The second trade of the BestOnlineTrades Cheetah Trading System DBLE is failing to move so far and I am currently under water on the trade. I am still in this second trade of the BOT CTS and currently intend to stay long the trade.
Clearly I was too early on this trade. In hindsight I can see that it would have been better to enter this trade TODAY, instead of 7 days ago. Today the trade is doing a slightly higher low double bottom retest on low volume.
I am hopeful that DBLE is at the bottom of the current trading range and will oscillate back topside to the 10.75 range within the next week or two. I would like to exit the trade on a possible breakout in a few weeks.
As indicated in a previous post, I want to be long TLR and am watching it for signs of ‘the move’. So for now I sit and wait in DBLE hoping for a profit to be realized within the next few weeks.
I may have to add the rule that as part of the Cheetah Trading System I can only enter trades after double bottom retests, or tests back to trendline support. This appears to be ‘more safe’ and but better odds on my side. I want to avoid if possible being stuck in a trading range for 7 days.
Since I am trying to only enter ‘Big Pattern’ trades in the future, I will still adhere to these rules when possible, but entering a Big Pattern is likely to have its own set of unique rules depending on the setup. Still, I think the rules learned so far can be usefully applied.
Just to rinse and repeat, the rules learned so far are :
So in summary the mistakes so far are:
- Do not enter any trade after a ‘record’ number of straight up days (ie. 4, 5, 6 or more)
- Do not enter a trade when the price is moving close to previous high volume swing highs
- Do not LEAVE a trade just because it is pulling back to support line. As long as it holds support line, then stay in and ride it up. Only exit on confirmed break of support up trendline.
- Do not try to PRESUME a breakout until it is confirmed at 3.59PM. Let the price break out a little and be sure it is still an official breakout by 3.59PM.
- Do not enter a trade unless there is a clear sign the trade has SOLID FOOTING, preferably in the form of a double bottom as seen in the DBLE stock today 4/27/2011.
Ok so these are the mistakes and lessons learned so far from the Cheetah Trading System. I will make a habit of reading these rules before any new trade is ever placed.
Both VG ( the first trade of the BOT CTS ) and DBLE ( the second trade of the BOT CTS ) are not what I consider to be ‘big pattern’ type trades. The Big Pattern trading system is something I realized I needed to follow after the first two trades were already placed. This is why I would like to find an entry into TLR eventually to get the Big Pattern strategy going.
So it is a learning process. At first I thought a 5 to 10% trading strategy was appropriate, but now I believe the big pattern strategy is the best approach for a smoothly flowing longer term trading system.