A Simple ETF Trading System - Trading-Lab

Leth · #1 11-29-2007, 03:56 AM

This simple system (created for new traders) trades only 6 ETFs and is labeled as "always in the market." Leverage, Pyramiding, and trailing stops have not been reflected; if used, results may vary.

System Category

Trend Following

Risk Rating

Mid-Low to Medium

User Rating

Easy

ETFs traded

XLE, RTH, SMH, SPY (Long Only), XLF, and TLT

Method

Exponential Moving Average (EMA) System

Parameters

Fast EMA (15 periods), Slow EMA (50 periods)

Rules

1. Check your positions at end of day (EOD) only.
2. Go long at the market the day after the fast 15 day EMA crosses above the slow 50 day EMA.
3. Go short at the market the day after the fast 15 day EMA crosses below the slow 50 day EMA.
4. Always exit and reverse position the day after the fast EMA and the slow EMA cross.
5. Never deviate from your rules.

Starting Capital

$5,000.00

Risk Allotment

Risk no more than 5% of total capital (1 unit) on any one position.
After your account reaches a minimum of $20,000.00, pyramiding may be used at users discretion; adding no more than 2% of total capital to your current position.

Failsafe

If you have more than 10 losing trades in a row, cut back 2% of your total per trade capital.
When your risk threshold has returned, add 2% back to your total per trade capital.

*Disclaimer: Your personal choice in trading methods should be based on your evaluation and understanding of risk. The author of this article (Leth) is not liable for any personal losses accrued as a result of the above system utilization.

BoneFishGA · #2 11-29-2007, 07:26 PM

What do you mean by pyramiding?
I've never really considered momentum trading and its very interesting to me now that I've read a little about it.

ProTrader · #3 11-30-2007, 01:58 PM

http://www.investopedia.com/terms/p/pyramiding.asp

breakout · #4 11-30-2007, 03:21 PM

didn't I read this article in one of your blog entries a while back? great article by the way

Leth · #5 11-30-2007, 03:32 PM

the article you were thinking about explained the building blocks of creating trading systems.

this thread shows an actual (lower-risk) trading system thats tailored for new traders wanting to get started, but dont know how/where...very simple.

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#1 11-29-2007, 03:56 AM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	A Simple ETF Trading System This simple system (created for new traders) trades only 6 ETFs and is labeled as "always in the market." Leverage, Pyramiding, and trailing stops have not been reflected; if used, results may vary. System Category Trend Following Risk Rating Mid-Low to Medium User Rating Easy ETFs traded XLE, RTH, SMH, SPY (Long Only), XLF, and TLT Method Exponential Moving Average (EMA) System Parameters Fast EMA (15 periods), Slow EMA (50 periods) Rules 1. Check your positions at end of day (EOD) only. 2. Go long at the market the day after the fast 15 day EMA crosses above the slow 50 day EMA. 3. Go short at the market the day after the fast 15 day EMA crosses below the slow 50 day EMA. 4. Always exit and reverse position the day after the fast EMA and the slow EMA cross. 5. Never deviate from your rules. Starting Capital $5,000.00 Risk Allotment Risk no more than 5% of total capital (1 unit) on any one position. After your account reaches a minimum of $20,000.00, pyramiding may be used at users discretion; adding no more than 2% of total capital to your current position. Failsafe If you have more than 10 losing trades in a row, cut back 2% of your total per trade capital. When your risk threshold has returned, add 2% back to your total per trade capital. Disclaimer: Your personal choice in trading methods should be based on your evaluation and understanding of risk. The author of this article (Leth) is not liable for any personal losses accrued as a result of the above system utilization. __________________ Nothing is more difficult than the art of maneuvering for advantageous positions. - Sun-Tzu Trade with the trend, Ride winners, Cut losers, Keep bets small, Use Stops - Old School Last edited by Leth : 12-30-2007 at 05:03 AM.*

#2 11-29-2007, 07:26 PM
BoneFishGA Junior Member Join Date: Nov 2007 Location: South Carolina Posts: 28	What do you mean by pyramiding? I've never really considered momentum trading and its very interesting to me now that I've read a little about it.

#3 11-30-2007, 01:58 PM
ProTrader Senior Member Join Date: Jun 2007 Posts: 109	http://www.investopedia.com/terms/p/pyramiding.asp

#4 11-30-2007, 03:21 PM
breakout Member Join Date: Jun 2007 Posts: 63	didn't I read this article in one of your blog entries a while back? great article by the way

#5 11-30-2007, 03:32 PM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	the article you were thinking about explained the building blocks of creating trading systems. this thread shows an actual (lower-risk) trading system thats tailored for new traders wanting to get started, but dont know how/where...very simple. __________________ Nothing is more difficult than the art of maneuvering for advantageous positions. - Sun-Tzu Trade with the trend, Ride winners, Cut losers, Keep bets small, Use Stops - Old School Last edited by Leth : 11-30-2007 at 06:17 PM.