%POL has some very clear patterns lately and its price action is speaking clearly to its role in several Macro plays. PolyOne Corp is a key stock in my 130 stock universe, they make irrigation piping and other products for horticulture,farming, industry and building. As a member of the materials sector you’ll be holding %POL if you think the world is heating up and irrigation will play and increasing part in farming or if you believe smart money is hiding from deflation in rural land and rural demand for %POL’s products will continue to grow, or if you believe water will be the key resource of the 21 st century then you’ll be holding.
To trade %POL I use a strategy I call “A love Letter with Two Envelopes” Over the last 130 days i’ve had 11 trades for 7 wins
As usual I will only ever take a position that’s 6% of my total balance and enter long when the price moves through the 5 envelope. I set up my chart with two envelopes and 4 emas, using tzolkin or solar cycle time of 5,13,26,130 and 260.
For %POL I place a profit exit target of 12% but this can be adjusted depending on the equity ATR to as low as 3% Risk management is done by the 5 sma and/or the 26.5.2 envelope, when price crosses and closes on the daily chart we exit the trade. Caution : Do not use this strategy with a market who has broken sma 130
Below is the last 130 days of trading %POL backtested with a trade size of 5k USD. Hope this helps, best to keep a small placeholder when you’re out of the trade to stay with the beat of the individual issue. Big shout out to all the european forex traders on twitter who help me get some early recon for my trading day! Cheers
Indicator # 1
Name Envelope : Price Cross (5, 1, 1)
Trade Action Long Entry
Indicator # 2
Name Envelope : Price Cross (26, 5, 2)
Trade Action Long Exit
Indicator # 3
Name Moving Avg – Simple : Price Cross (5)
Trade Action Long Exit
Trade Exit
Profit Exit 12%
Stop Loss
Trailing Stop
Bar Size Daily
Back test Bars 130
Commissions (Equities) 8
Sharpe Ratio Risk Free Interest Rate 1.5%
Strategy Performance Details: Performance Summary
Symbol POL
Strategy Love letter with two ENVELOPES
Test Date/Time Friday, 09/17/2010 14:59, Fiji Standard Time
Bar Size Daily
Back Test Bars 130
Start Date/Time 03/15/2010
End Date/Time 09/16/2010
Closed P&L $1,870.75
Open P&L $81.94
Performance % 3.91%
APR % 7.71%
Buy & Hold P&L $1,190.48
Buy & Hold Performance % 2.38%
Buy & Hold APR % 4.70%
Sharpe Ratio 1.67
Total Trades 11
Winning Trades 7
Winning Longs 7
Winning Shorts 0
Most Consecutive Winning 3
Average Winning Hold Time 6.0
Total Winning Hold Time 42
Average Winning Profit $ $452.79
Maximum Profit $ $715.40
Lowest Winning Profit $ $77.87
Losing Trades 4
Losing Longs 4
Losing Shorts 0
Average Loss $ -$324.69
Maximum Loss $ -$729.23
Lowest Loss $ -$125.00
Average Losing Hold Time 2.8
Most Consecutive Losing 2
Average Profits $/Average Loss $ 1.39
Total Losing Hold Time 11
Out of Market Average 5.9
