Skip to main content

How long does it take Swing Trading Signals to achieve profitability?

We offer free Swing Trading BUY and SELL signals. This post looks into performance over time of the BUY signals.

Quick background. The TradeRadar Swing Trading Signals are primarily based on Bollinger Bands. For the BUY signal, we look for the closing price to dip below the lower band and then pop back up above the lower band. We apply a proprietary set of criteria to ensure that the "pop" was strong enough to suggest a viable BUY. We also use Williams %R to check whether the price is in the process of recovering from an over-sold condition.

The analysis --

I took the signals that were generated over the weekend on Saturday mornings as well as all the signals that were generated on Tuesdays and Thursdays. I looked at each set of signals separately and charted the results.

I looked at how many BUY signals were profitable after 1 week had elapsed, after 2 weeks had elapsed, after 3 weeks, etc. I used a weekly increment because we only run our tracking program on the weekend. This gives us a week-by-week status on our picks. A percentage (the left hand axis in the chart below) is generated by calculating the number of profitable signals divided by the total number of signals. (Yes, I admit it: not every single signal is profitable.)

This chart shows the results:

Swing Signals - Weeks To Profit
For Thursday and Saturday signals we start out with about 40% of the picks being profitable after one week. After four or five weeks, though, we are seeing that roughly 70% to 80% of picks are showing profits. Not a bad track record.

For the Tuesday signals, more stocks are profitable within the first week and the performance is more consistent as the weeks go by.

Final thoughts --

The analysis above leads to two questions:
  1. This analysis does not imply that every BUY signal works out the same since, obviously, not every stock is the same. Frankly, though, I was surprised by the results. I had expected that most picks would see profitability attained after 2 or 3 weeks and then the number showing profits would decrease. What's going on here?
  2. Many explanations of Swing Trading suggest that the typical holding period is a few days to a few weeks. The analysis presented above implies that stocks should be held for a somewhat longer period. Why might that be?
I suspect the answer to both questions has to do with how the market has been trending. Since March, we have had a strongly trending bull market. It has enabled the BUY signals, which were bets on the price cycle of the stocks in question, to continue to show gains over a longer period. The expectation was that the stocks would oscillate between their upper and lower Bollinger Bands but a general lift in the market is allowing many of picks to continue showing gains over the course of months.

This is another sign that for the last six months it's been a pretty good environment for investors.

If you're interested in following our Swing Signals, they are refreshed three times a week: every Tuesday and Thursday night and on Saturday.


Popular posts from this blog

Running TradeRadar on Windows 7 and Windows 8

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

Alert HQ has moved!

End of an era!

This site was started way back in 2006/2007 to showcase my blog posts and the Alert HQ buy signals and sell signals. Alert HQ grew to include other kinds of stock alerts including Swing Signals, Trend Busters, Trend Leaders, Cash Flow Kings and more.

In the meantime, I built a sister site, and I started using some of the same Alert HQ content over there. As a result, I am discontinuing the Alert HQ data here at

The good news, however, is that all the Alert HQ signals and stock screens are still completely free. In addition, the pages have been enhanced so that you can hover over a stock symbol and a small chart will pop up so you can get a quick look at the stock's recent price action. If you click on a symbol it will take you to a page with plenty of financial and technical analysis information (still free!) as well as a larger chart that you can play with in terms of adding or deleting indicators, moving averages, etc.

Click …

Durable Goods report for Sept just so-so but Computer segment is on fire

The Durable Goods advanced report for September 2011 was released on Wednesday.

I like to dig into the Durable Goods report because it can be useful for seeing how tech in aggregate is performing and how the sector may perform in the future. I always focus on two particular measures: shipments and new orders. Let's see how it played out last month.

Shipments -- 

I generally give less importance to Shipments since this is a backward looking measure reflecting orders that have been confirmed, manufactured and shipped. It's similar to earnings reports -- it's good to know but the data is in the past and we're more interested in the future. The following chart shows how September shipments looked for the overall tech sector:

Results for the overall tech sector were a bit weak but take a look at the next chart which tracks the Computers and related products segment:

Results here were actually quite good and, to make things even better, the previous month was revised upward.