as i was surfing FB stock market pages and reading posts ... it got me wondering ... "teka ... effective ba talaga system ko? ... kumikita ba talaga ako sa aking simple stock market trading system? ...
so .. i started with my simple investigation on whether my simple system is really an effective one ...
first .. ano muna system ko?
eto ....
1. buy stocks when
- their macd histograms fall below the 0 - horizontal
- the macd histogram starts to rise from their bottoms
2. sell when the price hits the cut/stop loss price
i got the past year's chart of my favorite stock - jfc .... and marked the areas when the macd histogram is below the 0 - horizontal and when it is just starting to go up ... and marked the closing price the day after reaches the top (top secret yun stop loss formula ko so ito na lang ang gagamitin ko for this experiment) ...
so here are the results ...
macd histogram below 0; 1 day after the top difference
histogram starts to go up
aug 26 2015 - 182.20 207 24.80
nov 20 2015 - 200 219 19
jan 13 2016 - 205 234 29
april 20 2016 - 226 235.60 8.60
june 16 2016 - 234 255 21
sept 1 2016 - 253 - -
----------------
102.40
based on there prices .. jfc gave me a profit of 102.40 pesos from trading using my "macd histogram trading system (in the absence of any other name)" .. or a 40.96% return (over 250 pesos last friday's closing price) ....
comparing it with a simple buy and hold system ... it gives us a 67.80 peso profit or a return of 27.12 ...
clearly my "macd histogram trading system" is superior to a mere buy and hold strategy ....
i admit sobrang simplistic yun example ... but you get the idea im trying to drive at ... na profitable system ko ...
ill revisit the trading system using another stock example some other time ... but for now hanggang dito na muna ...