The Stock Books: SWE Breakout and TREND-HOLD
Not financial advice. This is a research and paper-trading project. Any numbers here are examples from past data, not promises, and the rules come with no guarantee. Paper trade first and decide for yourself. Part 3. The starter pack has two stock books. Everything below uses the template defaults, which are my own choices. Change them in the strategy files, the scripts and the Desk together.
Not financial advice. This is a research and paper-trading project. Any numbers here are examples from past data, not promises, and the rules come with no guarantee. Paper trade first and decide for yourself.
Part 3. The starter pack has two stock books. Everything below uses the template defaults, which are my own choices. Change them in the strategy files, the scripts and the Desk together.
SWE: an ETF breakout book
SWE watches 20 liquid US ETFs on daily bars, completed sessions only.
- Entry: the close is above its 200-day average, above the highest close of the previous 20 sessions, and SPY is above its own 200-day average (a market filter).
- Size: shares = floor($1,500 / signal close). At most 8 positions, cash only, no margin. A full book means the signal is skipped.
- Order shape (by hand): a market-on-open buy at the next open, then a GTC stop at the signal close minus 2 x ATR14.
- Exit: a close below the lowest close of the previous 20 sessions, sold at the next open. The stop can fill first.
- Review line: -$3,000 from the book’s peak. At that point there are no new entries and I review the book.
TREND-HOLD: a monthly trend filter
TREND-HOLD is a second, calmer book over five ETFs. Once a month, on the last trading day after the close, each ETF is IN for the next month only if it and SPY both closed above their 200-day averages. Otherwise it is OUT. Changes happen at the open of the first trading day of the new month. There is no stop and no target: the month-end check is the only exit.
Size is $2,000 per ETF, fixed. The review line is -$2,500 from the peak.
The same ETF can sit in both books. The account then shows one combined position, so the journal keeps the two apart and the daily task cross-checks quantities.
Backtest numbers: examples only
These come from my own backtests on past data, with costs included, and the template says to rerun them with your data, costs and dates. Treat them as examples of what a run looked like, not as what to expect.
| Book | Example, long past-data test |
|---|---|
| SWE | profit factor about 1.5, drawdown up to about $3,000, a losing year about one in five |
| TREND-HOLD | worst drawdown about 18% in the example, flat years common |
The paper test is about process, not profit: every signal logged, every order entered on time, no rule breaks, fills compared with the official open. TREND-HOLD only changes about 4 to 5 times a year, so it cannot prove anything about profit in a few weeks.