So this morning I sold ExamWorks Group Inc (EXAM) for a 10.71% profit after deducting commissions. This was using a swing-trade system I came up with using Bollinger Bands. I’ve since deprecated the system because I have other ones that seem to backtest a little better. The limited amount of forward-testing I’ve done with this system has yielded three wins, four losses, and three “paper trades” still in play. Unlike the paper trading however, I back up my technically-based stock picks with fundamental research. Just because a stock gives me a signal doesn’t mean I’m going to pick a likely loser.
One “problem” I’ve run into is that since I started trading with my eyes open (so to speak) back in October, I’ve sold four stocks, all at a profit. I have yet to have anything stop out at a loss! Am I a naturally-gifted trader with amazing innate talent? No of course not. It’s just a good time to be trading at the moment, and I’ve been mostly lucky, and very careful.
So I predict that EXAM will go higher, since they were recently added to the S&P Small Cap 600 and seem generally be strong. But what do I know? Anyway, my rules say “sell” so I sold, and I would be foolish to convert a swing trade into a long-term trade.
I’ll discuss my Bollinger Band swing-trade technique in a future post, and also why I don’t think it’s a good plan anymore.
Disclaimer: I don’t know what I’m talking about. Don’t follow my advice.