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THE MARKET WHISPERER 32 5

above. Here are the details:
o Successful trades: 41
o Failures: 3
o Success rate: 93%
o Average profit per trade: 0.4%
o Average hold time per trade: 5.07 days
o Overall period profit: 17.6%
• Parameter change: the Achilles heel of any trade strategy is its sensitivity
to minor changes. A slight change of parameters can bring about

considerable change to outcomes, but may impinge on the method’s

reliability. If, for example, you change this method’s parameters to 20
periods and SD 1, you will find that the success rate stands at over 90%!
Is this method also valid for single stocks? Yes. Instructions follow:
• Buy point: Buy the stock that belongs to the NASDAQ 100 the morning
after it closed beneath the lower Bollinger Band, on condition that its
new opening price is still lower than that band.
• Sell point: Sell immediately when one of these conditions is met:
1. At the end of any day of trade when the stock closes higher than your

entry point (even if that is on the same day you made the purchase);
OR
2. When 20 trade days (one month) have passed.
• Outcomes: during the four-year period I checked, from January 1999 to
January 2003, a total of 3,870 trade opportunities upheld these criteria.
Details for that period as follows:
o Successful trades: 3,684
o Failures: 186
o Success rate: 95.19%
o Average profit per trade: 2.77%
o Average holding time per trade: 3.06 days
o Sequence of successes: 121
o Sequence of losses: 3

Summary

Not bad at all!

Results can be improved if one is willing to increase the risk and

operate as hedge funds do, using margin to double and even quadruple

their outcomes. No large investment is needed to execute 44 NASDAQ QQQ

trades over a period of three years. Any sum of money is suitable, and the

risk is relatively small.