A Breakthrough in Swing Trading
While the current trade is ticking along above a 4% gain, I have been working steadily on a new technique that would work universally across all forward trades and past trades to keep more profits.
The biggest frustration in trading the system has not been in ability to pick out bottoms, it has proven itself over and over how good it is at that aspect, but the biggest frustration is the inability to use a trailing stop or some other form of stop loss that made sense and universally grabbed more profits over the history of the charts. I tested trailing stops and hard stops and just about every indicator under the sun for this purpose in the past and found them only useful in protecting my account when I was wrong right off the bat.
Well today I am very pleased (with myself!) to share what is clearly a breakthrough in trading the Dot2Dot system. In the picture above is a record of the actual last 6 trades for the year. Obviously the system is doing very well. However, clearly it gave up too much profit in the past as the price comes down very rapidly on one red trading day. I have now implemented a change in the system that allows me to grab a lot more of the profits, this, as you can see in the chart is a game changer.
In the picture above are blue lines showing where the system would have got out with the implementation of this new rule for exits. The exciting thing for me is not just that it keeps more profits, it actually reduces the size of the losses too, getting me out sooner than the current code.
The power of Dot2Dot is it’s ability to grab at the bottom of most moves in the market and compound money faster than investing, well now it has the ability to get out near the top in most cases. I am not sure I have seen anything this good at taking out the swings in the market, even if I do say so myself. Anyway, had to share. Look out for a raised stop loss to protect the current winning trade and make sure the system locks in a substantial part of the current profit.