Patience and the Nitty Gritty.

I have two trades that I still have open one from last week and one from last month.

My other trades ended up in the red overall so I am not overly impressed with the method that I was using...that was the test of the service. Even had I exited the few that did turn green at the peak I suspect that I would have ended negative for the test anyway. That is not anywhere near enough of an edge to sway me into using this particular service. Of course, I shouldn't have been surprised.

So on to the next more serious trade plan with a healthy sprinkling of patience. Now that I am using all of my own picks and entries I don't mind getting into the nitty gritty of what I am really doing...so here it goes...

I went through some back testing of the two trades that I am in right now and found how the particular stocks seem to work with respect to my indicators...more on those another time.

Badger Meter Inc. (BMI)

This stock moves well and has a nice pattern of observing various support and resistance levels far more often than breaking them. Volume levels are clean and well delineated and the price ranges often enough to produce a good number of trading opportunities. It's a keeper in my arsenal of stocks to trade.

There have been 26 trade setups in the last 12 months. 8 did not meet the entry target, 2 were losers (less than $2 ps) and the rest were up $55.50 ps.

I bought it on Friday at $38.50 based on a signal, but not mine. It was a buy under $40 but I had it down as a buy under $38. $38.50 is not too far off and the price entry has some reasonable trend support so I will play it out. The up target is $44.00.

Lincare Holdings (LNCR)

LNCR is the other longer term trade, it is a short placed on June 30th at $23.30. This one is a slow mover and I would not have traded it had I realized that it would tie up capital for so long to make it's moves. I did not do all of the back testing that I would normally plan as I doubt that I will continue tracking it. It does trade decent volume and I wouldn't mind so much holding it as a long position but it is in a serious long term downtrend right now....has been for almost three years and it has only moved $15 overall with a large drop of $12 in 2007 that took 6 months to finish.

Wider stops, more patience...I should check to see if I am going to get hit with a dividend payout soon.

The down target is somewhere just south of $20 and I will cover this trade rather than letting it go much farther.

That's it for active trades and I have nothing else tested yet. This is where the patience comes in. I will not just enter a trade until I have done the one year back test and determined that the stock is a good candidate. I plan on having a number of stocks, perhaps forty, to choose from at any given time. They will all have pre-set entry targets and use rule based following stops.

I estimate that I can choose a stock in a few minutes after doing a scan for my criteria. It should take about an hour to do a back test so I may only end up with a few per week to add to my list.

At some point in the future I will set these up with a semi automatic trigger program but I need to see some returns to justify the necessary time investment involved in writing that kind of software.

Jeff.