Another big day for the mechanical system. Honestly, I’m looking at these returns, and I’m asking myself why I’m not trading it yet. This thing is just killing it. Amidst all the failures of indicators and oscillators, this system seems to be getting even better.
[[QID]] closed with an RSI2 of 75.34Â and [[SDS]] with an RSI2 of 74.27.
Without a doubt, had I not sold my QID this morning, (at $68.81, which is 6 pennies of slippage from the listed open) and were I actually trading this, I would be selling tomorrow. Look at these last two trades, marked-to-market at today’s closing price (highlighted in yellow). The total P/L is now ~13K, which equals a 26.15% return, in just six trades. The system has never had more than $550.00 at risk on any trade, and has been at least 40% in cash since inception. Keeping 1% risk per trade, the system could now theoretically hit 10 losers in a row, and still be up ~$8K, or 16%.
I am amazed.
Despite all this, despite the success, there is still the desire to override it. And that is why profitable systems can still be traded unprofitably.
SDS and QID will be left open tomorrow and will not be closed until the exit criteria is met.
No New Entry Signals for Tomorrow.
Wood, wow! Very nice first six trades. As you know, every system goes through drawdowns. It will be interesting to see at what point this one does and the extent of the DD.
Ducati will take exceptions, no doubt.
Had a $5 trailing stop, got hit around $72, should have been looser, but it was a worthwhile trade. So far, so good. Excited to see what is next.
Alpha, I’m almost begging for the drawdown. I wanted to wait until it hit one to really start trading it.
Backtested drawdown has been extremely low at less than 8%.
We’ll see!
B-rad, consider an ATR based stop. Glad it worked for you!
hi woody,
any idea about trading this with options. any stastics
you can share with us.how does it perform when there is low volatality.
can you post some of the trades this system has generated.
thanks
Bill, no testing has been done with options. I can’t help you there.
Look in the category *Big Bamboo for the previous posts I’ve done. I published many stats, including the equity curve going back 2 years. When volatility was lower, for example in 2007, it did not perform as well, but that may just be coincidence. It started rocketing at the end of 07.
I have posted the last six trades. I will continue to post all future trades. Are you looking for more data?
Shed, start trading your system in small amounts or I will pay someone on craigslist in your area to leave a small bag of shit on your front doorstep.
Extremely impressive results. Bravo, spring break, and hells motherfuckin yes.
I know Danny, I know. I’m going to, soon.
As long as it will be small, I’ll probably just get a kick out of it!
You know I read every single one of your posts. Longtime fan of the iBC machine here.
PPT looks to be very active in the overnight futures market.
Somebody musta woke up Pinky and Binky and told them, “Get to work!” Buy Buy Buy!
Bill:
I’ve been playing along with some calls and the results are just as impressive. I’ve made quite a bit of fake money.
However, the option volume & spreads have to be looked at before entering any of the trades. You (and I) may not enter the same (2) trades that Woodshedder takes.
For example, the last time the system generated multiple buy signals – Wood took QID & SDS. However, I played along with DXD and SRS instead, which had the highest option volume and liquidity on the list.
I’ve yet to actually trade this for real…but I’m pretty sure that as soon as I do, the system will post its first loss.
Looks like QID is up another 20% pre-market! Wow, this system has been impressive.
I am also trading Options along with this system.
As far as exiting with RSI2, what are the settings you’re using?
Thanks.
DPeezy, keep up updated on how that goes. We’ve been talking about it, but never have really tried the option route.
Hillary, I’m honored to have you bless my blog. No really though, I don’t think QID is up pre-market. RSI(2) is the only setting I use. I have written extensively about RSI2 all over the blog, and have outlined the rules for this system in the Category of *Big Bamboo.
Hey Wood, that’s great that this system has been working so well. Very impressive. Do you ever raise the 4% stop? Just wondering if you’ve toyed with testing that out at all. I’d guess that it’d shake the system out more often than it’d help.
For options, I’ve looked at the Ultra options and they are too thin and the spread is too wide for my tastes. However, since (I’m assuming) the reason to use the Ultras is for leverage, why not play options on the non-Ultra ETFs instead? IE, if the system triggers QLD, buy QQQQ calls. If the system trips QID, buy QQQQ puts. They volume and spreads are much better. It would be interesting to see that in action during a drawdown.
Great stuff Woodshedder!
Ichabod, check the archives/category for *Big Bamboo. I’ve published statistics for how the system performs at varying stop levels.
We’ve considered the regular options for the non-leveraged ETFs. That’s a great idea. The only problem I see with it is in terms of setting stops. I’m open to suggestions.
Hey Shed
I think Mrs Clinton is wondering, as I am, what time frame(s) does Bamboo Grande use w/ the RSI(dos)?
thanks in advance
Hmmm. Gwar, you must mean like daily or weekly time frames? I only have tested it on the daily time frame. Let me know if you are asking something else.
It is a good short-term overbought / oversold indicator.
one day & RSI 2 is exaclty what i wanted to hear
thanks