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One
of the best ways to gain confidence that you have a winning strategy in
your stock market trading is to back test your strategy. But first, you
must have a trading system.
What is a Trading System?
A
trading system is a systematic way of trading equities. It is composed
of a set of rules in all aspects of trading. It answers the questions:
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What stocks to trade?
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When to buy a stock (entry)?
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When to sell a winning position (exit)?
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When to sell a losing position (stop)?
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How much to buy (position sizing)?
Rationale
Remember the last time you should have cut loss when the prices are
still high? Or the time when you took profit too early? We all have
regrets in the way we trade, and worse, it affects the way we do our
subsequent trades.
If
you follow a set of rules, you eliminate or minimize emotional bias. You
also gain confidence that you have a long term winning strategy through
backtesting.
Backtesting
Backtesting is simulating your rules with historical price data. It
doesn't guarantee future returns, but it gives you an idea what kind of
returns to expect had you followed a particular set of rules in the
past.
Everybody makes money in a bull market, but once the market switches
from a bull to a sideways or a bear market, what happens then? A good
trading system can withstand all kinds of markets: a bull market, a
sideways market and a bear market.
Services
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Building a trading system
A trading system is a
personal thing. The rules you set has to fit you. Everybody has their
own risk tolerance. Everybody has their own idea on how long they want
to hold their positions. It all depends on you. As the saying goes: "To
each his own".
Tell me your set of rules.
As long as you can answer the 5 questions above, I can work with your
trading system. Here’s what I can do for you:
Together, we can refine
your trading system and determine the right technical indicators.
Back test your rules and
determine your batting average, win-loss ratio, and frequency of trades.
Optimize your technical
indicator parameters to maximize returns.
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Tweaking Metastock
If you have Metastock, but
don’t know how to create your own indicators and explorations, I can
also help you build these.
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Signal Alerts
After trading hours, I can
email you what stocks triggered a buy or sell signal based on your
trading system or custom indicator. You will no longer miss a move.
Or if you’re interested in
receiving a report based on your own specification, I can build these
reports and email them to you regularly. As long as all the information
in the report will come from the historical price data and technical
indicators, it can be done.
Contact Information
If you’re interested in
availing the any of the above services or for any inquiries, you may
contact Jun Ignacio at
dmignacio@yahoo.com
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