Market Breadth Primer: Advance / Decline Issues Bear Strike (Signal ID: AD Bear Strike)
Advance / Decline Issues Bear Strike is a day trading model based on real-time advance / decline issues. It is a very consistent mechanical trading model and a useful trading setup for discretionary traders. Similar to the Advance / Decline Issues Bull Charge signal, AD Bear Strike takes advantage of the leading nature of the changes in advance / decline issues to generate its signals.
The net gain in dollar chart for the raw model on 15-minute Emini S&P with a single contract. 1 tick slippage is taken into account per transaction (2 ticks per trade). $5 commission is also taken into account per trade (round-turn).
The raw day trading model stays in the market 7% of the time with winning rate at 53%.
Even without the 2008 bear market exceptional profit, this model is a stable performer. Except 2002, Bear Strike is profitable every year since 1999.
This model uses only the basic setup without using stop or target.
Other variations of the model will be presented below.
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