56 PM

No, I don't use any automated trading programs .... I work 9-5 but generally have access to the internet during the day ... as for these trades, I often enter them end of day .... usually watch the market pretty close during the last half hour of trading.

Here is my scan for ETFs which identifies hi/lo RSI(2) readings and hi/lo %B readings. It also shows the 5dma which is my normal exit.

Remember also that I also strongly consider where the markets are in general (i.e., via VIX divergence) before deciding whether to go enter long or short trades period.

If you remove the ETF from the scan then you can get individual stocks if you are willing to take more risk.

show etf
and average volume(90) above 1000000
set{%B,Bollinger %B}
and add column RSI(2)
and add column MA(5)
and add column %B
and add column MA(200)
and sort column 5 ascending
Draw Stochastic %D(9,5,3)
Draw Bollinger Bands(9,2.0)
Draw RSI(2)
Draw MA(5)
draw Bollinger Oscillator(9,2) line at 90
draw Bollinger Oscillator(9,2) line at -90



drew9
171 posts
msg #83913
Ignore drew9
12/6/2009 12:42:39 PM

BarTune, great insights. It sounds like you have done well with this method. Back to my prior question, I was interested in the scaling in approach and wondered if you choose to use this in your trading today? Can't really run a backtest with this method but wondered how many days and what percentages of your trade size you have used?

chetron
2,817 posts
msg #83914
Ignore chetron
12/6/2009 12:48:42 PM

CLICKABLE....


Fetcher[
show etf
and average volume(90) above 1000000
set{%B,Bollinger %B}
and add column RSI(2)
and add column MA(5)
and add column %B
and add column MA(200)
and sort column 5 ascending
Draw Stochastic %D(9,5,3)
Draw Bollinger Bands(9,2.0)
Draw RSI(2)
Draw MA(5)
draw Bollinger Oscillator(9,2) line at 90
draw Bollinger Oscillator(9,2) line at -90
]



BarTune1
403 posts
msg #83917
Ignore BarTune1
12/6/2009 2:17:40 PM

drew,

my method is not completely scientific, as I still pick and choose .... as for scaling in, I have not been able to follow Connors 1-2-3-4 increments because my initial position has usually been somewhat significant .... I have added single units or double units, depending upon what margin is available in my account if a position becomes even more oversold or overbought as the case may be .....

ideally, based on my position size I would use $5K as a unit .... upto a max position of $50K following Connors TPS .... but, I have never scaled in that long because the position has always reversed .... remember, you are only entering these positions after they have become significantly oversold/overbought/extended in the first place ....

I realize some people hate adding to a position that has not gone the right way, however, if you liked the position initially based on your technical analysis at the time, how can you not like it more when it has sold off further?

I don't have as much problem adding to ETF positions as I do stock positions. Primarily this is because the risk is less .... ETFs don't collapse like a stock could .....

Another thing, I have tried to be careful trading commodity based stocks or ETFs. Oil, Gold, Nat Gas have show incredible runs and are not the best "reversion to the mean" plays.

Connors analysis indicates Country ETFs display the best reversion to the mean qualities. So, every situation is different. I don't have every rule I follow written down .... just feel more comfortable with some positions rather than others based on past experiences.

drew9
171 posts
msg #83927
Ignore drew9
12/6/2009 11:35:39 PM

Thanks, good insights! Let me ask one more to all. What do you use as a trade size in your trading accounts. In other words, let's say you have $100K to play with. How many trades do you divide this up by to determine your trading size. I may be a bit aggressive but have been using 13 (lucky number) for mine. So for a $100,000 account, mine would be $7,692.

13th_floor
724 posts
msg #83928
Ignore 13th_floor
12/6/2009 11:54:35 PM

with my $200k i use $6500 a trade unless one of those low floaters i play,then just around $2500/$3000

Kevin_in_GA
4,544 posts
msg #83930
Ignore Kevin_in_GA
modified
12/7/2009 8:01:05 AM

I would suggest starting with how much you are willing to lose on any given trade.

Let's say that you are conservative in your trading, and want to put no more than 1% of your trading captial at risk on any given trade. Then the appropriate position sizing is fairly easy:

You simply divide your total capital into n "trading units", and set your stop loss at n%.

Example: $100K total capital would mean that at 1% risk you would not want to lose any more than $1000 on any trade. Divide your money into 10 trading units of $10,000, and invest 1 unit at a time with a 10% stop loss in place.

If you want to diversify more, use 20 units of $5000 each with a stop loss of 20%. You can scale in this way but as the individual bet gets larger, you need to adjust your stop loss to keep it at 1% risk.

Or just go for broke - 100 units at $1000 each, no stop loss needed.

SFMc01
296 posts
msg #83967
Ignore SFMc01
12/7/2009 4:13:05 PM

13th_floor & Drew:

I have found that there are definately differences in execution times based on whether the trade is in round lots or not.

With buy-ins at the level you indicates, do you give any consideration regarding lot sizes or rounding down to nearest 10 shares, etc?

Thank you,

Steve



BarTune1
403 posts
msg #83978
Ignore BarTune1
12/7/2009 9:07:38 PM

Remember, certain ETFs you can only buy in lots of 100. One more observation, if you stick to trading ETFs your risk is markedly reduced. I think it was observed that during the 9/11 crisis that the market dropped something like 8% - and that was on a very rare event. In contrast, any particular stocks can collapse. So I think you can risk (perhaps signifacantly) larger units if trading the ETFs. That being said, you have to adjust again if you are going to play the double or triple leveraged ETFs.

As for my ETF stock screen that was posted earlier - I watch it everyday - and I normally keep my eyes open for ETFs where the RSI(2) is greater than 98 or less than 2. I also keep my watch for ETFs where the %B is close to 1 or above or close to 0 or below. Those rules are alot tighter than some of Connors ETF trading rules (from his book) and will identify ETFs that are extremely oversold or overbought as the case may be.

StockFetcher Forums · General Discussion · RSI 2<< 1 2 3 4 5 >>Post Follow-up

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