A Diversified Trading Plan

I found some interesting things I wanted to share because I would like feedback on my thoughts and conclusions.
In my recent presentation “My Trading Plan”, I described how I had morphed from “There is No Holy Grail” in October 2019 to “But there is a ‘Holy Horse Race’ theory.” in November 2021.
I use the horse race comparison because:

• The jockey represents one specific strategy. And an unprepared or ill fitted jockey can cause any horse to lose.
• The horse represents money management, trading research and everything else that supports the jockey in winning a race.
• I believe there are many different “flavors” of strategies. Most of them are well known to behave better (or worse) in particular markets. The “flavors” I’m now working with are:

1. Momentum Oscillators (Known best for sideways markets.)
   a. RCI (Spearman’s RCC)
2. Trend Following
   a. Moving Averages (Two MA Crossing)
   b. ADX + DMI Smoothed (Recently introduced by Steve P.)
   c. Alex Trend Strategy
3. Breakout Methods
   a. Darvas Simple Box Breakout
   b. Donchian Channel Breakout (Can also be used to profit from Mean Reversion.)
4. Buy on Dips (Totally foreign to me. I have always been a Breakout Guy)
   a. Alex Dip Strategy
   b. RRG Strategy
5. Trend Lines
   a. Manually Drawn Trend Lines
   b. Program Drawn Trend Lines (Will be teaching this code to Beginner’s Class next week.)
6. Volume Strategies
   a. Alex Volume Slope Strategy
7. Trend Reversal Detection
   a. Turtle Soup (From text Street Smarts)
   b. Turtle Soup Plus One (From text Street Smarts)

Number 7 is still in the coding and testing stage, but all the other “Horses” are in the Starting Gate. All systems are run with the default Indicator / ShowMe / Strategy settings. None have any optimization. I expect that to be developed over the next few months.
To avoid complications, I have chosen for the near future to only trade in a very limited number of stocks. They are: NAIL, SPXL, TNA & UDOW. As the system proves itself, I hope to add others, primarily stocks with little or no correlation to these four. This will allow me to use diversification to improve overall results.

My Mission, over time is to:

• Get each of the strategies above ready for initial testing and trading. (Done for Items 1 through 6)
• Optimize as many strategies as possible using generally accepted optimization practices.
• There are 13 Horses in the race. The concept is to feed the winners and starve the losers. Meaning either fix what is wrong with a Horse, or remove that particular Horse from the list.
• I also expect to experiment and test other strategies and categories of strategies to have a well rounded “Stable” that provides a satisfying income. Almost there… I just need to explain the attached spreadsheet and then you will have enough info on what I’m doing to ask your questions, or provide comments or suggestions. Next… Print the spreadsheet. (In color would be best if you can, because “BARS (DAYS) SINCE LAST SIGNAL” are color-coded by age. Here is the description of the columns: TradeStation Workspace: Each of the 13 strategies above has its own WorkSpace in my Right-Hand Computer Screen. WS: I numbered the 13 strategies where the first digit is the Strategy Category and the next two digits are the number within that category. TNA, SPXL, NAIL, UDOW: These four middle columns contain the date of the most recent Buy or Sell signal using that strategy. I went through each strategy for every stock and recorded the date of the last Buy or Sell signal. There was only one Sell signal, UDOW on 13 October. All the rest were Buy signals. Two examples:
  1. There was a Donchian Channel (Row 302) Breakout BUY signal for all 4 stocks on 19 October.
  2. The most recent Buy/Sell signal for NAIL using the Alex Volume Slope Strategy (Row 601) was a Buy Signal on 19 October.
     The right-hand four columns gave me the most interesting results: (All numbers are to be read: This many days before October 29 (last Friday), the stock above displayed a Buy/Sell signal from the strategy to the far left of this Row.
     You can now make some statements about the data, such as:
     The three strategies 203, 501 & 502 triggered Buy signals on all four stocks two to three weeks BEFORE the other strategies. This appears to be significant, because “leading indicators” can often provide better entry points. But this needs to be tested and examined.
     Three or four of all four stocks triggered a Buy signal using five different strategies, all within the 3 to 6 days ago time frame. (Perhaps indicating a Major Market Move instead of a surge in just one stock.)
     All strategies seem reasonably consistent in picking Buy points either last week and about 2-3 weeks ago.
     Now to the questions:
     Does the general approach I described seem sound to you? (Explain your answer.)
     What comments or suggestions do you have?
     If you are interested in using this type of approach in your own trading, let me know and we might be able to work together towards that goal:
     RoboticsProfessor@gmail.com