AAPL oversold (LONG at 216.32)

3 hari laluI'm not as bullish here as I was with
NVDA, but as long as they can sell phones for as much as they do, to as many people as they do, count me in.

It doesn't hurt that my system is 32-1 on AAPL (not including today's signal) in the last 12 months (the 1 "loss" is the signal from 9/4). Those who follow me know those aren't atypical results, so I'm confident the trade will work out eventually, and likely sooner rather than later, barring some giant negative overall market reaction to the Fed announcement.

I haven't gone all the way back testing my system on AAPL, but knowing how my system works, I don't need to (for me anyway). I can say with certainty that given where the stock is trading relative to its all time high, that it is probably undefeated in the history of AAPL except for the 9/4 and today's signals (so far). The results would be similar to my test on NVDA in my earlier idea, but with more wins because it has a longer trading history, but maybe a smaller average gain per trade because it's a more mature industry.

A relevant note should be mentioned here, that I should have included in all my previous ideas, but didn't think to until this weekend. My results may seem unrealistic (upwards of 90% win rate), but I don't use First-in-first out (FIFO) "accounting" when trading because it makes it harder for me to keep track of things the way my system works, since I hold trades until they are both overbought AND profitable.

I use Lowest-cost-First-out (LOFO) "accounting". When trading in a taxable account, there may be advantages to harvesting synthetic "losses" using FIFO accounting. When using FIFO, my win rates are usually mid-60s to low 70s.

In the end, the only thing that really matters are the end results, particularly the gain per lot per day stat, which works out the same either way. Almost all the trades would be considered short term gains for taxable purposes anyhow, which is why I do them in a tax advantaged account. There are risks to doing that, so PLEASE do not take that as advice - it is not intended as such. It's just an explanation of why my win rates seem high.

Here are the recent numbers from my system during a solid, but not spectacular, 12 months for AAPL.

Wins: 32
"Losses": 1*

Average gain per lot traded = 2.28%
Median gain per lot traded = 1.71%

Average trade length = 20 days
Median trade length = 10 days
Most common trade length = 5 days

Gain per lot per day held = .113%
Annualized rate of return = .113% x 252 trading days = 28.5%

These results are only over a 1 year span during which the stock was up around 21%, so the annualized rate of return is only slightly better than buy and hold. That said, my system actually performs best in choppy markets and typically outperforms B&H by substantial margins in bearish periods, especially so if there are "bull trap" rallies mixed in. Most of AAPL's yearly gains this year came from 2 long bull runs that afforded zero oversold opportunities during them, thus the relatively small outperformance.

Given the small sample size, I suspect that if I had done a long term backtest on AAPL, the average trade length and average gain would have both been higher than shown above while return per lot per day would probably have been a little lower.

These trades in AAPL, when viewed alone, are admittedly far from impressive. But they are consistent.
And when the capital is cycled from one overbought stock to another that is oversold, that's when this method shows its value.

If you have questions or comments, feel free and I'll address them as soon as I can. Have a great day, everyone!

As always, all of this info is for educational and general amusement and entertainment purposes and is not investment advice. If you trade any of my ideas, you do so at your own risk.

2 jam lalu

Dagangan ditutup: sasaran tercapai

It's overbought, so I sold the 1 lot of AAPL for 228.79 at the close. +5.8% in 3 trading days.

2 jam lalu

Komen

Trade summary (for my records)

Wins 1 Losses 0

+5.8% in 3 days

Avg. win = +5.8%
Avg hold = 3d
Per lot per day held annualized return = +487%