The Philosophy Behind The Woodyard Position Report

The Woodyard Position Report identifies short term trading trends in the pricing of stocks. The report provides specific stop loss values for both long and short positions. As a result, a trader does not need to WATCH the market as closely since the entry and exit prices for the stock is provided the night before.

The following shows how the process works.

The Legend is in the upper right corner and the numbers referenced below start in the upper left corner.

  1. Start monitoring the stock,
  2. At the $70.67 stop loss buy the stock long,
  3. At the $75.79 stop loss sell the long then sell short, profit on long is $5.12,
  4. At the $44.57 stop loss is buy to cover the short and buy long, profit $31.22,
  5. At the $47.50 stop loss sell long and sell short, profit $2.93,
  6. At the $49.00 stop loss buy to cover short and buy long, loss $1.50
  7. At the $43.25 stop loss sell long and sell short, loss $5.75,
  8. At the $46.01 stop loss buy to cover short, buy long, loss 2.76,
  9. At the $46.81 stop loss sell long, sell short, profit $0.80,
10. At the $29.42 stop loss buy to cover short, buy long, profit 17.39

At this point there is a total of $47.45 profit per share. Notice that the profitable trades on average made more that the losing trades lost and that there were more winning trades than losing trades. Calculations are based on all trades being made at the stop loss price and does not include any transaction costs or fees. The percent profit per share based on the initial cost is:

$47.45 divided by $70.67 = .6714 or 67.14% over about six months.

Assuming a charge of $10.00 per trade at an on-line broker, the costs of the 16 trades would be about $160.00. The table below shows the results for different numbers of shares:

  100 - profit $4,585
  200 - profit $9,330
  500 - profit $23,565
1000 - profit $47,290

The final profit if all the trades were executed until 11/08 was $82.36 per share. There is one other condition to be noted. Between steps 3 and 4 in the chart above the stock price started to reverse and go up four different occasions. Without the guide lines for the stop loss price a trader might decide to close out the short position at any one of the four reversals. But utilizing this report, resulted in additional profits being made by maintaining the short position for a longer period of time. This situation occurs repeatedly throughout the rest of the chart.

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