Netflix Just Triggered a Bullish Technical Signal
Date Published: 2018-09-06
DisclaimerThe results here are provided for general informational purposes, as a convenience to the readers. The materials are not a substitute for obtaining professional advice from a qualified person, firm or corporation.
LEDENetflix triggered a technical entry for the CML bull Mammoth model today, 9-6-2018, for end of day back-testing. This signal is quite volatile, so be aware of that reality, -- but over the long-run, has proven to be successful, while having a win-rate slightly lower than many of our back-tests.
There comes a point, after all the charts that are shared on CNBC and social media, when we simply must examine, in truth, whether technical trading has actually worked in the past, and if so, which signal, how is it generated, and what are the historical results -- explicitly?
We are looking for answers that are empirical and explicit, not just lines on a chart, not one example that looks good.
ANSWERS: Netflix Inc (NASDAQ:NFLX) CML Mammoth Technical Trigger
The idea behind all of this, and all technical analysis, is that past price behavior and key levels are watched by so many people, that patterns can repeat, and if those patterns can be identified ahead of time, they can create higher probability trades than those entered without them.
The breakout from the CML Mammoth attempts to find these bursts -- based on tens of thousands of historical trades and machine learning.
The goal, of course, is to find these breakouts before they occur and to scan the market for the best historical performers.
Rules* Open the long 70 delta call (in the money call) on the day the CML Mammoth has been triggered and coincides with upside momentum of at least a 1% up move.
* Close the call at expiration.
* Use the options closest to 15 days from expiration.
* Always avoid earnings -- irrespective of the trigger and momentum, this back-test closes 2 trading days before a scheduled earnings date.
This is a straight down the middle bullish bet -- this trade wins if the stock rises and will lose if the stock does not.
Owning the 70 delta call in Netflix Inc (NASDAQ:NFLX) over the last five-years but only after a CML Mammoth was triggered had produced these back-tested returns:
The mechanics of these back-tests and everything in the TradeMachine® are such that it uses end of day (EOD) prices for every trigger, both entry and exit.
We see a 502.4% back-test return, which is based on 40 trades in Netflix Inc. A bullish signal triggered from the CML Mammoth doesn't necessarily happen often, but it is designed to objectively pinpoint the beginning of a short-term period, using moving averages, momentum, and volatility oscillators, when a stock is likely to move higher.
It's a model based on several indicators rolled into one signal and is based on probabilities, not absolutes, so it won't work all the time. The full details, including not only the empirical modeling but also the full closed form equation, and live scans for breakouts, are all available to CML Trade Machine members.
Looking at AveragesThe overall return was 502.4%; but the trade statistics tell us more with average trade results:
➡ The average return per trade was 29.95%.
➡ The average return per winning trade was 103.05%.
➡ The average return per losing trade was -59.4%.
Looking at the Last YearAbove, we examined a back-test that spanned several years, but we can also look at the most recent year, using the same model and rules:
Over the last year we see a 729% return and a 71% win-rate.
➡ The average return for the last 1-year per trade was 66.5%.
➡ The average return over the last year per winning trade was 133.11%.
➡ The average return over the last year per losing trade was -100.03% (that means a full loss and commissions).
For the details about the CML Mammoth model, what is included in it (exactly), how it works, and when it's triggered, using Trade Machine you can learn about scientific technical trading from the link (which leads to a short video).
What HappenedIn a few mouse clicks and about 30 seconds, we empirically identify a pattern that has repeatedly turned a profit over and over again, then displayed those results with no room for confusion or doubt. You can tap the link below to become your own option expert.
Tap Here, See for Yourself
You should read the Characteristics and Risks of Standardized Options.
Past performance is not an indication of future results.
Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment.
Past results are not necessarily indicative of future results. The risk of loss in trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.
Please note that the executions and other statistics in this article are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity and slippage.