Highlighted Trades - 05/01/2024
We saw 14 trades today - 12 long and 2 short - across 6 tickers. Let’s check them out.
Our big winner today was this long in IT, where we made 0.31% in total. I’m a big fan of our initial entry conditions - every sign we look for is present, including a few extras that we like to see. Fir instance, we see it breaking through a previously established support level, as well as both TK-lines sloping upwards. On the surface, our re-entry looks relatively questionable, since MACD had briefly gone negative, but upon further examination, I’d say the hyper strong short term momentum and large green candle effectively mitigate that.
The only part of this trade I really find objectionable is that first stop-out. Our system exited at $421.38 since the new Tenkan-Sen level wasn’t established until the end of that candle, but if you were watching live, you almost definitely saw it breaking through the Tenkan-Sen level before that, meaning you made more total profit here. Ideally, we would have avoided that stop-out entirely, or gotten back in faster, since we missed out on most of the potential returns from this trade due to it. Ultimately however, a stop is a stop, and our system called an early exit there. If you were watching this live and believed in the signal, you could have held through it for some extra profit, but that would have come down to your personal trading preference.
Comparatively, our biggest loser of the day was CHRW, losing a total of 1.03% over the course of 5 entries. I’m gonna say right away, I don’t think anyone lost anywhere close to 1% on this one. To a human trader, the flaws here are quite obvious.
To start, the MACD dies almost immediately. While at all of our re-entries, it’s technically positive, for all intents and purposes, the differential is completely neutral. Additionally, the system is visibly exiting and re-entering too quickly, creating signals that become meaningless fairly quickly. I’m confident in saying that a human trader would have realized this quickly. It’s highly unlikely anyone took any of these entries beyond the 3rd, and frankly, I would have ignored the second one due to the extremely weak MACD.
If you ignored entires #4 and #5, you cut your losses to 0.58%. If you just took the first, you only lost 0.21%. I’d like to formally apologize for our system calling this set of trades. The loss is unfortunate, but I’m somewhat re-assured that these are at least obviously poor to a human trader.
The last trade I want to highlight here is this long on BIO - losing us 0.35% - as another obvious fake-out. The main reason I say this is the incredibly weak TK-cross. After the crossover, the Tenkan-Sen line is only barely above the Kijun-Sen line. This is something that’s difficult to evaluate algorithmically, but readily apparent on a chart view. On top of that, the lagging line is only barely above the price action 6 periods prior, the MACD is weak, and the chart has had a lot of choppy movement prior to our entry. If you did your due diligence, it’s fairly unlikely you got into this position in the first place.
Today was a weaker day for our system. It’s unfortunate to see, and I apologize for many of the poor signals we saw today. I want to emphasize that our algorithm is not trading advice; we never advise our users to take a trade without first doing their own due diligence. If you examined the charts before taking our algorithm’s trades today, you probably avoided almost all of the major losers. Regardless, we are always working to improve our algorithm, and hope to see better results in the future.
That’s all I have for you tonight, thank you for reading and happy trading!
