Author Topic: A simple yet effective Trending System  (Read 1542 times)

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pns01

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A simple yet effective Trending System
« on: June 12, 2005, 10:25:00 AM »
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