Rolling Year Records

[adwebster]

Hi All,
I am in the process of trying to pick holes in a few approaches I am working on and just wondered if anyone may be able to help me. Basically I'm wondering if anyone has any experiences in trading equities (or equity CFD's) that hit rolling year records, both highs and lows. I'm always listening for what makes a good 'system' and can think of some good points to this type of approach. It follows the trend of both the stock and the market, its simple, it gives me re-entry signals if it hits a new highs/lows after previously being stopped out etc. Am just wondering if anyone has experience using a simliar approach and can anyone think of any other points regarding the approach, both good and bad? All help would be greatly appreciated
Thanks
Adam

'He who try to pick bottom get sticky finger' Anon

[walterw]

Sounds interesting... could you post a chart example with a brief explanation of what you are looking for ? what wold be the exact entry criteria.... cheers Walter.

[adwebster]

Put simply, the financial paper I read every morning lists all the stocks that have hit a 52 week high the previous trading day. Provided they are in the main index I follow (eg. Nikkei 225, S&P500, FTSE 100 etc) they get purchased the next day, with a tight stop of a couple of %. If they get up by 4-5%, bring the stop up to breakeven and trail a stop from then on. Any thoughts?

[willd]

Many studies have been done on breakouts. You might be off, testing your theory on pullbacks to the 52 week breakout and then go long. Retracements give you an edge.

[walterw]

Yes adweb, what willd tells you its just about the most reliable method... I do daytrading myself and it works similar, taking the break it self can hurt you, there is a high % probability of pullback to the breaking level, after that a continuation would make it less riskier... cheers Walter.

[willd]

One other thought, is the 52 week high above or below the 200 day sma or ema. The 200 day average is a major average followed by institutions.