LONG PXS (oversold, strong trend, 4 down days)
Zaktualizowano
I always like trades where 2 different systems both say "buy". My usual system is the reason I'm taking the trade, and per usual, I'll keep buying lots as long as it is oversold and sell when they become overbought and profitable.That said, there are 2 other reasons I like this trade.
First, PXS is in a strong uptrend that began last September. "The trend is your friend" is the most ironclad piece of chart analysis advice that's ever been given, in my opinion. Trading is a percentages and probabilities game and trading with a trend (unless a stock is MASSIVELY overbought) always improves your odds. Trading stocks above their 200d MA is a simple way to determine this, but frankly the eyeball test works best for me. A trend has to be very strong to be immediately visible glancing at a chart, and those offer the best opportunities for the mean reversion trading I do.
Secondly, I am a big fan of Larry Connors and much of what I do has its roots in his ideas. A variation of one of his strategies is a very simple one, that yields solid and consistent results. 4 out of 5 days down is a strategy that overlaps what I do, but also gives a stronger signal when it coincides with what my personal analysis says. Basically, if a stock is down 4 out of the last 5 trading days, and is below its 5d SMA, buy. Sell signals can be one of two - sell when the close is above the 5d SMA or when the stock hits a 5 day high. Now that isn't Connors' original plan (you can look it up if you want to get the original) but I've found both exit strategies to work well, especially when they both signal at once.
So here with PXS we have ✅oversold based on my algorithm, ✅ strong uptrend, and ✅ 4/5 down all saying "green light" for this trade. I'll enter on Monday, as long as the open is around the Friday close price. I prefer to look for these near the close and buy then, but I've been busy lately and the weekend was the first chance I've had to look for some new ideas.
As always, this is just a log of my trading ideas and isn't investment advice. I wish you luck if you choose to trade it yourself, but do your own due diligence!
First, PXS is in a strong uptrend that began last September. "The trend is your friend" is the most ironclad piece of chart analysis advice that's ever been given, in my opinion. Trading is a percentages and probabilities game and trading with a trend (unless a stock is MASSIVELY overbought) always improves your odds. Trading stocks above their 200d MA is a simple way to determine this, but frankly the eyeball test works best for me. A trend has to be very strong to be immediately visible glancing at a chart, and those offer the best opportunities for the mean reversion trading I do.
Secondly, I am a big fan of Larry Connors and much of what I do has its roots in his ideas. A variation of one of his strategies is a very simple one, that yields solid and consistent results. 4 out of 5 days down is a strategy that overlaps what I do, but also gives a stronger signal when it coincides with what my personal analysis says. Basically, if a stock is down 4 out of the last 5 trading days, and is below its 5d SMA, buy. Sell signals can be one of two - sell when the close is above the 5d SMA or when the stock hits a 5 day high. Now that isn't Connors' original plan (you can look it up if you want to get the original) but I've found both exit strategies to work well, especially when they both signal at once.
So here with PXS we have ✅oversold based on my algorithm, ✅ strong uptrend, and ✅ 4/5 down all saying "green light" for this trade. I'll enter on Monday, as long as the open is around the Friday close price. I prefer to look for these near the close and buy then, but I've been busy lately and the weekend was the first chance I've had to look for some new ideas.
As always, this is just a log of my trading ideas and isn't investment advice. I wish you luck if you choose to trade it yourself, but do your own due diligence!
Uwaga
Got a partial fill at 5.20 just after the open today and I'm hoping to get the rest filled at some point during the day today. If not, I'll fill out the lot at the close as long as it hasn't run up too much by then.Uwaga
Filled lot 1 at 5.20 and will add another lot if lower at the close.Zlecenie aktywne
Added another lot just before the close at 5.17Uwaga
I just got done backtesting my system on this ticker and here are the results for the stock's entire existence (around 9 yrs):
241-9* (9 lots still open with 6 of those currently down at least 58%) = 96.4% win rate
Average return on each of those 250 lots traded (Including the current losers): +11.3%
Median return per trade = +7.6%
Total return for all trades = 28.3x lot size
Max # of lots held at once = 28
Average hold length = 88 trading days (but the median is only 14.5) - this is skewed by the fact that 6 of the 9 open lots have been open around 8 years
Return per day held (including losses from the 9 "losers" = +.129% (+32.5% annualized)
Total return for buy and hold since PSX went public = negative 69.7%
Uwaga
I meant PXS in the last line of the previous commentZlecenie aktywne
Added lot 3 before the close at 5.12Zlecenie aktywne
Still oversold yesterday so I added lot 4 at 5.04. I thought I updated it yesterday but I guess not.Uwaga
I shouldn't have included Connors in my original analysis, because I'm not trading the stock that way, but I feel obligated to update based on that to at least illustrate how his system works. I don't know why the 5d SMA doesn't show up on the new chart section above, but with Connors' system, every red bar would have been a purchase because . No close yet above the 5d SMA or a 5 day high since the trade was initiated, so basically if you followed his rules, you'd be holding six lots purchased at 5.20, 5.20, 5.11, 5.05, 5.04, 5.01 so far. You could argue that since it was below the 5d SMA and was part of a 4 of 5 down days streak, the higher 5.11 close last Friday (8/30) should have been purchased. I've always only added on lower closes, though.Uwaga
On the Connors trade it would have added again at 4.95 at the close today. Not oversold based on my algo, so I'm not actually adding any more yet.Zlecenie aktywne
Added 1 lot at 4.915 at the close.Zlecenie aktywne
Added 1 lot at the close at 4.81 - oversoldUwaga
Back to Connors (I'm really annoyed I combined these two in the same idea). sorry if this is confusing to everyone following this. With the Connors system, 3 more lots would have been added on 9/4 at 4.91, 9/5 at 4.80 and 9/10 at 4.80. For simplicity's sake, I'll use a 5 day high close as the exit signal, which would have occurred on 9/11 at 5.02. The average return on all lots combined would have been +0.21%. Not great but considering that down streak it wasn't bad. OK thank God I'm done with that example. All other updates will be about the actual trade.Zlecenie aktywne
I added 1 lot at 4.94 at the close today because it's oversold again. It's a good sign, though, that this most recent oversold signal is at a higher price (4.94) than the last one (4.81). Usually, that tends to make the probability higher that the next signal (once it stops being oversold this time) is overbought. Again, that's not always true, but probabilities are what I trade on.
Current lots held (in price order): 5.20, 5.17, 5.12, 5.04, 4.94, 4.915, 4.81
Zlecenie aktywne
Added another lot at 4.675 before the close today because it's oversold again.
Current lots held (in price order): 5.20, 5.17, 5.12, 5.04, 4.94, 4.915, 4.81, 4.675
Zlecenie aktywne
Added another lot at 4.62 - still oversold.
Current lots held (in price order): 5.20, 5.17, 5.12, 5.04, 4.94, 4.915, 4.81, 4.675, 4.62
Zlecenie aktywne
Added another lot at 4.325 since it's oversold again.
Current lots held (in price order): 5.20, 5.17, 5.12, 5.04, 4.94, 4.915, 4.81, 4.675, 4.62, 4.325
Uwaga
Added another lot at 4.26 -- oversold again.
Current lots held (in price order): 5.20, 5.17, 5.12, 5.04, 4.94, 4.915, 4.81, 4.675, 4.62, 4.325, 4.26
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