LONG - Dow Jones Industrial Average (DJI)

15 mars 2020

Hi there!

This idea/trade is pretty simple and it comes up few and far between. It is strictly based on price and nothing else. Human nature never changes and it's interesting that the two times this has happened in the past were also during "panics". These trades typically last a few months so just keep that in mind. The details are below.

All the best,

Andre

CHART INTERVAL
2W (2 Weeks)

THE SIGNAL
When the close is more than -3 standard deviations below the 20 period linear regression on this time frame, it indicates an amazing long opportunity. The exit is a 2W close above a 10 period simple moving average.

THE RESULTS
This has only ever happened twice:

First Time

• Entry: November 11 1929 @ the open (220.39)
  
• Draw down: -11.36%
  
• Run up: +24.78%
  
• Exit: February 2 1930 @ the open (270.54 +22.76%)
  

Second Time

• Entry: October 26 1987 @ the open (1839)
  
• Draw down: -5.72%
  
• Run up: +13.00%
  
• Exit: February 29 1988 @ the open (2032.20 +10.51%)
  

THE RISK
As you can see from the trade draw downs the maximum is -11.36%, of course it is absolutely possible to exceed that.
**Important: Remember that leverage increases the draw down number... i.e -11.36% with 3x leverage is -34.08%***

10 juin 2020

Note

This trade has officially closed as of Monday this week at the open.

Result: +30.19%

Entry: 20,917.53
Exit: 27,232.93
Trade Low: 18,213.65 (-12.92%)
Trade High: 27,338.30 (+30.69%)