Finally, the stocktwits discussed a stock more than SKF. Sadly, they chose General Motors Corporation (NYSE: GM), which spent most of its day in a tight range. If I ever finish my article on daytrading stocks, one part of it will describe the fact that you want to trade a market thats moving. Oh well, the simple stock system still handled it well, which is nice:
I want to point out the end-of-trend indicator in the second-to-last subgraph. In particular, look at when the thick blue line comes up toward the top and turns magenta. This marks the area where you want to be careful, and potentially take your profits. Look at how it pegs all three big moves of the day!
Here are the trades:
- We have a long trade which reverses up at 4.50ish rather quick, but you’d know better than to let this winner turn into a loss, because end-of-trend is warning you. Fantastic!
- Then, we have a nice short trade. Again, end-of-trend helps you pick a great place to scale out.
- Then, we get stuck in a sideways range… and the system repeatedly tells you you want to be long. See the volume pressure staying to the upside, which also helps you to hold on. If you eventually sold this for break-even, or even a small loss, I wouldn’t blame you. But, if you held on, eventually you got the predicted pop up, and end-of-trend tells you when to aggressively protect your profits.
- Finally, we get short toward the end of the day, but the stock just sits there. You’d close at end of day for b/e, give-or-take.
So I guess I got my wish, and got to profile a stock. Too bad it was today, since it looks like freaking SKF trended down smoothly all day! Still, I am pleased with what the system did with this mess. When I first pulled up the chart, I admit I wondered if I would get chopped up. Turns out, the system was ok!
Please note that if you only traded on the right side of Alla’s Average (the dashed yellow average on price action), you’d just have the big short trade, and the flat short trade. In my own personal trading, I rarely fight Alla’s Average, but I wanted the demo system to have as many trades as possible (readers like action!) and it seems to still do ok.