HomeTradingTradesSPY – 4-9-16 Gr8SPYtrades weekly results

The bot has been running now for two weeks and alerting in realtime. Based on the results which are inline with the results I got from backtesting with 14 months of intraday data I am now firmly convinced that this is my future in daytrading weekly options. It completely eliminates the “human emotion” factor out of the equation. How many times have you not seen losses increase due to a “revenge trade”, or missed a potential profitable trade due to being scared to enter a new trade after you had some losses? This is one of the factors that make trading difficult, and many traders fail due to being to emotional, not able to be disciplined, not able to stick to a plan, not having a trading system, etc, etc…

From now on I’ll be fully committed to further development of the bot. The rules as I have explained now several times in recent posts will drive my trades, and ultimately I want to turn it into a fully automatic trading system aka black box.

I’m going to significantly reduce my tweets during the day and I won’t give out any trade ideas based on my charts/indicators anymore; On my Belize business trip I got an offer I couldn’t refuse, but it’ll restrict me from sharing charts/ideas etc. (btw highly recommend a trip to Belize; beautiful country, friendly people) 

I will continue offering the bot service to the members, but I want to keep it a small group. For now membership pricing remains the same, but it’ll turn into a monthly recurring paid service at some time.

With that out of the way, here are my plans for the bot:

Besides SPY, support for more tickers:

Choose up to 5 tickers you'd like the bot to support
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Besides twitter, use other media to alert:

How would you like to receive alerts?
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Lets have a look at last weeks alerts:

The first alert came on the 6th:

bot-alert-1

A short at entry of 205.44, with a PRZ target starting a 204.96, and D at 204.91

This potential pattern just passed the minimum range size from entry to D, to get qualified.

As you know the bot’s rules are based on 15 and 5min charts:

 

Neither on Monday or Tuesday was the 113%XA of the yellow pattern reached, Therefore we did not get an alert from the bot to go long, eventhough an entry for a CD leg higher was recorded on Wednesday morning the 6th.

However this new Bear pattern (blue) reached its 161.8%XA, and therefore the bot starts watching for new Bull patterns starting at that level. Which happened subsequently. Look at the 5min chart, and you see how the Bar A was right at the 161.8%XA. Up front we knew this would be a relatively small pattern, since the range between entry and D target was small. On top of that, the PRZ target was not reached before the reversal started, and the 15min pattern continued up to a 224%XA projection. And therefore you either stop out at b/e or the maximum loss of 20-25% as per the rules.

We trade ATM or 1 strike OTM weeklies, the 205 puts were trading around 0.67 at time of alert. The subsequent high was 0.83 before it dropped below the initial entry. Our rule to take some profit at +30% was not triggered, so therefore you have to set your stop at break-even.

The next alert was on the 7th at 10:15:

bot-alert-2

Short entry at 205.21. This time a larger move was expected, with a PRZ D target at 204.09.

the 15 and 5min charts:

The Bar A of the Bull pattern on the 5min chart is right at the 224%XA of the Bear pattern on the15min chart.

the 205 Puts at time of alert were trading at around $0.8 and reached a high of $2.05 when it reached the 127%XA, which was also within a few pennies of the 127%XA of the Bull pattern on the 15min chart, see first chart above.

So therefore we can (most certainly the bot is) look for a new pattern on the 5min chart which has either its Bar A or entry bar at that level.

Lo and behold…

 

A long alert at 15:50 for a new Bear pattern on the 5min chart which had its BarA exactly at the previous mentioned 127%XA of the Bull pattern on the 15min chart: perfect! A decent size pattern was expected from 203.76 to a D target of 204.44.

Next day opened up above the PRZ, and ran right into its 161.8%XA

204 calls were around $0.6 at entry, and $1.85 at the 161.8%XA!

The last alert of the week was wrong and related to a bug:

bot-alert-4At 14:10 SPY was not trading at either a PRZ or a XA of 113% or higher of a Bull pattern on the 15min chart, which is a condition that has to be true before we can qualify an entry on a 5 min chart. A bug caused it to look at a 5min pattern instead of a 15min.

I usually don’t recommend taking front end weeklies on a late Friday afternoon anyway, unless you have conditions as we saw on Friday April 1st.

Really good results, if you don’t count the bug alert Friday afternoon.

You can anticipate the alerts by using the calculator on 15 min charts, draw in the PRZ and 113% and higher XA levels, and then watch 5min charts.

 

 

 

 

 

 

 

 


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