Friday Wrap Up

This was a horrible whipsaw day and both Zeros performed brilliantly:

Nice clean short signals on the Primary Zero (with a temporary false negative to the upside which disappeared quickly). The Lite was simply brilliant, note how 90% of its time was spent below the zero mark – the two swings up could have gotten us out but we dove right back down and there was probably very little damage done. I’d give both a straight A today – especially in this kind of tape where everyone was confused (judging by postings and comments on other blogs and comments right here as well).

Alright, before I leave you guys for the weekend I have a special little treat to share with you rats:

This is a 12 months profit graph of that directed trading program I have been teasing you guys about lately – it goes from March 15, 2008 until the close today. Note especially how well it did during Gravestone Snooze December, Nightmare Flip Flop January, Bear Season February, and finally Monster Whipsaw March. It’s like the fucking Energizer Bunny – it just keeps on going and going and going:

Obvious from the graph is that this strategy loves volatility and eats it for breakfast. However, it also does very well under low volatility (i.e. VIX below 30) but although we might see that in the coming months for a brief moment I’m confident that we’ll remain above the 30 line for a majority of the time for the next two years.

Max draw down on this strategy is a whopping 5.1%, which is ridiculously low. Had you traded one single ES contract the net profit on this strategy would have been $41k – not bad at all considering that it’s only in the market very briefly every other day or so and closes out every evening. So, there’s no worrying about holding overnight.

More details will follow but for now I’m busy implementing the email alert system, which requires a lot of hackery on my end to make work properly. If things get too hairy I might do this manually for the next month or so. Sometime this weekend I will put up a page with all the statistics, graphs, charts, etc. – anything you need know.

I’m also talking to the people over at ThinkOrSwim to get us evil rats specially discounted futures commissions, futures trading profile for NQ/ES, video tutorials, and a special session with Tom Sosnoff (I hope he says yes). As you know I’m a big fan of TOS and use them to trade the ES and NQ futures all the time. BTW, for the record, you don’t have to execute through TOS to participate – just want to make sure that’s clear.

The way this will work is that you guys will receive an email alert the second an order is supposed to be taken. A delay of a few minutes really doesn’t matter as this thing runs on an hourly chart – so, it’s not exactly a daytrading system. It just happens to perform a lot better if you close out your trades every day at 4:00pm EDT.

There is a stop as well and it’s about 46 ticks away – the system can be traded with a tighter stop but again over time the stop I selected produces maximum profits. Actually using no stop at all is even more profitable: $42k in the past 12 months and only 7% max draw down. BTW, that’s not 7% of your capital – the way NinjaTrader calculates it is on the value of the contract – kind of weird. But I think the visual graph shows it nicely.

I hope that wets your appetite a little bit – more details to follow. This is going to be FAT – like in fat profits! 🙂

Enjoy your weekend evil rats!

Mole