| DocRich |
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Gold User, Member, TeleChart
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| Registered User |
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| Unsure |
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| Saturday, December 18, 2004 |
| Wednesday, January 14, 2009 9:53:26 PM |
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I read Sir Welcome Back's report in yesterday's Worden Note with interest because I also started paper trading Sir 9-Periods system to test it prospectively. My notes aren't nearly as detailed as Sir Welcome Back's but I can report nearly identical (a little lower, nearer 4%) results for the same time period Sir Welcome used, when I adhered to Sir 9-Periods rules.
I planned (plan) to use this system, if it checked out, in one of my roll-over IRA accounts so the accounting will be easier for me each tax season.That particular account is of a limited size so in my test I would set up to buy only up to 10 stocks (or less if the scan generated less candidates) each day. I wanted to trade it like I was going to do in the future. Using the 2% MOS for the limit order, I would often buy fewer than 10 stocks. It took me quite a while to build up the portfolio to 100 stocks, and the returns were volatile and initially pretty bad. By sale day however (Day 10 and often Day 19) I had more winners than losers.
2 things I noticed in retrospect, the first being no real surprise: Comparing my selected stocks' overall returns to the returns of the total list the 9-Periods scan returned over that period, the bigger (original) list had a better returns. Some of the stocks I chose using my own chart reading, and with the goal to diversify and also to not rebuy the same stock later in the period, did worse overall. I missed a few "big" winners too.
The second observation I made is that the original 18 watchlists I had compiled since March 10th (2 sets of 9 periods) consolidated into one just to watch, (composed of 100 stocks, coincidently) currently shows 83 gainers, 17 losers, for an annualized gain of 82.04% as of April 16th close. Many of those stocks would have been sold on day 10 or day 19 and maybe the gain would have been missed. That point is why I like Sir Welcome Back's modification about a trailing stop loss. I'm going to papertrade his other two ideas (using an EasyScan to generate the list to scan using Sir 9-Period's Percent True scan, and then cherry-picking the results using LR) to see if the returns improve.
As a final note, I should mention that I've been using the platform at www.foliofn.com to trade this method with real money. For those of us without huge accounts you can buy very small quantities of stocks and the fee to make a purchase using a limit order is only $3. If you're willing to sell at the market using a window trade (10 am or 3pm) you pay no additional fee over your annual fee. It's been working very well for me.
Rich
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I hope Don Worden is well. Everyone around here in CT has the flu, it seems!
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Hi Sam,
Thank you again. I've think I've "got it" (finally). You are so generous with your time, knowledge and experience. The next time I'm in Italy I'll have to take you and your wife to dinner (or two) to show my appreciation. I'll try not to pick your brain too much over the meal! Ha ha...
Rich
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Bill,
The 59 S&P Stocks found using the 9 Periods scan were from last Friday's close. The results change everyday. I'm wondering if your results are based on yesterday's closing prices or some other time period (actually, if I recall, yesterday there were way more than 59 stocks found... so I'm not sure what you did to get only 22.)
For a pretty deep discussion of Sir 9 Periods system, use the following link. Sir 9 Periods himself weighed in.
Rich
Here's the link:
Trying to understand syntax of today's Worden Report
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Hi Sam,
Thank you for all the information and the time you spent answering mine and everyone's questions this weekend about your trading system. I was hoping you could answer a few more, if you don't mind (I apologize ahead of time if I'm just being dense here, with all you've clarified above...)
For perspective and comparison with other systems,
1.) What potential overall average % return (or range of return) have you achieved each year over the many years you've traded with this system?
2.) Considering your overall trading portfolio size, what % do you put on each specific trade?
3.) About how many trades do you try to make each week using this system? Does your position sizing correlate with your trading frequency?
4.) Have you found this system to generate better returns in a rising or falling market, or best with a more volatile market (as I'd think it would)? I realize you just use it consistently regardless of the market trend, based on your previous responses.
5.) Finally, to help me understand your selling rules, am I correct to say that you sell any stock you bought on either the 10th market day of ownership, or the 19th? And on the 19th market day of ownership you either have a profit or you don't, but you sell by then regardless?
Thank you again, very much.
Rich
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You're both right. Thanks!
So maybe set up an EasyScan to quickly look at all 9 or 10 watchlists that the 9-day system helps make to highlight those stocks, to further automate the selection process?... need to think some more about this.
It seems that good cash management, in choosing position sizes, is vital for this system to work consistently also. But what's new about that when it comes to successful trading?
Rich
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The edited note republished today, Saturday, does help clarify some of the confusion. I'm sure the rush to meet the publishing deadline caused the typo(s) oversight.
Also, my curt note was not to disrespect Sir 9-Day Period's generosity. I woke up too early today, then was frustrated trying to make his system work. Thank you Sir 9-Day Periods.
So for my fellow "newbies" to Telechart customization, here's what I think works. Tell me if I'm off the mark.
First, make a new watchlist of the stocks you'll want to scan using this system. I named mine "9 Day Periods Master List" and then just copied the 500 SP500 stocks to it for starters.
Press F9 key to open a 9-day chart template.
Next, open the Chart Template Editor by pressing the letter "I" on the keyboard. Following the instructions, click the "+ sign" next to the "Middle" title, and choose Percent True. Enter in the formula window this line exactly: C<C1 and C1<C2 and C2>C3. It's a Boolean formula so type "and" and not +, etc. I wasn't sure what to choose for smoothing so sticking with the theme I selected 9, and then Simple, then Save.
Now using the new watchlist you just made with the SP500 stocks or whatever stocks, ETFs you want to scan, use the pick list under the watchlist name to scan by Indicator Sorts", which is the last category of sorts at the bottom of the list that pops up. Under "Middle", you should see the %true C<C1 and C1<C2 and C2>C3 line you had just entered in the Chart Template Editor. Choose that and scan.
Your list should then be sorted with all those stocks 100% true coming to the top of your watchlist, followed below by the stocks not making the cut (and therefore not 100% true). You'll see the percentages listed to the right of the stock's name. Flag all the stocks that are 100% true, and copy them to yet another new watchlist with the sort date included in the title. These are the stocks that closed at least 2% below their previous 9 day period close. Do this everyday and you'll end up with 9 watchlists you're constantly watching, after you delete the oldest when you add the most recent daily list of the sorted stocks. Some of those stocks will be trending higher and I suspect those are the ones Sir 9-Day watches closest to buy.
His Sell intructions are pretty clear, I think, although I'm not sure why I need to sell immediately if the stock opens above my purchase price. Couldn't I use a stop loss and/or other criteria to decide when to sell, in case I found a winner that wants to run?
Hope this helps, and I hope I interpreted the instructions correctly.
Rich
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The CC3 is repeated several places in the Worden note, so if it's a typo it's pretty bad that it wasn't caught by someone proofreading it. I also would like to see a simple, step-by-step, explanation. I thought it would be a PCF too, but the author talks about using the Chart Template Editor.
Thank you to anyone who can simplify how to set it up.
Rich
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