Rules:
Buy long if the Value Line Index closes up 4% for the week
Go to cash if the Value Line Index closes down 4% for the week
Simple.
The rational behind the trading system is to trigger long off a 4% thrust, a move which usually indicates upside momentum. The system attempts to capture a bulk of the follow through momentum.
On the downside (going to cash) the system marks its exit by a 4% down week, indicating waning momentum and expected follow through weakness.
I have been trading this system since March of 2009 and here are the trades thus far:
Trades:
I trade the system using the RRY which is a Rydex UWM 2x Russel 2000 ETF.
Current Status of the system is:
Status:
Since the system only trades on Fridays, members will get a warning around 3pm EST on a Friday if the system is setup to trigger on the close.
To become a member simply register at the website in the right hand column.
How do you get the value line index values?
$vay on finance.yahoo.com
I back-tested this method to march'09 but I could see that the “buy” initiated on 3/13/09 was to be sold after week of 4/3/09. Thats becuase the VAY index lost little more than 4% that week. Am I missing somehting in the methodology?
It is a week to week measurement. Friday close to Friday close only. The first Friday to Friday > 4% loss was May 15th around 7.4%.
^VLIC on yahoo finance, love this system !! First time in my trading life, I’m short the market right now, based on close of 2 Friday’s ago. Rather than sleepless nights , I’m making money as the market falls, love it