Hey Guys,
Yesterday I emailed about how the market was at the bottom of a range near potential support, and it turned out that the support held and the market bounded upward from there. It's now back near the top of its recent range.
One of my trades from yesterday, PRVA, hit its profit target within a few hours. That's quite abnormal. Most of my trades last about a week. But every once in a while, a trade will take off. And yesterday there was unusual volume on PRVA and the price exploded midday.
An interesting thing about that ticker is that right after I bought the position and posted it to the website, the price went up almost immediately. Within minutes it was already almost 20% of the way to the profit target.
For some people it can be hard to buy a stock or option after it's already gone up in price since the time I posted it. There can be a feeling of having already missed the move. But as with everything else, I think that data can be used here to help guide our trading decisions.
I did a study to determine what the impact might be of being late to a trade, and this page shows the results of that study. What I found is that whether the price has gone up or down by the time you get to the trade, if you were to buy the position at the prevailing price, over time you might end up with similar profitability to me.
In other words, even if the price has already gone up by the time you get to it, there is data that still supports a decision to buy the stock. And yesterday that decision would have paid off (although as with all trading, there is never any guarantee of that).
And to me, the results of that study make sense considering that this trading strategy exhibits a raw edge in back tests.
There are no new trades yet today. If the market pulls back, it might improve our odds of getting some trading action.
If you have any questions or feedback, I'd love to hear from you.