Skipped a day

I did some trading yesterday but my heart was not in it, weather was miserable and I lost focus.

I also had another thing in mind. I decided to have a look at the backtesting available in esignals.

Well, I am not familiar with their formula language enough to write my own so I tinkered with a couple that were already in and just changed some colors and settings. Very interesting tool but I do not want to invest the time into learning the programming just yet. I ended up setting a backtest to include only 200sma crossings to allow for both short and long trades based on the Global Gold index.

Too many trades, huge profits, not really what I was looking for.

It did allow me to overlay a green shading to quickly recognise a period where the price was over the 200sma though. This was visually helpful in scanning (manually) through the last month to see where the trades would be based on my previous PP200 strategy.

This was more interesting so I took some notes based on four entry criteria, long positions only.

Ignoring GLobal Gold and watching only the ETFs, HGU first, I counted 33 trades that met my PP200 rules in that the price crossed above, tested as a low or just remained above the 200sma (minute scale). There were far more but they were obvious no-goes based on the previous setup, huge downtrending sma, sharp whipping, cross too late in the day...etc.

Placing these trades and about 90% of the move on a spreadsheet, tracking the number of trades, commissions, a (-30%) fudge factor, as many losing trades as winning trades with a certain stop loss for every single loser and comparing different position sizing... I saw a nice picture of a month of easy trading.

So, the long and short of a HGU study showed profits overall even trading only 100 share positions... sure there were a few losing days overall but the final net profit was still in the 8% range for the entire account. This bumped up to near 70% if all trades were based on a 500 share position. I choose to not trade over 500 shares right now...or even in the next month or two even with a good success rate so I use this as my maximum.

Now, I changed a few rules for these trades. Remaining longer at break even levels to let the price move. I have found that a lot of the moves that involve the 200 sma tend to be longer trending moves. I did not apply particular stop methods other than to have the 50 sma plotted on the same charts. I expect that using the 50 sma would lower some of my larger trade gains as the pullbacks may go too low for me to hold. the 70% fudge already mostly accommodates this as I noted that some trades were greater than 70% of the move before stopped and some were lower but 70% seemed to be pretty average.

I ran HGD as well and came up with far less in returns, but still positive. Keeping in mind that these trades would be the equivalent of shorting Global Gold they would make a good addition to the HGU profits...one does not get traded with the other so, even though I could hold both positions simultaneously, I would not have to. This allows me to look into other stocks or ETFs to trade at the saem time to also boost my bottom line...after doing some more research first though.

HGD at 100 shares for the month was 1.8%, 500 was 34%. Still respectable.

Add the two up for a 9.7% to 104% returns...net...tax free.

Now for the execution...as I type I have Global Gold setup with an alert to let me know when it is approaching the 200sma so I can watch it more carefully to see if it sets up for a trade around lunch time.

The proof will be in the pudding.

Jeff.