Plan M

I decided to pick various good things out of each of the strategies that I had come up with and tried out in the past...which means a bit of review of all my old posts and charts.

The final version is going to be based on one of the oscillators that were among the most promising, half of the Counter Trend Positioning strategy, a sprinkling of Point and Figure charting and a heavy dose of option picking.

In the past I tried to make oscillators work for every situation, but they don't. Most work well during certain phases of the stock price trend and the trick was to know when they stopped working and change the strategy or move to a stock that is following the pattern. While it could be said that it is "curve fitting" to make a system work for a particular stock but I feel that curve fitting is exactly what is needed. I don't feel that it is a bad practise as long as it is used in the correct context. Fit the system to the trend and watch for the trend to setup that the particular system works with. Uptrends are the easiest to play as things are easy, buy long stocks or options and let them ride to catch various percentages of the wave as it tracks along a trendline.

Then the trick is to find the next trend system, the one that fits the next profile as the stock transitions. Perhaps this is the horizontal consolidation pattern that stymies the typical trader as there is no up or down trend in place. This is a good time to use a good swinging oscillator to trade long AND short or calls and puts. a better plan might be to use an option strategy, call or put spreads or even a strangle... the iron condor seems to be the easiest to setup.

Playing the downside can be tough as the downside is typically fast and furious and the main move is easy to miss and is, very often, not forecastable.

Ultimately a single stock could be used to trade successfully, I believe. Daytrading is often based about one stock or index or even just a select handful. They get to be familiar and often easier to spot when a change in trend is occurring because of this. Having said that I do not plan to only trade one stock as trends are easy to track.

Next up: review and idea selection... rules, strategies, indicators etc.

Jeff.