[kimchi]

I use 3 systems for different investment vehicles, time-frames, and objectives. They are briefly:-

1. Long-term trend following (years)
I use my own version of a RSI against my own index of mutual funds to ensure I'm always invested in the best performing sector/region.

2. Medium term trend following (months)
I use a trend-folloing system - probably similar to Jesse Livermore's. This buys/shorts medium term breakouts and sells/covers short/medium term breakdowns. I have no price objective.

3. Short term swing trading (weeks)
I create a medium-term EMA channel around a stock or future's price and buy below a shorter EMA or sell above it depending upon the direction the longer-term EMA is heading. The price objectives are just inside the extremes of the channel walls.

The last 2 systems contradict each other, but since I use different markets and time-frames, they essentially (hopefully) increase my return/risk ratio. I trade tax-free derivatives for these.

An interesting point (for me) is that the first strategy is the simplest, takes 3 minutes per day to implement, makes only an average of 1 trade every couple of months, yet produces the greates profits.

I believe this is due to the high costs associated with trading frequently (commissions, spread, slippage, financing, etc. - even though I don't pay tax) as the last 2 systems could produce spectacular returns when these costs are stripped away.

Most of my money is invested in system 1, closely followed by a buy & hold stategy. The last 2 systems only attract a small % of my money as I'm still very much learning how to trade, and I've spent around 5 years studying, developing and testing them in my spare time. Most of the time was spent on risk management, although (worryingly) cannot be applied to system #1 for various tax reasons.

I only use EOD OHLCV data and MS Excel. I don't use any charting software, although I do use it to make discretionary trades using various indicators, including my favourite - MACD & histogram. This is probably -EV, although it's entertaining as those 3 systems are pretty boring to use. This small entertainment is probably +EV for my portfolio however, since it prevents me from being "entertained" using money ring-fenced for my other methodologies.