We finally got a pullback, and it has resulted in plenty-o-dips to buy for Monday: 77 to be exact.
If you have not yet taken a trial membership of the Power Dip System, now would be a great time to do it, as you will have many setups to pick from for next week.
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Dear Wood:
why do you think its a good news to have more than 70 setups? do you actually think the method is investable under these conditions?!
Regards
The system was backtested using the same ranking system that the PDS site uses. Therefore, it matters not if there is one pick or 77. If you are trading it like a system, you take the top picks and move on with your life.
All 77 picks have an edge. You can certainly follow along with the sidebar updates as all 77 are eventually closed. Monitor the average % gain and the winning %.
I don’t recall saying it is “good news” though, although it is certainly a pleasure to look at dozens of really nice pullbacks, so it is not bad news either. The system will respond to the market. When the market pulls back, it generates more picks.
When you say that “you take the top picks and move on with your life”, how do you choose the top picks out of the 77? I think that jt brings up a valid point, 77 system generated picks are way too many and the system is not investable with that many. If the backtesting was based on 50-100 simultaneous trades, then the whole system is questionable because of it being so cumbersome to trade.
Dave, all picks are ranked. Of 77 picks, they will all be ranked, from 1 to 77.
In backtesting, the system takes the top picks. For example, if we are using 10 maximum positions (that would be 1% risk with a 10% stop, would equal 10 positions at 10K each assuming a 100K account) and lets say we have 5 stocks already in the portfolio, and then there are 77 candidates, the system will take the top 5, giving it now 10 positions.
On the next day, it sells 3 positions (leaving cash for three more positions). It would then take the next top 3 stocks, no matter how many candidates there are.
You can backtest this any way you want. I have backtested it taking every single trade. That would mean on days when there are 77, you take all of them. All that does is lower the average trade slightly as we do not expect the lower ranked stocks to perform as well as the higher ranked ones. However, the win % does not change, even when taking all the trades.
Why would you take all of them? You wouldn’t. You would take the highest ranked stocks.
Here is the key: All of the picks have an edge. Every single one of them. The higher ranked stocks will move more than the lower ranked ones.
Last night there were 15 picks. Tonight there were 15 picks. If you just started trading the system, then maybe you took the top 5 last night, and the top 5 tonight, giving you a full portfolio (assuming none have already been sold).
This is all covered on the PDS site.
Ah! That explains it. Thanks for the clarification.