I hope nobody bought GDT as a B/B trade last week. Of course if you bought this morning it's not too bad. Fortunatly I did. To quote Joe, yehaaaa.

Gary

It's starting to look like I'm still to early on GOOG.

In fact I did buy it. Today was day 4 for the trade. It has wiped out all the BB profits and more unless it has a good 11 days.
h

Howard,
I looked at Jim's shorting system and made one tweak, I only take signals when the stock is under the 200 DMA. It seemed like a good idea for protecting against a big decline. As you might guess the system has been performing very well the last couple of days. It also has done good for me when the market was rising. So far it has only had 3 losses in 74 trades. 2 of those were trades that were above the 200 DMA that I took before it occured to me to only take trades that were already in a down trend. Might be something you could use to compliment the B/B system. Just a thought. Of course if your using the COT then you probably covered your losses with gains from the COT

Gary

Yeah, the COT did make up for the loss but I would have rathered been a winner in my COT money and neurtal in the other accounts. Jim,
Could you give me that shorting system again?
h

Howard,
The rules are:
Stock must first close above the upper bollinger band (10,1.9).
No more than 10 days must have past since the close above the upper BB.
Once the first two conditions have been met short the stock on any close under the 10 DMA.
Cover on any close that is profitable.
Maximum time held 15 days.
I like to place the short at the close because I've found a few of these trades gap down the next day, but I think you could do just as well placing the trade the next morning.
The solid black candlestick/gap up strategy has been working really good for me also. It doesn't occur very often though.

Gary,
I don't know why I didn't think of only taking trades that were under the 200 DMA, it makes sense. I'm just getting all kinds of new ideas from this forum

Jim

Here's another momentum strategy idea for anyone who's interested.
Buy the on the open after any close where the stock gaps up and shows a hollow white candlestick on above average volume. Sell on any close that's profitable. Max 15 days.

Jim

I have been looking over all of the Bollinger Band trades that Larry has posted and the extra trades that I have taken that were losers. One factor that occurs in quite a few of these losing trades is heavy volume (double or more than average daily volume) on the day that the stock closes below the lower Bollinger Band. By passing on B/B trades that have heavy volume BSX, LEG, CTXS, ATYT, MCD would have been avoided. I realize that ATYT & MCD haven't closed yet but the odds don't look good for winning trades in either one. CEPH, BSX, SBL, BIIB, ATYT and MCD were under the 200 DMA so trending down. I'm thinking by adding these 2 filters it might be possible to cut down a few of the losing trades with the B/B system.

Jim

Jim,
how many winning trades would you have missed with those two filters on the bb?
h

Howard,
I just finished testing the first 100 stocks in the S&P for the last 6 months.
Here are my results.
155 trades, 146 winners, 9 losers 94.1% profitable.

You will miss a few trades but it appears that you would still have more than enough to choose from.

Here is something interesting that I stumbled upon while running the test. Let the trade go until it either closes above the 10 DMA or if the 10 DMA declines below the first profitable close then wait for a close anywhere above the first winning signal and above the 10 DMA. Max 15 days.
Results:
155 trades, 132 profitable, 23 losers, 85% profitable.
You will end up losing a few more trades but the winning trades are so much bigger than the normal B/B winning trades it appears that it will be much more profitable to take a few more losses to achieve the bigger wins. Same filters apply for this strategy.

Jim

I forgot to take into account that there will be very few 1 day trades with the second strategy. I wonder if that would negate the larger wins over time.

Jim

I think that's a concern with any bb strategy. I don't know if there is a way to model it but we ought to assume some minimum acct size and minimum trade size so we have a fixed number of trades and then take the ones listed. We would be missing some.
h

Howard,
I suspect that when the market sells off (like the last 2 days) your going to get so many trades that you couldn't take them all anyway. Might as well improve your odds and only take the trades that have the best chance of being a winner.

I'm going to test the second 100 stocks in the S&P tonight and I'll see what the average holding period is for the second strategy. If its only 4-5 days I think it would be worth holding for the larger wins. Another bonus is fewer transaction fees.

Jim

Here's the results from the second set of stocks in the S&P.
Standard rules using the 2 filters:
151 trades, 140 winners, 11 losers, 92.7% profitable.

Second strategy, letting the trade run until it closes above the 10 DMA.
151 trades, 126 winners, 25 losers, 83.4% profitable.
Average holding period for this strategy 4.5 days.

Jim

Go GDT!!!

Gary

Gary,
It would have to Go like the everready bunny for me to not lose any money.
h

So far the bunny is going strong.

Gary