POV needs fewer and longer trades

POV needs fewer and longer trades

When we began the POV auto trading program we started out very strong but have recently accumulated a string of losses. I make no excuses for my own emotional errors, but there is a more basic problem that must be addressed before we trade live again.

POV was designed for a 1-minute time frame and a per-contract cost of $6 or less. 90% or more of the time, the 1-minute Average True Range dictates a 3-tick initial target, but because of the low cost, we have no trouble earning a free trade. And, there is no impediment on how many trades we make in a day. I still maintain that as a methodology for low-cost, self-directed traders, it is the best there is. But, POV, in its original form, is having trouble consistently overcoming the $20 per-contract cost in the auto trading program.

The majority of trading systems offered by Striker appear to be position trading systems. The longer and further an individual trade goes, the less affected the outcome is by a higher transaction cost. I have also noted that POV appears to have far more trades than other day trading systems. I believe the bottom line is: if POV is going to survive and prosper in this environment, we need fewer and longer trades.

Today we demo-traded on the 3-min/13-min chart to see if using that higher time frame would give us accurate signals for fewer and longer trades. So far, so good. We will continue our demo experiment tomorrow and Friday after which we will decide if we will apply the new arrangement to our live trading on Monday.

Today we traded 24 contracts. Our preferred per-contract daily target is $162.50 for a total daily goal of $3,900. In the attached screen capture, there are two trades totaling a net profit of $5,640. I stopped trading at this point as I would do in real-money trading.

I will meet all current students and monthly subscribers back in the ROOM tomorrow for another test of our higher time frame technique. Stand by for further updates.

Today’s Chart

Here is today’s screen capture.  Please click on the chart to make it larger.

Chart #1

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