Results of Published Model Trades for TUE 08/27
Find below the detailed outcome tracking of our models’ trading plans for the day, as well as the results for the last month.
(please click here to view the Summary of the Market Action)
THE GIST:
The index essentially melted down on Friday, logging the fourth straight week of losses, due to Powell’s not-so-supportive (for rate cuts) G7 speech, China’s retaliatory tariffs, and President Trump’s reactions with his trademark knee-jerk tweets.
Both of our models were able to catch and ride the steep drop and managed to register decent positive returns on the day while the index lost 75.84 points (-2.59%).
Medium-Frequency Models: Lead to +8.4 index points in gains on one short trade.
Aggressive, Intraday Models: Lead to -4.4 index points in losses on two longs and one short. (08/29/2019 2:30am – edited to correct the numbers from previously reported gain of +5.7 to a loss of -4.4)
THE DETAILS:
IMPORTANT NOTES ON THE EXECUTION/INTERPRETATION OF OUR TRADING PLANS:
(i) The index by itself is NOT tradable. The model plans here based on the S&P index level can be used to trade any instrument that tracks the index – the futures on the index (ES, ES-mini), the options on the futures (ES options), the SPX options, the ETF SPY are just a few examples of the instruments one can adapt these plans to.
(ii) The hypothetical results published for any morning’s trading plans are arrived at based on a 1-minute bar granularity. Your exact results would vary widely, depending on the time frame you use – tick chart, 1-min chart, 5-min chart, 15-min chart etc, as well as the quality of the execution of your broker and any slippage, the stop levels you use based on your risk tolerance and your trading style.
(iii) For the execution of our models trading plans, a “break above/below” is deemed to have occurred when the index opens below/above and pierces above/below (if you are trading intra-bar) or closes above/below (if you are trading by bar close) a specified trading level.
(iv) For the trades to trigger, the breaks should occur during the regular session hours starting at 9:30am ET. By design, both our medium-frequency models and the aggressive intraday models do NOT open any new positions after 3:45pm; they carry only one open position at any given time.
(v) Due to the “intraday” nature of the aggressive intraday models, they do not carry positions overnight and close out any open positions at the close of the 3:55pm bar.
(vi) The published trade plans and their results are not reflective of, or indicative of, any specific outcomes for any specific individual. While we strive to be as accurate as possible, we can not guarantee nor do we warranty any level of accuracy with anything we publish. Readers are urged to use their own due diligence in making any trading/investment decisions, and explicitly cautions to NOT rely on any numbers/prices we mention in any of our articles.
(vii) These plans and results are hypothetical and NOT an investment advice to buy or sell any specific securities but are intended to aid – as informational, educational, and research tools – in arriving at your own investment/trading decisions. Please read the full disclosures at the bottom of this article for additional notes and disclaimers.
Medium-Frequency Models – Trading Plan Outcomes/Results:
The index broke below the 2878 level at 11:15 am (on the 15-minute timeframe bar – the lowest allowed timeframe specified for today), triggering a short with a 9-point trailing stop. The short rode down to the session low of 2860.6 at 1:00pm, moving the trailing stop trigger to 2869.6. The stop was hit in around 1:35pm, closing the short with a gain of 8.4 index points.
The models stayed flat for the rest of the session as no further trades were triggered (even though there was a failed spike above the 2878 level, on a 15-minute timeframe it does not qualify as a “break below”).
Aggressive Intraday Models – Trading Plan Outcomes/Results:
The index broke above the 2896 level around 9:36am, triggering a long with an 8-point trailing stop. The long rode to an interim high of 2898.8, lifting the trailing stop trigger to 2890.8, which was hit at 10:10am closing the long with a loss of 5.2 index points.
The index broke above the 2890 level at 10:15am, triggering a long(#2) with an 8-point trailing stop. The long reached an interim high of 2893.1 at 10:20am, lifting the trailing stop trigger to 2885.1. This stop was hit at 10:57am, closing the long with a loss of 4.9 index points.
(08/29/2019 2:30am – edited to add the above trades missing from the original results’ calculation)
The index broke below the 2885 level at 10:58am, triggering a short with a 6-point trailing stop. The short reached an interim low of 2873.3 at 11:20am, moving the trailing stop to 2879.3. This stop was hit at 11:36am, closing the short with a gain of 5.7 index points. The models stayed flat for the rest of the session as no further trades were triggered.
Thus, our aggressive intraday models’ trading plans lead to a gross loss of -4.4 index points (-5.2 -4.9 +5.7) on a total of three trades.
Note: For the trades to trigger, the breaks should occur during regular session hours starting at 9:30am ET. Due to the intraday nature of these aggressive models, they indicate closing any open trades at 3:55pm and remaining flat into the session close. No opening of new positions after 3:45pm. Only one open position at any given time.
NOTE: Remember that a “trailing stop” works differently from the traditional stop-loss order. Please bear in mind that the trailing stop’s trigger level would keep changing throughout the session (click here to read on the conceptual workings of a trailing-stop).
IMPORTANT RISK DISCLOSURES AND NOTICES – READ CAREFULLY:
(i) This article contains personal opinions of the author and is NOT representative of any organization(s) he may be affiliated with. This article is solely intended for informational and educational purposes only. It is NOT any specific advice or recommendation or solicitation to purchase or sell or cause any transaction in any specific investment instruments at any specific price levels, but it is a generic analysis of the instruments mentioned.
(ii) Do NOT make your financial investment or trading decisions based on this article; anyone doing so shall do so solely at their own risk. The author will NOT be responsible for any losses or loss of potential gains arising from any investments/trades made based on the opinions, forecasts or other information contained in this article.
(iii) Risk Warning: Investing, trading in S&P 500 Index – spot, futures, or options or in any other synthetic form – or its component stocks carries inherent risk of loss. Trading in leveraged instruments such as futures carries much higher risk of significant losses and you may lose more than you invested in them. Carefully consider your individual financial situation and investment objectives before investing in any financial instruments. If you are not a professional trader, consult a professional investment advisor before making your investment decisions.
(iv) Past performance: This article may contain references to past performance of hypothetical trades or past forecasts, which should NOT be taken as any representation or promise or guarantee of potential future profits. Past performance is not indicative of future performance.
(v) The author makes no representations whatsoever and assumes no responsibility as to the suitability, accuracy, completeness or validity of the information or the forecasts provided.
(vi) All opinions expressed herein are subject to change at any time, without any notice to anyone.