The Brown Lady's Trading Secrets

I don't know who the Brown Lady of Raynham Hall was (or is) but her image reminds me of many aspects of technical analysis. If you look long and hard enough at chart patterns, Fibonnaci numbers, moving averages and a host of other technical indicators, patterns often emerge even where there are actually none.

Swing trading has it's place...especially in an uptrending market. But the truth is that the real $$ is made in the longer term market trend. If you happen to be on the right side of those moves, holding during those short term reversals, chances are that your one gain will exceed the sum of those short term swing trades. That is why I have been developing a system that leans toward the big picture.

Transition to longer term hold can take some time. It helps if you look at a weekly versus a daily 12 month chart. Viewing backtested results for the CMI 2.0 over the last year or so is also a big motivator....

BUY DATE SELL DATE P/L % WEEKS IN TRADE
8/18/09_ 01/16/09 ___ 45__________ 20 weeks
02/10/09 _03/04/09 __26 ___________3 weeks
03/04/09_ 06/08/09 __81 ___________12 weeks
6/19/09 _07/02/09 ___-2.5___________ 2 weeks
07/10/09_ 09/23/09 ___48 ___________10 weeks
09/30/09_ 10/15/09 ____4 ____________3 weeks

Notice the time (in weeks) for each trade. Spooky, I know, but the results speak for themselves.

So before you start searching for that next swing trade set-up, consider this different approach. It may save you time and effort, increase your trading capital, and keep you from seeing shadows and strange figures that are gone as fast as they arrived.