August 2007 Results and Comment

For the month there were 16 positions, with 12 profitable. The gross for the month was $16,080, with commissions of $800. The net profit was $15,280, which is a 30% return for the month or annually a 366% return. These are a little higher than the average, but very consistent with the long term results.

It was an interesting month and shows the flexibility of the Market Bias Indicators. The week of the 13^th was one of my best trading weeks ever, then four days of “NO POSITIONS”, with one break-even day and finally the 28^th and 29^th were two consecutive days of loses, which I can not ever remember happening before. These were extremes, but all in all a very good month. The basic trading plan has been in place for years, but I continue to research the market and add little “tweaks” where needed. I had to get a better understanding of why two losses in a row occurred. It all had to do with volume! I had known for years that if the market is going higher or lower we wanted higher than average volume. While I knew this, it had not been a factor or something that was necessary in the past. My Market Bias indicators need higher than average volume to produce good results. Every single time in the past year that My Market Bias indicators did NOT function correctly it was due to lower than average volume. I’m still going to enter the market based upon the Market Bias Indicators (Trade Bias is all of these combined), but when the inter-day volume is below average, loss stops and trailing stops are narrowed (see the Volume and Market Bias Rules files for more information on this). When something occurs that I don’t understand, I going to do some research to see why! If a positive conclusion is reached from this research, the trading plan is “tweaked”, just a little, to include this added information!

Many have asked, “Why does this work?” First, the Market Bias Indicators use three different time frames to show when the market is turning and this allows us to enter the market very early, but only when the turn has been confirmed. In my many years of trading, this allows you know the future a day or so early! And Second, strict money management is applied. I don’t “believe” something will happen as you hear the experts say on CNBC! I take a profit, accept a loss and most important, consistently do things the same way! See the Trading Rules and you will see how I use money management to profit. This seems simple, but is the reason profits continue to be good every month.