Trigger: BZUN Hits a Technical Trigger, Right Now
Trigger: BZUN Hits a Technical Trigger, Right Now
Date Published: 2018-08-21
Disclaimer
The 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.LEDE
Even though we can see that Baozun Inc (NASDAQ:BZUN) stock is up 366.43% over the last 2 years, in that same time frame, using a the CML moving average / momentum (Mammoth) technical signal with an empirically tested trigger, has created larger returns of 1035%.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.
As of 8-21-2018, BZUN has just triggered a bull mammoth pattern as long as it stays positive on the day (an up day). The company reported earnings about a week ago, fell off of the news even though it was a beat on both revenue and EPS. Since this is a Chinese ADR, and political news about the trade war could move it abruptly.
ANSWERS: Baozun Inc (NASDAQ:BZUN) 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 60 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 14 days from expiration. In this case, since BZUN only has monthly options, those would be the closest.
* Always avoid earnings -- irrespective of the trigger and momentum, this back-test closes 2 trading days before a scheduled earnings date.
* Use a 50% stop and a 50% limit (close the position if at anytime before the 14-day the call option is down 50% or up 50%.)
This is a straight down the middle bullish bet -- this trade wins if the stock rises and will lose if the stock does not.
EXPLICIT RESULTS
Owning the 60 delta call in Baozun Inc (NASDAQ:BZUN) over the last two-years but only after a CML Mammoth was triggered had produced these back-tested returns:
| BZUN Long 60 Delta Call Signal: CML Mammoth |
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| % Wins: | 61.7% | ||
| Wins: 29 | Losses: 18 | ||
| % Return: | 1035% | ||
Check it out Yourself: Tap Here to See the Back-test
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 1035% % back-test return, which is based on 47 trades in Baozun Inc. A bullish signal triggered from the CML Mammoth 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 Averages
The overall return was 1035%; but the trade statistics tell us more with average trade results:➡ The average return per trade was 28%.
➡ The average return per winning trade was 85%.
➡ The average return per losing trade was -64.5%.
Technical Details
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 HAPPENED
In a few mouse clicks and about 30 seconds, we identified a pattern that has repeatedly turned a profit over and over again. with a higher win rate than loss rate, and a higher average win % per trade than losing % return per trade.Tap Here, See for Yourself
Risk Disclosure
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.