Trade Ideas Blog

Open House Day 4 (Handling The Downside)

Jul 22, 2016

Thanks to everyone who is participating in our summer Test Drive. Today SPY lost  -.82 cents. while Holly lost -.04 cents on a total of 17 suggested trades. When we are negative we look to be down less than the SPY.  Not all days can be positive, trades go against the assumption.  We watch Holly work negative days and gain the confidence that we can handle this type of situation in a controlled manner. 


Today’s Holly’s highlight real trade came from TACO – Del Taco Restaurants Inc.  TACO came from two separate strategies allowing us to trade the same stock twice.  Initially, at 7:01 (PST) Holly suggested to buy TACO at $10.62 from the strategy “Alpha Predator”.  Profit Save Mode quickly took over and 10 cents profit was taken.  Two hours later Holly suggested to buy TACO again at $10.68 via the strategy called “Count De Monet”.  Although we were completely following Risk Off Mode, where opportunities are scalped rather than considered momentum or continuation trades, Count De Monet still managed to squeeze every bit of profit to exit perfectly at $11.22 – almost the high of the day.  The big advantage for investors in using our approach is that we find the statistical POTENTIAL in price behavior and that lets us see things that no one other than a Trade Ideas Holly user is able to see.

Another standout Holly trade today was KZ, KongZhong Corporation.  This trade was initiated at 7:57 am (PST) at $5.07 it was held for an hour and exited in Risk Off Mode.

Remember that this is all happening automatically via technology.  Holly is a computer that thinks it is an active investor.  The computer is designed to solve the age old problem of successful speculation byfinding statistical supply and demand inefficiencies.  As we said before that winning is just one aspect of engaged active investing.  You have to know how to lose well, otherwise it is impossible to win.

Notice that in today’s data not a single loss in Risk Off Mode was bigger than – .25 cents.  Holly knows the right amount to lose for every single stock at any point in time.  So can you.
All that you need to do is open a Trade Ideas Single Stock window.  Notice the Smart Stop.  This field updates during the day and changes if the stock behaves in a different way. Notice that because POST continued to go lower after the Holly suggested trade, at the end of the day the Smart Stop had grown larger to give more wiggle room for extra volatility.

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