LiveTradingSystem Weekly Report

Simple Money Zone Live Trading System = Weekend Summary – 03/26/2023

The stop for $SPY has been set at 388.94. The system ended a streak of seven trades with a 0.02% loss.

Trading system review: Last week, the system was stopped out of one long position on 03/24/2023 with a minor 0.02% loss. The system had to chase the market closing price with a higher price. This situation where we were stopped out, and then we had to chase the price higher, for this particular type of signal at this particular kind of place only happens seven times, so it is not very common. Nevertheless, I spent some time trying to improve the stop logic again for these types of trades.

Trading system status:

Additionally, I spent a significant amount of time over the weekend trying to improve the system. The system has increased performance quite a bit. My plan is to do a gradual shift from the old system to the new system, which aims to improve performance by adding another 5% per year and cut drawdown by another 20% from 6% to 5% on a trade basis, improve the win rate, reduce whipsaw, and especially improve the profit-taking strategy for short positions. We will also consider overall market conditions, such as when it is a “buy the dip” market and when it is a “sell the rip” market, to decide how we trade and when to take early-bird profits, especially for short trades.

The timing model is forecasting a bounce next week, but I do not want to reveal too much as we want to flawlessly follow the trading system. The current trading system is good enough, but it will never be perfect. Sometimes, unlucky things can happen. The best thing I can do is follow the system. I tried my best to have a better stop strategy for the system and trading signals for everyone. However, it is essential to be aware that the best win rate is 70% to 80% as I continue to improve it.

I believe the improvement of the new system is not due to overfitting, and more importantly, the system is a gradual improvement from the old system as it is taking almost all the right trades that the old system has. It is not a logic change or a major change, but we are making the idea more comprehensive and using more modern math to represent the formula in a seamless manner.

System and/or market outlook: That being said, my personal bias is that next week will have some kind of bounce followed by further decline at some point, maybe next week or the following week.

Disclaimer: Trading stocks involves high risks, and you can lose money. You are responsible for your own investment decisions.

Live Trading System: hosted by David Lee (Twitter ID: SimpleMoneyZone).