Please criticize my Stock swing strategy

This is a discussion on Please criticize my Stock swing strategy within the Swing & Position Trading forums, part of the Methods category; Originally Posted by ducati998 You are essentially trading a pairs strategy, without any implicit or explicit correlations. It is the ...

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Old Jun 25, 2013, 10:56pm   #9
Joined Oct 2012
Re: Please criticize my Stock swing strategy

Quote:
Originally Posted by ducati998 View Post
You are essentially trading a pairs strategy, without any implicit or explicit correlations. It is the correlations that provide the 'edge' in a pairs strategy. Usually a pairs strategy requires a longer time frame than 1 week, although you can scalp them on a day trader basis.

Some examples of pairs used: TGT/WMT, GLD/GDX, SLV/SIL, XOM/GLD. I have traded these pairs many times in the past and they are reasonably robust. The tricky part is deciding on the correct time frame in which to place the trade.

jog on
duc
Until we know more about the stock selection, we can't say whether it's a stat-arb or long/short approach.

I would be surpised if he's pairs trading, given that he mentions MACD etc. I'd be equally surprised if it's some sort of long/short strategy, given there's no mention of industry, company outlook, etc.

My hunch is that he's going long on "bullish technicals" and short on "bearish technicals" and just churning his account as a consequence.

So, room for improvement!
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Old Jun 25, 2013, 11:19pm   #10
 
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Re: Please criticize my Stock swing strategy

unid started this thread Let me read and digest the various responses, do some home work and formulate questions to ask to help you to help me efficiently. Meanwhile, few pointers, they are not bragging rights, but part of holes in cheese.
I am good at Excel, but I am not using it that much.
I am not using any Software/system other than those free sites mentioned.
This is the first time I read about 'pair's strategy'.
My initial strategy was to start somewhere and not to loose lots of money, now it seems like I may have to take a brake to understand the connection between forest and trees.
If I do not respond to particular questions, than I am not ignoring you, but I am learning to respond.
Again, thanks for your support.
Unid
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Old Jun 25, 2013, 11:23pm   #11
 
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Re: Please criticize my Stock swing strategy

unid started this thread
Quote:
Originally Posted by Hakuna Matata View Post
Until we know more about the stock selection, we can't say whether it's a stat-arb or long/short approach.

I would be surpised if he's pairs trading, given that he mentions MACD etc. I'd be equally surprised if it's some sort of long/short strategy, given there's no mention of industry, company outlook, etc.

My hunch is that he's going long on "bullish technicals" and short on "bearish technicals" and just churning his account as a consequence.

So, room for improvement!
You are absolutely right about analysis/breakdown of my thought process and actions.
Thanks you.
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Old Jun 25, 2013, 11:28pm   #12
 
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Re: Please criticize my Stock swing strategy

unid started this thread I am not using any paid system/sites etc., because at this time I do not know enough to select the right system. I see the paid system as a 'tool' to improve the efficiency but it will not teach me anything. At the same time, I have not used any paid software/system to say much about it though.
Thanks
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Old Jun 25, 2013, 11:31pm   #13
 
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Re: Please criticize my Stock swing strategy

unid started this thread
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Originally Posted by Shakone View Post
Well I suppose...if you call this an entry


May as well just say, I use a chart, a broker and a computer to decide to go long or short.
Yes. You are correct.
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Old Jun 26, 2013, 12:35am   #14
 
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Re: Please criticize my Stock swing strategy

Perhaps go into a bit more detail about what you are doing, and why it is failing. For instance, what do you mean when you say 'something is wrong'? Everyone has losses or trades that are losing for some time. The more detail you give, the better the feedback (hopefully )
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Old Jun 26, 2013, 5:54am   #15
 
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Re: Please criticize my Stock swing strategy

Quote:
Originally Posted by Hakuna Matata View Post
Until we know more about the stock selection, we can't say whether it's a stat-arb or long/short approach.

I would be surpised if he's pairs trading, given that he mentions MACD etc. I'd be equally surprised if it's some sort of long/short strategy, given there's no mention of industry, company outlook, etc.

My hunch is that he's going long on "bullish technicals" and short on "bearish technicals" and just churning his account as a consequence.

So, room for improvement!
Clearly he is not trading a 'pairs' strategy. Just as clearly he is not trading any form of arb, and just as clearly that is what I said.

What he is doing is, intuitively, he is trying to create a market neutral strategy. While a pairs strategy is not market neutral, it is a step in the right direction. As a trader of market neutral strategies, it stands out quite clearly to me as being such.

True market neutral strategies are about as close to the holy grail as one is likely to get, so I commend his insight or intuition.

jog on
duc
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Old Jun 26, 2013, 2:20pm   #16
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Re: Please criticize my Stock swing strategy

Hi Unid,
I know you've been a T2W member for a while - but you've not posted much - so welcome to the dragons den!

I'm loathed to direct anyone away from T2W but, just occasionally, there are threads on other forums on specific topics that are covered in greater detail than they are here. If you decide to research pair trading further, then this thread on Elite Trader might be of interest: Pair Trading Strategy Journal

Contributors to the thread make repeated reference to this piece of software: Pairtrade Finder It's a while since I looked into this in any depth but, from memory, I found the trial software difficult to use and the alternatives were either pretty poor or very expensive. But don't let that put you off; those that know more about this topic than me may say it's possible to get by without using any expensive software.

Lastly, if you want a book on the subject, although I've not read it myself, this one is frequently recommended by those who have: Pairs Trading: Quantitative Methods and Analysis by Ganapathy Vidyamurthy. (Perhaps ducati998 or one of the other subscribers to the thread can comment on it?)
Tim.
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