Profit for TSM's Dynamic Entry and Exits and the 200-Day Moving Average ... Andre

Good evening Mr Miller,

One of the entry rule is that the stock price must be above the 200MA. Does it mean you would exit if it crossed under it?

Also, I read your article "Buying weakness and selling strength" with great interest and I have a question.

Regarding the points earned by each of the strategy, can I multiply these by the amount of shares traded to get to the $ gain?

For instance, RSI(2) below 15 two (2) consecutives days is showing a 438.81 points gain in 2009.

Unless my interpretation is false, that means that someone trading 100 shares (each trade) would have had a 43,881$ gain before commissions, right?

Thanks for your help.

Andre

....................

I enter above the 200-day moving average then stay long until I get an RSI(2) >80 signal, even if price falls below its 200 day. Note, until I build a trading history with this dynamic entry and exit, I'm going to take 1/2 position profit at $1 then let the 2nd half run to the RSI>80 trigger.

Yes, if you had made all the trades at 100 shares each, then your profit would have been $43,881. Note, that's a lot of trades (437). Too, it's important to control risk by dividing your capital that you expect to use in this strategy into at least 5 and better 10 positions. Doing this reduces risk dramatically so a stock like today's MELI doesn't impact your account as badly. See my article, "Controlling Risk in Short-Term Trading." (http://www.tradingmarkets.com/authors/all/Richard_Miller).

Ric Miller, Ph.D.
6-Sigma, Master Black Belt