Archive for May, 2011

May 27, 2011 Leave a comment

MACD 12,26,9

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Important insights from one of our workshop participants this week:  a ton of good learning inside these ideas

Our initial stop placement reflects the information available when our trade is initiated. Any price action after the trade provides additional information and can be used to update the stop placement. An example is the use of the MACD histogram to exit before taking a full 1R loss.

If your system is designed to catch singles, don’t wait for the home run before exiting. Take the single and move on (until you can recognize when the market is making it obvious that this time you should hold on for more).

Markets may have unique characteristics that should be taken into account when making framing and trading decisions. DBA, for example, can be framed with tights stops, seems to make orderly moves, and sees more action only after the opening of the grain futures markets.

Framing trades with tights stops right after the open feels like getting caught in a dolphin hunt (the underwater tornado). The lunch and afternoon sessions tend to provide a better environment for identifying trades using the WMB method.

The importance of understanding the type of move you’re trying to capture (F –> C; B –> A), and matching your entries/exits with that type of move.

After learning how to trade large index ETFs (IWM, SPY…), index futures provide a way of using the same skills to produce higher returns. 

Respect the R.

Opportunities are available any time the market is open. 


defining critical price levels for any trading target

May 22, 2011 Leave a comment

The global maximum is the point at the top

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Price levels you should know for any target in your asset allocation strategy

  • Minimum mandatory exposure
  • Minimum price level indicating RS momentum advantage
  • Limit of Maximum rational outperformance
  • Maximum outperformance in the lookback period
  • Maximum outperformance since the target began trading
  • Your estimate for next new high?

pre-market call on silver

May 18, 2011 Leave a comment

the overnight session in precious metals was strong, and given the “maxpain” and oversold condition of silver, we ar  prepared for an upward-trending momentum day in silver. An intraday move of 7% in silver is normal these days (between low of the day and high of the day) which translates to a move greater than $2

1st hour statistics for high of the day & low of the day

May 17, 2011 Leave a comment

The main trading room of the Tokyo Stock Excha...

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some analysis in our chatroom today examined hundreds of symbols (ETFs and large cap stocks) that make their high of the day or low of the day in the first hour of trading.  To our surprise there are a considerable number who’s probability of an early high or low of the day is greater than 95%.

That’s a staggering number, especially when we examine how much follow thru after the first hour there can be;  we’ll be working this up into a tarding staregy pretty quickly because we like the odds and the additional control it gives over our trading, once the morning shenanigans at the open are past

weekly themes: defensive sectors, consumer staples

May 15, 2011 Leave a comment

all of the globsal indices are testing double bottoms, while all 4 iof the main US indices are stronger

the lack of multiple day follow thru has really favored individual companies at the expense of indices

Clear winners have been old boring stocks like: JNJ, KFT, MCD, WMT  with INTC in the techs showing real strength as well

Categories: education, Markets

charts of interest link

May 15, 2011 Leave a comment

daily report review link

May 15, 2011 Leave a comment daily report review link

Categories: Markets, Teaching, trading