SATS5 Trading Expert Results

Trading daily bars

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SATS5 is mainly designed to trade long positions, but also gives short trade signals during a long term downtrend.

Let’s first have a look at the evolution of the S&P500 index during our test period October 2004 till August 2010. A buy and hold strategy of the 500 stocks in the S&P500 would have made no profit.

The United States Steel Corp example in the next figure shows the price evolution in the lower part and the SATS5 equity curve at the top.

The first buying point was October 26, 2004 at $37.45 and the last closing point was August 4, 2010 at $48.08, a period less than 6 years. With an initial capital of $1,000 you would realize a buy and hold profit of only 28%.

Using SATS5 and trading long and short, there is a total profit of 968%. Also note that with a buy and hold, the highest portfolio value was $3,564 and the lowest $368. With SATS5 the highest was $11,294 and the lowest $964 in this period. Definitely a whole lot better.

As long as there are green bars (or candles) I have an open long position.

Contrary with red bars I am out of the market.

With black bars I am short.

Looking at some details in the next figure, watch how short trades are avoided in an uptrend, because they are generally not profitable.

However, in the figure below, you can see profitable short trades during a long term downtrend.

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