The Trading Plan (Trial)

Hi All,

Objective:

My objective of this project is to study the win/loss rate of this system. Thus, position sizing is not the main priority here. The trades will be simulated with 100 shares of stocks per trade. Another reason is, risk control with options will be different to individuals depending on the strike price and months that one pick, thus we will not use options in the analysis.

TAZ - Profit & Loss Analysis v1.0.xls:

This is the summary of all the trades taken by TAZ method (with more simplified rules). This excel will tabulate the expectancy return of the system and reflect if there is any tweaking need to be done when market condition changes.

Finviz Scan:

Bull Scan:

Optionable stock.
Price > $20.
ROE > 10%
Price < SMA20.
Price > SMA50
Price > SMA200.
Average volume > 500,000 (Adjustable if too many stocks)
ATR > 1.0

Bear Scan:

Optionable stock.

Price > $20.

Price > SMA20.
Price < SMA50
Price < SMA200.

Average volume > 500,000. (Adjustable if too many stocks)

ATR > 1.0

Rules (For filtering too)

1. Never trade outside TAZ (EMA30, SMA10), except if SMA50 is historically a strong support/resistance.
2. Buy only if W%R(10) is oversold, sell only if W%R(10) is overbought.
3. Wait for candlestick confirmation even if in the Supply or Demand Zone.
4. Confirmation will be based on open/close/high/ low depending on candlestick pattern.
5. Watch for price reversal at 50% retracements of daily Engulfing patterns, Piercing pattern and dark cloud covers in 5 min chart.
6. No volume analysis. (Guppy's theory of Volume following price)
7. Make sure the trend is confirmed with nice GMMA.
8. Long when SPX is up. Short when SPX is down.
9. Exit trade only when stop loss is hit or target is hit. We want to see how far the trend last or how soon the stop out is hit. (This calculation is in the excel)
10. Price should move after Candlestick Reversal pattern. If they don't, cut the trade after 3 days.