Price Headleys Williams % R- The Price Headley Way 2008

I was watching an online lecture. Price Headley He delved into one of his simpler trading methods today. He uses the Williams The %R indicator is set to 30.

The Here is my interpretation of his method with random equity selections during a recent period (picked randomly). My graphical representation of his methods is interesting in that it shows both a “win” You can also find out more about a “loss” This is to prove that the system is real and not a holy book.

One thing I’d like to highlight is the concept of “closing stops” It is different from standard automated “stops”. In this case, closing stops are, I believe, manual stop orders that are placed every day in the last 15 minutes. The The manual management of stop orders is necessary to ensure that intraday trading does not become a halt. Let’s continue with this example.

Let me first explain how I color code the vertical lines within these plays. Williams %R indicator. Blue is Signal Day, Confirmation Day. Green is Confirmation Day. Yellow is Re-test Day. Red Day. Signal days signify the upward (Bullish), or downward (Bearish), crossover of the Williams %R line. If it’s an upward crossover, then we take note. HighFor the signal days, wait for confirmation. A bar close to the signal-day high is a good sign. If it’s a lower crossover, take note. Low For the signal days, wait for confirmation by looking at a bar near the signal day low. In both cases, confirmations are only valid for as long as the bar is below the signal day low. Williams The %R line is NotThe line crossed backwards. If the line crosses back inwards then outwards prior to a confirmation day being issued, my interpretation is that we have a new signal date and corresponding high/low to confirm.

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Let’s take the first trade in my example. The First signal day confirmation was not issued before the Williams %R line dipped back inward. The second signal day (second vertical blue line), was activated. We then took note of the high that day and drawn the light blue horizontal trendline. Our confirmation day was two days after our signal. We entered our position at $59.82 at tail end of confirmation day. This is where we made note of setting an initial stop at $59.82. Low Our signal day at $56.86. Three bars later, we were confronted with a second test day as the day was over. Williams Crossed backwards by the %R line. We took note of this in the case. Low to the re-test day. We would then manually apply it as a closing stopped during the last 15 minutes each day, until we either stopped out of the market or the Williams %R crossed backward. In this case, the %R crossed backwards. After that, we could relax and enjoy the climb. On 7/8/08, we received another retest day and increased our close stop value to $67.39. Williams %R Again Crossed backwards, signifying that our ride wasn’t over. On 7/16/08, our final re-test day began. Our new retest day’s low was $70.27. However, as the market was closing in, the price was already lower than that value. We would not have manually issued our stop so the market would technically have closed at $69.44. The ride was a total of $6.08 and a $10.02 net gain in stock price. You can use “ThinkBack” On Thinkorswim I would have probably purchased the JUL08 64 call for 2.10. This option was last sold at 5.60 on 7/17. It netted $350 for an initial investment of $210 and took approximately 5 weeks to sell.

The second example was less fortunate. On the short side, a signal day was activated and followed by confirmation day the next day. At the close of the hour, we would have entered the position for $63.28. Two bars later Williams A retest day is initiated when the %R crosses inward. The new closing stop at $66.33 was noted to replace the $67.80 initial stop derived from our initiating signal day. The Williams We were relieved that %R had crossed back outward for a few days, but then another signal came through. The high of our new re-test day signal was the exact same as the previous re-test day ($66.33) so our close stop value remained the same and we sat tight to see if we’d make it another day. Unfortunately market close on judgment day wasn’t so kind and we stopped out at near close at $67.04. This ride ran from 8/11/08 until 8/19/08. I would most likely have bought the SEP0861 Put for 2.25. This option was last sold at 0.75 on 8/19. That’s $150 less than my initial investment of $225. It sold in just over a week.

So if you were to take into account both our win and our loss, we still netted $200 between these two plays, even though we weren’t always right, not too shabby!