All,
Thought I would put up a trading system for all of you to try out on paper (or computer simulation). It is an old system I use to follow and I did quite well out of it. The basis of it is keeping things simple and keeping out of trouble.
The entry rules are :
1) Todays high is higher than yesterdays high
2) Todays high is higher than the high 1 month ago.
3) Todays high is higher than the high 3 months ago.
3) Todays high is higher than the high 6 months ago.
The exit rules are :
1) If the stock drops below the previous 1 month low. ( This can be set closer such as just below the previous level of support ).
This can get you in some good stocks for a long time.
Good Points of the System :
1) Gets you into Up trending stocks and you can make large gains
2) Simple rules
3) Low brokerage costs
Negative Points of the System :
1) No Adrenaline. Not many trades are thrown during the year and once you are in them you are usually there for quite some time.
2) You can have a series of small losses which is irritating
3) You can go long periods with no trades ( espeically in a declining market ).
The whole idea of this system is to catch the stock that goes up for years. You make 2 or 3 trades of 100% - 500% and 10 trades of negative 2-3%.
Have Fun
