TRADING WISDOM

 

"The elements of good trading are: 1) cutting losses, 2) cutting losses, and 3) cutting losses. If you can follow these three rules, you may have a chance."

 ~ Ed Seykota

 

"The market can remain irrational longer than you can remain solvent."

~ John M. Keynes

 

 "If you trade without a stop-loss, eventually the markets will stop you from trading by creating permanent losses that can never be recovered."

~ John DiCecco (TrendCharts)

 

"Economists have correctly predicted nine of the last five recessions."

~ Paul Sameulson

 

"Trend following is an exercise in observing and responding to the ever-present moment of now."

~ Ed Seykota

 

"Risk comes from not knowing what you're doing."

~ Warren Buffet

 

"When a position is moving in the direction of your trade, do the opposite of fear; but when a position is moving against the direction of your trade, do the opposite of hope."

 ~ John DiCecco (TrendCharts)

 

"As a general rule (when trading), avoid those things that give you comfort; it's usually a false comfort."

 ~ William Eckhardt

 

Timing is Everything

Were you LONG or SHORT the equity markets on September 26, 2008, a few days before the biggest stock market meltdown in a century?

Our TrendCharts Model was SHORT the SP500 as of September 8, 2008 and remained SHORT until January 5, 2009 for a gain of 26.65% during that period.

Imagine how amazing it would have felt to have been SHORT the markets during those tumultuous times?

After the "generational low" of 666.79 set on the SP500 on March 6, 2009, TrendCharts was LONG the SP500 in four separate trades from April 24, 2009 to April 30, 2010 for a cumulative gain of 19.85%.

After the melt downs we saw in October/November 2008 and March 2009 it would have been extremely difficult to work up the courage to trust the markets again and jump back in - but TrendCharts would have provided that courage.

Since December 28, 2007 our TrendCharts Trade Signals on the SP500 have generated an annualized compounded rate of return of 26.48%.

SP500 - Current Trade

What about now? Are you LONG or SHORT the SP500, or are you sitting in CASH?

The TrendCharts Trend turned LONG for the SP500 on July 5, 2013.       

 

SP500 - TrendCharts Trade Signal

Below is a summary of all the trades generated by TrendCharts on the SP500 (both LONG and SHORT, non-leveraged) since December 28, 2007.

Why start on December 28, 2007? If you built a house and it survived a Category 5 Hurricane, would you worry about it surviving a Category 1 Hurricane? Over the last four years the equity markets have been hit with a series of Category 5 Hurricanes, and TrendCharts managed to survive the repeated onslaughts.

If you had gone LONG the SP500 on December 28, 2007 (when the Great Financial Crisis was still a speck in the eye of the sub-prime mortgage underwriters) you would have bought the index at 1,478.49.

As of February 1, 2013 the SP500 is up 2.30% since then; that's four long years of waiting for breakeven.

TrendCharts trade signals on the SP500 over that same time period generated an annualized compounded rate of return of 26.48%.

Since December 28, 2007 TrendCharts has generated 15 winning trades and 6 losing trades on the SP500 Index, for a trade success ratio of 71%.

Here they are:

                                      TrendCharts SPY Trades 

Trade Signal

Entry Date

Exit Date

#Days

%Gain/Loss

LONG

06-MAY-13

24-JUN-13

49

-2.02%

LONG

11-MAR-13

08-APR-13

28

0.45%

LONG

07-JAN-13

25-FEB-13

49

4.65%

LONG

02-JUL-12

15-OCT-12

105

6.10%

LONG

27-DEC-11

16-APR-12

112

9.20%

LONG

31-OCT-11

21-NOV-11

21

-5.50%

SHORT

18-JUL-11

19-SEP-11

62

8.46%

SHORT

06-JUN-11

05-JUL-11

28

-3.33%

LONG

28-MAR-11

31-MAY-11

63

2.86%

LONG

20-SEP-10

14-MAR-11

175

15.93%

SHORT

16-AUG-10

07-SEP-10

21

-2.61%

SHORT

24-MAY-10

26-JUL-10

63

-1.65%

LONG

22-FEB-10

03-MAY-10

70

9.15%

LONG

09-NOV-09

25-JAN-10

77

2.86%

LONG

20-JUL-09

05-OCT-09

77

10.39%

LONG

27-APR-09

06-JUL-09

70

5.20%

SHORT

20-JAN-09

30-MAR-09

70

1.52%

SHORT

08-SEP-08

05-JAN-09

119

26.65%

SHORT

16-JUN-08

12-AUG-08

56

5.22%

LONG

05-MAY-08

27-MAY-08

21

-2.30%

SHORT

31-DEC-07

07-APR-08

98

5.81%