March 24, 2008
AES Short — Another Big Win for the Box
I’ve finished compiling the charts for the annotated chart book for December, January, and the early trades in February. Once I finish writing the notes to all the charts, I’ll be ready to distribute it for free to current and prospective subscribers. I’ve only included charts for the “with the trend” trades, and beginning in April will no longer even mention the countertrend setups. Reviewing the numbers for February, and looking at how badly the countertrend setups have performed in March, I’ve decided to drop them altogether.
I will include the original spreadsheets for all trades, “with the trend” and countertrend, for December through March in the annotated chart book. Starting in April, I will no longer record the countertrend trades in the spreadsheet to save my time and energy.
Subscribers have had a crummy month in March. So far this month, out of 56 ideas only 19 have been with the trend. We’re down 3 or 4 R on these “with the trend” trades on the month following the ABC Stop Method, which is nothing to write home about. Nevertheless, I think subscribers appreciate having decent ideas and a solid framework for short-term trading. This has been a tough market to release a swing trading newsletter into, and I think everyone understands that. You can review the spreadsheet for all trades in March here.
I’ve been thinking hard about this stop trailing business and have decided on handling it in three different ways:
- Plan A - Keep the Initial Protective Stop in place until the Target Zone is hit and then start trailing;
- Plan B - Move the Initial Protective Stop to Breakeven once the 1x Initial Risk Level is closed beyond, then don’t trail the stop until the Target Zone is hit;
- Plan C - Move the Initial Protective Stop to Breakeven once the 1x Initial Risk Level is closed beyond, then begin trailing the stop once the 2x Initial Risk Level is hit (this is the old ABC Stop Method).
Here’s the original setup in AES with all the key levels.
Here’s the annotated chart. The solid red line is the Initial Protective Stop level. The solid blue line is the Entry level. The dotted black line is the 1x Initial Risk level. The dashed black line is the 2x Initial Risk level. The lime green box is the Target Zone. All the charts in the chart book look like this. Following Plan A or Plan B or Plan C in this one wouldn’t have made a difference — you’d be sitting on a solid 3R gain.
March 25th, 2008 at 4:16 am
What is the R for trades in Feb?
March 25th, 2008 at 6:14 am
hp: Depends on if you followed Plan A, Plan B, or Plan C. When you get the annotated chart book, you can study all the “with the trend” trades and calculate the R depending on how you would have managed the exit.
March 25th, 2008 at 10:13 am
Why do you say it is a tough market? Isn’t swing trading suited for choppy and volatile markets?
March 25th, 2008 at 10:54 am
hp: Chop is never nice … the Box works best when it enters a trade on a “retracement” within a trend, e.g. AES, XOM, TGT, UAUA, FXY, TLT, etc.
I’d be very interested to see the results for the Gorillas and other swing trading services for March, but of course they’re not transparent like I am (which explains why they presumably have hundreds of subscribers and I have a few dozen, lol).
March 25th, 2008 at 12:00 pm
Your service would be even more transparent if you could give more information on how the Box works. From reading the posts, I only gather the following:
- it generates trades for swing trading
- it is software
- you don’t know how it works
March 25th, 2008 at 12:36 pm
hp: I have a good idea how it works but I don’t know *exactly* how it works. I’m unwilling to reveal what I do know, but any reasonably intelligent observer can figure out what it’s generally up to by studying the charts of the ideas the Box generates.
March 26th, 2008 at 12:43 am
CM said:
“I’m unwilling to reveal what I do know …”
It’s interesting to me that I often find myself in the same boat. But unlike The Chairman, it’s not due to my safeguarding proprietary information. :)