Long Term Secrets To Short-Term Trading

Figure 4.1 A trading model that works. 

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Figure 4.3 Trade day of the week: Tuesday. 

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Figure 4.5 Trade day of the week: Thursday. 

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Figure 4.6 Trade day of the week: Friday. 
take buy and sells on certain specific days. To get a sense of this, Figures 4.2 through 4.6 show the buys for 
each day of the week, then the sells for each day, and finally we put together the best buy/sell days for a 
working model we can actually trade. 
The listings indicate the best days to buy have been Tuesdays and Thursdays, whereas the best sell 
days have been Wednesdays and Thursdays. Figure 4.7 shows that if we restrict trading to just these days, 
we don't make as much money, only $56,43 7, but just about cut the number of trades in half and boost our 
profits up to $173 on average, a number worth trading for. Your lesson here is that the Trade Day of Week 
(TDW) can make a big difference in your system's performance. Best yet, the drawdown plummets to only 
$3,500 from $10,031 and the accuracy jumps to 84 percent. This is a big improvement, as explained in the 
discussion of money management in Chapter 13. 

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Figure 4.7 Restricting trade days makes a big difference. 

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A Look at Volatility In the S&P 500 
Does this concept have application for the S&P 500? 
Although there can be no doubt about this technique working with a 50 percent volatility expansion, we 
can improve on it a great deal. How? By using something we already know about, the impact of TDW. The 
next set of data shows the volatility breakout performance by each day of the week for