'NDX 1st DOM' generated a Long Entry Signal for Thursday's Close, 10/1/2009

'NDX 1st DOM' generated a Long Entry Signal for Thursday's Close, 10/1/2009. This model is based on the behavior of the NDX on the 1st calendar Day of the Month (DOM). It is due to be exited at Friday's Close unless its Money Management Stop is hit intraday.

As can be seen from the Equity Curve shown above, the model is currently trading a few ticks below its all time high. However the three most recent trades were stops.The model uses a very tight Money Management Stop, currently 0.50% below the Entry Price. I only took a 50% position (3 NQZ09 @ 1665.50) instead of a full position (6 NQZ09) for this model tonight. I am already long some NQ based on tonight's 'BTD Index' (1 NQZ09 at 1665.00) long entry signal, as well as a re-initiated NQ discretionary swing trade (2 NQZ09 at 1695.38). Additionally, with all of the volatility this week and the Payroll report due pre-market, I don't want to take the chance of getting stopped out for more than the model theoretically calls for (0.50%). Again, like many times this week, I am being influenced somewhat by fear. So far, I say this influence has benefited me this week. However this can't continue, I will under perform one of the systemic models sometime soon.

Here are some of the model's Performance Statistics:

• Model Tracking Vehicle=NDX
• Start Date=11/1/1985
• Number of Trades=116
• Average Trade Return=0.39%
• Average Winning Trade Return=1.24%
• Average Losing Trade Return=-0.47%
• Win Rate=50%
• Ratio of Average Win/Average Loss (RAWAL)=2.63
• Profit Factor=2.68

The win rate is only 50%, but the average winning trade (+1.24%) is 2.63 times as big as the average losing trade (-0.47%).

Disclosure: Long NQZ09.

Disclosure: The performance results shown above are for Model analysis purposes and do not include commission or slippage. The model is built on data from the NDX, but I trade the model with the NQ e-mini. Actual trading results from the NQ usually differ from the model results of the NDX, with the NQ showing somewhat weaker performance data. Nonetheless, I still trade this model with the NQ and when executed according to the plan, it has generated consistent profitability for me.

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security...trade at your own risk***