Author Topic: Using weekly signals for ETF??  (Read 1736 times)

0 Members and 1 Guest are viewing this topic.

Offline Singhy

  • Newbie
  • *
  • Posts: 5
Using weekly signals for ETF??
« on: 06/11/2019, 07:19:15 PM »
Hi Team,

I've been playing around with Beyond Charts.  When we select a security/ETF we can select either daily/weekly/monthly charts.  I have noticed that there are entry and exit signals on the weekly charts.  At first I thought this was an error but upon further research it seems as though this gives an even better edge than the daily signal (for ETF's anyway).  I don't have USA data but I looked at XJO over a 5/10/25 year timeframe and the system seems to protect you against those large downturns while leaving you to ride the waves and collect dividends along the way.  These weekly signals seem to work for IVV/IJH as well.

I guess the question is, is this intentional or merely a by-product of software coding?  Am I right to say that we could use these weekly signals for entry/exit trades?

Looking forward to hearing your thoughts.

Offline Dave McCulloch

  • Lead Educator
  • Administrator
  • *****
  • Posts: 47
Re: Using weekly signals for ETF??
« Reply #1 on: 08/11/2019, 11:24:25 AM »
Hi Singhy,

Thanks for your question.

The SPA3 Investor methodology has been researched on daily price action and as such the strategy should only be used on daily charts as that's where the edge is.

Whilst you can see the signals displayed on weekly charts the systems is designed to be used on daily charts only. The signals on weekly charts occur much later than those on the daily chart and as such mean that entries and exit signals are quite delayed.

Because of the later signals it means that end of trade drawdown is likely to be much higher  and it also means that entries occur much later resulting in lost potential growth.

When looking at weekly charts though you can see that the use of the ATR trailing stop can keep positions open for a longer time, but again there's missed opportunity on both sides of the getting in late and out late.

Having said that a very small number of customers do use the weekly signals, but it's not the optimal way to use SPA3 Investor.

If you need any further clarification on this Singhy, please feel free to touch base with me.