Market Club Trade Triangle Simulation - Dell - August 2010

In the article below I'll go into a brief, simplistic Market Club Trade Triangle simulation I ran using the stock for DELL recently, in August, 2010.

To keep things as simple as possible in this example, I have used minimal trading rules. In fact, Market Club's Trade Triangle technology provides functionality for 3 separate Trade Triangle signals including: Monthly, Weekly and Daily.

You'll see in my example below that I am only using the Weekly signals here. Keep in mind that this was a test only. In reality, starting with a simple test as below may be fine, but I personally would do further testing such as on different time periods, different stocks and combining other signals or indicators before coming up with a suitable system to follow. (That doesn't mean I'd rule out the system below, but I would do further testing)

That being said, the simple rules I used below did produce nice results, look promising and worthy of taking a further look.

The chart I used is of DELL. It's a daily Candlestick chart going back to mid-March, 2009 (although the daily Candlesticks going back this far get squeezed together and are not very useful for any type of Candlestick pattern recognition here).

In the trade data below, I began taking trades in August/September, 2009, so I ignored the first few Trade Triangle signals shown on the chart. Not for any specific reason, only to see the results beginning trading just prior to the big downtrend shown, knowing that the first trade would likely/possibly skew typical results due to the big win.

I said "knowing", because we can see the chart history now as we look back, but in reality and in real-time, we would not have known the big drop was coming.

For those readers who may say this would be un-realistic by including the first big winner, and for myself to test out different scenarios, I've shown the results with and without the first trade calculated in the total return.

On the chart image below, you'll see the green and red triangles. These are the Trade Triangles that get generated automatically by Market Club as it scans the stocks behind the scenes.

As I mentioned above, the first signal I used in this example is labeled "Trade #1" in the end of August/early September, 2009 which is Red.

For Red Trade Triangles, I am selling any long positions that may be open, and at the same time opening a new Short position. When a green Trade Triangle appears, I am covering any open Short position and opening a new Long position. All positions are using $10,000 for each and no commissions are calculated.

Again, for simplicity, these are the only rules used in this example. All positions are opened and closed when new Trade Triangles are triggered. This takes a lot of the emotion out of this trading example.

Market Club Trade Triangle simulation Dell

Here are the results:

Price/Alert Action Profit/Loss$/Share Profit/Loss% Net Profit/Loss$
$24.27 Short - - -
$11.27 Cover/Long +$13.00 +115% +$11,500
$10.57 Sell/Short -$0.70 -6% -$600
$9.20 Cover/Long +$1.37 +14.89% +$1,489
$12.74 Sell/Short +$3.54 +38.48% +$3,848
$13.88 Cover/Long -$1.14 -8% -$800
$15.26 Sell/Short +$1.38 +10% +$1,000
$15.72 Cover/Long -$0.46 -3% -$300
$14.21 Sell/Short -$1.51 -9.6% -$960
$14.28 Cover/Long -$0.07 -0.5% -$50
$14.24 Sell/Short -$0.04 -0.3% -$30
$14.10 Cover/Long +$0.14 +1% +$100
$15.61 Sell/Short +$1.51 +10.71% +$1,071
$13.96 Cover/Long +$1.65 +11.82% +$1,182
$12.42 Sell/Short -$1.54 -11.03% -$1,103
$13.86 Cover/Long -$1.44 -10.39% -$1,039
$12.87 Sell/Short -$0.99 -7.14% -$714
Open Position +$

The Total Net of all of the above trades equals $14,594 profit, or +145.94% return on initial $10,000 investment in one years time.

Excluding the first "big winning trade" of +$11,500 equals $3,094 profit, or +30.94% return on initial $10,000 investment in one years time.

Remember that this included 17 trades over the time period shown, simple trading rules, almost zero emotional invlovement and still has an open trade that is a winner so far for more profits. At first glance, it appears that these weekly signals with Dell may be worthwhile to catch moves in a trending market.

You can use Market Club for 30 days during their trial period to see if it's right for you and try to come up with your own trading system. One of the biggest benefits of using Market Club is the possibility to eliminate some of the emotions out of your trading.

More than just a charting service, only MarketClub gives you everything you need to trade with greater confidence -- including online chart portfolios... stock scans... online video tutorials... special reports... downloadable price data... custom trading alerts... and much more.

But don't take my word for it. Use MarketClub's Trade Triangle and other online tools for traders risk-free for a full month - and see the difference our service can make in your trading!

For a free online tour of MarketClub... or to arrange a risk-FREE 30-day test drive... visit Market Club Free Trial today!:

Taking a further look into this trading simulation example, I found some interesting standouts. Continue reading about one of them here: Market Club Simulation - DELL - Winning Percentages vs. Losers.

Here's an additional follow up article I've written to check on the continued results of this simulation: Market Club Trade Simulation Follow-Up DELL - November, 2010




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