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 MarketTrak Question/Comment Message


Posted By: topannuity   Date: Fri Apr 18, 2008

Title: Will you let us know if the short ...

Message:
  Will you let us know if the current short was stopped out with the 2% stop or 5% stop ?

Response:
  The market is extremely overbought so I decided to remain short in my accounts. The current down signal is quite strong so the risk is acceptable for me. As I mentioned before, you need to set stops according to your risk level and financial situation. I raised my stop to 6.0 percent. Currently, the drawdown stands at 4.45 percent.

  I am developing a revised trading model that requires an additional test, besides the delayed ANO, before a movement from a cash position will occur. This test would have reduced the drawdown over the last few days. The test looks to see if a short-term overbought or oversold condition exists. A movement from cash to long will be delayed if the market is overbought. Similarly, a movement from cash to short will be delayed if the market is oversold. More analysis is necessary before the trading model will be modified.

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