Andy,
Kudos to you for having the courage to report those two trades and to call them mistakes.
I tried to reproduce your trade on ENPH, but couldn’t, because we don’t seem to be working off the same charts. So here’s how I’d have traded ENPH using Quill’s rules, but with my default format of hollow candle sticks, where the green arrow is the day of entry, and the red arrow is the day of exit, both trades done with a market order at market open. By my calcs, the trade would have offered a 4-day gain of 2.09%, which is decent enough money, for reasons I’ll sketch below.
Here’s ENPH done with HA Smoothie where the MA type is BarChart’s default, and the period of the MAs is ‘3’.
Here’s ENPH again, but this time done with PARTP added, which would get a person in and out on the same days as if hollow candlesticks were used, which suggest that there’s a lot of ways to do this stuff, and that they might not make much difference. In short, Chef’s Choice as to how you built your charts.
As for SWAV, I’d have gotten clobbered, too, which means that Quill’s rules need to be reviewed, though not necessarily revised if extensive back-testing shows that, on average, the rule set offers a positive expectancy. My gut feeling --from looking at a lot of charts-- is that the rule set shouldn’t be messed with. But I haven’t yet done the needed back-testing.
Aside: There are 52 weeks in a year. But markets close roughly 10 days a year. Therefore, there are roughly 250 days a year that trades can be placed. The avg historical return for stocks is around 10%/yr, or 4 bais points (bps) per market day. If you make 2.09% in four market days --not calendar days, market days-- , then you’re averaging ~52 bps/market day, which projects to ~130%/yr, which is decent money and total nonsense for this reason. You aren’t betting the whole of your account on every trade, nor are you continuously in a trade. But a 4-day trade that gains 2.09% means that money can sit idle for another 48 days, and you’re still on track to make a journeyman’s 10%/yr on that portion of the account.
Knowing that should take off the pressure to be always trading, and it should help a person follow Quill’s advice to “be the spider, waiting to pounce on only the best setups.”