Strategies for All Occasions For the majority of traders starting out, trading the long side of the market (i.e. buy ing to sell at a higher price) is the only strategy considered. But trading with a long-only bias can leave you blinded to the opportunities on the other side of your trade. Trading on only halfthe story can mean missing out on big gains, particularly when trying to fight the 'wrong side' of the market. TheZignals Trading Strategy Builder allows you cover the full story by allowing both short and long strategies. Because building a strategy is free you can create two strategies, one long - the other short, and trade the signals together. Because strategies are s eparate you can create one with a diffe rent exit strategy than the other, allowin g you the flexibility to offer tighter stops in a short strategy when price collapses are fr equentl y short and shar p, but loosen the reins and look for bigger profits (profit target) when trading the long side. The only caveat with this format is the performance data of each strategy will only reflect the long or sh ort side of the picture. The actual performance of this strategy traded side-by- side will be different. For starters we will use the Nasdaq ($NASDAQ) and Russell 2000 ($RUT) as test indices. These two indices are compiled into a single stock-list I have called 'Indices' (i.e. this will be strategy where the signals will act on both indice s). For this article we will again be edit ing the Target&Stops so for a sta ndard rule we will use the MACD crossover; the default 'MACD Signal Buy' rule for our long strategy and the default 'MACD Signal Sell' rule for our short strategy. While we will be making changes to our Targets&Stops in our Setup leave the default for now, but set the Delay between trades to zero. Don't forget to set the strategy type to 'Short' for the MACD sell rule and 'Long' for the MACD buy rule! The backtest will run from November 12th 2008 to November 12th 2010. As an initial test, running both strategies with the default Stop Co ndition generated the following results Target: 15%; Stop: 10%; Trail employed; Target: 10%; Stop: 5%; Profit Target: 25% Long StrategyShort Strategy No. of Signals 18 16 Winning Signals 78% 19% ROI 9.7% -4.8% No. of Trades 10 11 Winning Trades 60% 18% Net Profit 1 5.3% -5.5%
