Domistock Tools Used: Auto-drawn Support/ Resistance Lines & Trendlines, Inflated/ Deflated Expert Symbol, DomiStock Trading Strategies Exploration, DomiStock’s Technical Rating System
In a couple of my yesterday’s posts I demonstrated one money making trading technique I use with both daily and intraday charts. It is one of DomiStock’s automated strategies (there is an exploration that scans for plenty different techniques and informs the trader which one is the best at any given time) and its called the “Long the deflated winner” strategy.
It involves an A rated security that got deflated. Yesterday’s live example with 60 min chart bars has already produced a good profit. But the last similar signal for SPY on the daily chart, has produced a much bigger one. Indeed, on the 6th of July DomiStock produced a price deflation alert while maintaining SPY’s rating a solid “A”. Hence the “Long the deflated winner” strategy activation. One could have tried the same trade on the 27th of June price deflation alert and still make a good profit. But the second alert was at the exact turning point.
So in a nutshell, when a A rated security becomes deflated, there is a high probability that a good trade is hiding around the corner. This is the base of the “Long the deflated winner”. And it really is a money making one.
Last but not least, there is an amazing exploration that scans securities to find those that meet one of DomiStock’s Strategies criteria. If all criteria of a trading strategy are met the scan returns a value of 100%. On the other hand, if no criteria of a trading strategy are met the scan returns a value of 0%. In any other case the scan returns a value between 0 and 100%.
The DomiStock Trading Strategies in this exploration are:
1) Long the Deflated Winner (Col A),
2) Long the Deflated Neutral (Col B),
3) Short the Inflated Loser,
4) Short the Inflated Neutral (Col D),
5) Climb the Trend – Long (Col E),
6) Climb the Trend – Short (Col F),
7) Contrarian: Long the Loser (Col G),
8) Contrarian: Short the Winner (Col H).