DOW Profits

Let’s take a look at the DIA 10 year seasonal chart and determine the best seasonal trades.

Looking at the above chart, you would Sell on Jan 3 and exit on Mar 11, then buy on Mar 11 and exit on May 15th, then sell on Jun 4, exit Juy 9, buy on Oct 27 and exit Dec 26. There would be a smaller trade in there as well but we will just focus on the larger trades for now.

If you had taken these trades over the last 10 years your winning percentage would have been 77.5%. The following table will give you the stats of these seasonal trades:

Net Profit	$18,263.12
Winning pct	77.50%
Performance	36.53%
Annual Performance	3.65%
# of trades	40
# of winning trades	31
Average profit	$675.65
Average loss	($298.00)
Profit/loss ratio	2.27
Buy & Hold profit	($1,196.10)
Buy & Hold perf	-2.39%
Buy & Hold annual perf	-0.24%

All things considered, these are pretty impressive figures. There aren’t too many trading methods that give you 77 percent winning trades. Most trading methods give you less than 50 percent winning trades! The above figures are from trading just 100 shares with each trade and do account for commissions as well.

We can greatly improve on those figures by using a simple stochastics indicator to insure that the market is in an uptrend before we buy and in a downtrend before we go short. Take a look at how the accuracy improves by using this simple indicator:

Net Profit	$18,783.40
Winning pct	82.50%
Performance	37.57%
Annual Performance	3.76%
# of trades	40
# of winning trades	33
Average profit	$623.92
Average loss	($258.00)
Profit/loss ratio	2.42
Buy & Hold profit	($1,196.10)
Buy & Hold perf	-2.39%
Buy & Hold annual perf	-0.24%

As you can see, seasonal trading can be very profitable and even more profitable by using indicators as a secondary tool to qualify the trade.

The same seasonal dates can be used to trade each of the 30 stocks in the DOW with a minimum winning percentage of 60 percent. However, it is much more profitable and the winning percentage is better when you use each stocks seasonal chart to determine trades for that particular stock.

Very soon I will be releasing an E-book with seasonal charts for each of the 30 DOW stocks. It will have exact trading dates and will give full statistics for each of the trades. So keep your eye out for this E-book. I will make a post when it is finished.

Joe Trader

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