Reader John gave me a tough one today to feature: Goldman Sachs Group Inc. (NYSE: GS). The action was pretty sideways/countertrend all day, except for the morning drop down. The mechanical entries I’ve been using to show off the system performed pretty well. I’ll talk about two ways I’d trade differently below. First the chart:
So, you can see that it grabbed the big drop at the open, then took two more shots short, both of which would result in small losses. Ok, good enough.
But, as a human, I would trade this chart differently on two counts:
- I would never take the second short trade. Why? It’s at the bottom of that huge push down. No retrace. Far from Alla’s average. If I see too many more examples like that coming through, I’ll have to add a rule to the simple stock system to avoid those.
- I’d take the long trade that forms around 10:15. The reason the mechanical system didn’t grab it is because the first green candle hadn’t cleared the fast MA. But, I show people in the eotpro live room often that I’ll get in on the second or third candle if volume pressure is steadily rising. The mechanical system refuses to evaluate a trade after the first candle. I want it to be super simple. I’d also look hard at the long setup just before 13:45, but I”d probably pass because the big upper wick on the second candle would turn me off.
So, the mechanical demonstration made money, and I would have personally made more money. Hard to complain about that! :-)
We had a great time in the live room today, showing off what everypush can do. Guests we had were leaving us happy and profitable. I think at least one of them is likely to sign up and join our group. Always great news!