About trading

December 7, 2011 Leave a comment

I see Salad is on fire, he is relentless. with posts and trades.

I dont have time to post charts today.

I closed my gold position from 1741 at 1748 ( I was staying on a loss for a few days) .

I entered gold again close to 50DMA, at 1712…. Miners about the same time.

I guess Salad covered the direction with charts and meaning.

 

I dont like how USD behaves but the SPY looks like it is close to go over the 200 DMA, so we will know shortly if the next few days are rewarding for the patient trader.

 

——————————————————————————–

I want just to say a few rules I imposed on myself about trading:

— discipline. This needs to touch or involve at least the following:

Entries: are you patient enough to get your entry point? It does not matter how do you decide, what system you follow, bu this is a must. OOOhh this covers the first principle: buy low and sell high. BUY LOW AND SELL HIGH.  Is this easy? Think about it? Is your mind trained to do this? If not, then what you gonna do about it?

Exists: you need to sell high: Where is high?  A good principle is to follow the Salad principle:  Sell when they cheer.  Think if you can do that.

Both principles above go hand in hand with this:

As a trader you need to be able to let the train go, this goes well with discipline and risk management.  What train you may ask? If you need to know the answer, then what can I tell you 🙂

Now the real part starts:

Risk management: If entries and exists are hard, let me tell you this is the hard stuff.  Most of the experienced traders will say they are able to come out unscratched even if the entry was really bad. Why? Because they understand risk management.

What risk management involves?

position management. Depending on your capital and greed level, this may save you or break you. Do you know how to do this?

— are you able to let it go? meaning, you have a bad entry, the price comes to your level, close but not quite there, are you able to get out with just a small loss when you feel you are on the bad side?

stops, do you use them? on the long side you have the Fed on your back, on the sell side you have time speed. Think hard about this? Can you use a time stop? Do you have a stop to get out? How is this based? On levels, trendlines or what? This is important, because it is the barrier between you and everybody else who wants your money on the market. How do you calculate the stop level?

cool head: Do you have patience and can you be cold enough to follow your system and rules?

— does it look easy or hard when you enter a position?

Trader type definition

How do you define yourself as a trader? Can you?

  • Some of the traders on the Internet blogs are cowboy traders, they shoot from the hip and wait to see the results.
  • day traders with different expertise.
  • system traders, I am 75% here
  • swing traders: I am 25% here too. Not more than that because I fell at this stage I am going mostly on the long side. So not a real swing for me.
  • pattern traders. This works more than you know. But it needs a special system to find patterns and a lot of study.

Bull or short? Can you do both? Really?

Day or middle/long term trader? Why? How is your personality copping with this?

Good luck…

 

 

 

 

 

 

Advertisements
Categories: Miss Market

Santa or Benny Rally?

November 30, 2011 Leave a comment

Hi,

From Chop Chop we got a bearish week behind us.  The Turkey gods did not help the bulls last week and the $ had to be brought down by Central bankers from all over the world.   Of course being a bull today felt good, but I still had the same sensation in my stomach as during the flash crash last year.  This whole intervention thing feels bad from multiple points of view but then again, what they are supposed to do, to let the whole house of cards just fall down ?

Think very hard about this, what are their choices?

Let’s go to charts:

USD 1D:

On dailies, the $ looks almost bearish but not yet:

  • the osc is still high
  • the sell volume bars were small
  • sentiment is at 45
  • MVO bull is eliminated

On 2D, the $ has the same problems. We need to wait a day or 2 before we will know if the oscillator volume accumulation will be eliminated or increased.

So, for the $, we may have a start of a bearish cycle but not quite there.

RUA 60 min:

On 60 min, the RUA is in a nice bull, once the MVO starts to fall, then we have our first warning.

RUA 1D:

As you can see, on dailies, the osc did not pass to the upside yet.  Maybe in a day or 2 we will have a better picture, but not yet.  WE have a start of a bullish cycle, based on buy volume and hist pass on ST and LT.

Gold 1D (HUI) :

Gold 1D (HUI) gives a better picture about the start of a new bull cycle. The buy volume bar today was good and the sentiment is pointing UP.

Gold 2D:

On 2D, HUI has a start of a new MVO bull, the hist looks like it wants to go towards the bull side. The sentiment points UP from oversold.

Gld, has almost the same structure as HUI.

My take is that we are close to the start of a new bull on RUA , gold and miners.  The only thing that is missing, the $ bear cycle is not clear yet.  The bulls have on their side the whole central bankers policy and seasonality.  The bears have on their side the stinky fundamentals.

Let’s not get carried away with politics and stick to the price and volumes.

Based on the intervention we should have a higher high than here and then maybe a clearer picture in a day or 2.  For spx, the 200MA is at 1265, close enough to have a run in the next days.

Can this rally be sustained until the end of December?  We dont know yet and for sure the volumes are not supporting this theory yet.  We have a start for a bull cycle today, but given the intervention and the last week pattern (with half days) the volumes may paint a picture not entirely true.

We got very high very fast, so a small correction is in the cards in about 1-2 days. This is what I expect. Then if the volumes suport, a new bull position may be started.

Stops: Gold, 1700, /es : 1205

For now I have gold and gold miners….

Good luck…

 

PS. : a nice regard to bxx, … 🙂

 

Categories: Uncategorized

Chop – Chop

November 14, 2011 1 comment

Hi there,

In the last few days we saw that the market is not safe.  It is in a chop chop zone, maybe because everybody including me is expecting the turkey to rally.  And we know the market does the most expected thing in the most unexpected way.

During the week, I watch Seinfeld during dinner time.   There is this episode where George decides to act contrary to his beliefs.  Meaning everything he thinks is right, it is wrong and viceversa.  And with this change, a lot of succesful and funny events happens to him.  Of course this is only a comedy show but my point is, when something in the market looks like it is easy or the right thing to happen, maybe one needs to be humble.   And we know when we need to be humble: when others cheer.  Is somebody cheering now?  It does not look like it, but there is nobody crying either. So chop – chop.

Charts please,

USD 2D:

  • SOS the last 2D
  • sentiment at 44 / RSI points down / momentum is negative
  • buying volume elevated and selling volume points down
  • the last 8 days, small volume bars, easier to manipulate
  • the long hist is about to cross on the pozitive side

USD 1D:

  • RSI UP / sentiment at 45 points UP
  • buying vol higher than selling but selling elevated (somebody is selling in the background)
  • accumulated buying vol on the long osc is decreasing
  • long history about to cross over on the negative side

RUA 2D:

  • MFI points UP, (somebody buying)
  • selling volume elevated but not increasing, selling in the background ?
  • momentum and McCellan vol osc are still high
  • sentiment points down , it is at 49

Based on RUA2D and $ 1D and 2D, my take is that the market will make a small dip and a small rally will start.   The selling volume on 2D is still elevated but not increasing.  The history is about to cross over on the RUA2D. The last week support of 1225 or the 50DMA (I think these 2 will colide in the next day or 2) is still a good target to buy spx.

Let’s see gold:

The GLD 2D is still bullish, the only thing negative is the sentiment (chart not shown).

Look at the gold weekly chart (above).

The TL stopped the move every time in the past (well almost every time).  Look at the volume when that TL was hit.  The volume was huge, there was a lot of SOS. Now we dont have that yet.  So we are in a chop chop zone for now.  Even when we went over the TL, (to go to 2000) a huge volume was printed. I think for now, depending on the $ moves, we may have a dip, but based on volume analysis, the dip will be bought.  I am prepared to do so.

If the gold volume increases in the next 2-3 days or next week, we will need to see what the volumes are telling us, but for now gold looks like it is playing with time.

Miners, we know are between RUA and Gold, so we may have a fast dip based on the RUA, but if the Gold does not fall, the miners are still a good bet on the UPside.

Hold your positions or do some position management.

Good luck.

Categories: Miss Market

Back to work

November 10, 2011 1 comment

Hi everybody,

I left the blogging scene in June because I felt I need to, not only to learn, but to internalize this type of analysis.  Salad wanted to help me but I felt nobody can help me on the market, but me.

He already gave us the tools, our job is to learn how to use them.  Besides trying to help, Salad asked me to do 2 things:

  • open a paper account, do trading there and no money trading until comfortable with trading related to volume analysis.
  • learn to trust volumes.
I did this and after a few days it hit me: all this time I was trading with the fear that I will lose the train. So I stopped any type of real money trading.
I started paper trading and after 2-3 weeks , even on paper, the loses started to accumulate, not many but hey, it is paper, how can I lose even on paper?
So, I started thinking about how to trade, risk management and what to trade.
I reset the account (on paper you can reset the account and start again, lol) , I started again from scratch and I told myself , no trades until the market is safe.
( I will continue with my journey in a future post)
Market safety gets me to today’s post:
Somebody at work told me it is easy to make money in the market, all you need to do is buy low and sell high.   I almost died of laughing.   Imagine the irony, buy low and sell high, this guy knew the secret to success.
But think about it, besides the irony of somebody with no clue about trading to tell you this big secret.
How can you buy low and sell high?
Is there such a thing? Or is this a joke?
No, it is not a joke, it can be done but it is psychological hard .  Basically we need to buy when nobody wants to buy, and sell, when, as Salad puts it,
people cheer.  Think long and hard about this…
Let’s see about Miss Market today :
As anybody knows by now, gold is in bull market, oil looks like it is in a second bull, stocks are somehow in a bear market but with Benny on the helm, we may be in a bull or in a bear market. As for the economy, we are in a low tide environment.
Let’s look at charts:
Rua 2d:
Unsafe teritory:
  • sell volume start to elevate
  • history crossed over
  • MFI down
  • long history close to cross over
  • selling volume bars (red at the top side) are higher than green volume bars
Rua 1D:
On the 1D:
  • sell and buy volume elevated, somebody is still buying right here
  • the hist and osc are red but very small, no presure on the downside
  • sentiment is at 62
  • momentum is still green
USD 2D:
USD 2D:
  • buy volume started 2 days ago to elevate
  • long term buy/sell volume, buy volume started to elevate
  • hist is about to cross on the upside
  • MFI is UP
  • sentiment is in the middle
  • green volume bars are way higher than red volume bars for this cycle
USD 1D:
As you can see in the chart, we are ready to start a new bull cycle on the 1D chart:
  • buy volume turned back UP
  • sentiment UP
Gold 2D:
Gold 2D is in a bull, but a small bull compared with the last bull cycle:
  • compare the 2 zones encircled
  • the buy volume is up, the sell volume is at O,
  • the RSI is still in the higher zone
  • sentiment is at 40
So, by looking at the charts above we can say this:
The stock market is not safe, if you are long, you should have trimmed positions today or maybe tomorrow.  We saw on the 1D chart, somebody is still buying, so you may be lucky.  But if luck is needed, then think long and hard about your attitude.
The $, is close to start a new bull cycle on the 1D and on 2D. If this happens, presure will be on stocks to the downside. On the same time, it may happen that the $ cannot go over 79, so we may stay in a range.
Gold is still in a bull, but it takes nerves to stay turkey. One has to make a decision about this…
Now, we go back to our main decision: is this the time to buy, because nobody wants to buy or is it time to sell?
For this you need to look at the market levels:
The above chart is spx daily with ichimoku cloud. If you do not know about ichimoku, this is another thing to learn.  Now for levels you can use MAs or fibonacci.  Anything is good , if you do your own analysis.
But let’s look at the above chart:
we see under 1225 spx, the presure starts to accumulate on the downside.  Where was the low in the last 2 days ? 1225 on spx. The red side on the ichimoku shows the huge pressure on the downside once the price will go under 1225.
So, in the end now is it time to do position or trading or risk management and trim some of the positions if you are long in the stock market.
My take is that the market is not safe , and unless you know how to deal with risk, market is unsafe for stocks.
For gold and miners, it is still a bull.
In my personal positions, I trimmed the miners this morning and I still have gold and miners.  Let’s say I trimmed 35% overall.
To end this first post after so many months, some questions that bothered me for a while:
Are you greedy or fearful? and why?
Is there a train you are afraid to lose?
What is your weakness and/or quality when you look at the market?
If you go on a trading forum, I hope you don’t do that until you are ready, can you tell who knows what they are doing and who does not?
Buy low and sell high, LOL….
Categories: Miss Market

The low was not tested, 1250 on spx

June 17, 2011 3 comments

Hi everybody,

I dont have time to post charts,

But if you think about the 200 MA on spx to get long and you did today, there is a level that was not tested, 1250 on SPX.

Which means that even if we have strength tomorrow (for some reason I think we dont) , then think about 1250 level that need to be tested to have a few days of bull or a few days of correction in a bear market.

We may have a small rally before or after we test the 1250 on spx, but the 1250 level will be tested somehow….

Levels to watch are 1250 and 1240 on SPX, these are Ichimoku based. Following the history, we should have a bounce coming from these levels.

Remember Salad warning, this is a bear market and unless you know what you are doing, risk management is king.

I hope for the best for everybody and good luck…

 

 

Categories: Uncategorized

A little correction

June 14, 2011 2 comments

Hi there,

It looks like the $ cycles give room for a correction in equities.  And the sell volume is too big, oversold market.  And everybody started to get scared of the selling.  It is time for a correction.  How big, I think the answer in the the $ cycle:

USD 2D:

On 2D:

  • hist and osc about to do bullish cross in 3-4 days
  • the sentiment is at 47 and points UP, momentum is almost to the green side at -17%
  • no buying volume yet
  • MCcellan vol osc is green

USD 1D:

USD 1D:

  • we have bullish cross on hist and almost a cross on osc
  • the buy and sell volume may have a bull cross tomorrow
  • the sentiment points down (at 55), momentum is at +16, points down
  • mccellan vol osc is green but points down
  • and RSI points down as well

So based on the USD 1D and 2 D we can say that for about 3 days, until the 2D can do a bull cross, the $ may wait with the pressure on equities.  So I expect a lateral or slightly down move for the $.

Let’s see the stock market, RUA3K 2D:

RUA3k 2D:

  • the sell volume is at “max”, meaning that in the past, every time the sell volume got that big, a correction started
  • we had a small MVO red today
  • the hist and osc are red
  • sentiment and momentum are low and red
  • McClellan vol osc is red and very low for 2D bars, meaning that is the past, every time the red volume got that low, a correction started
  • the long trend hist is about to cross on the upside, this is a fake signal, it is not at the same time with the slow hist
RUA3K, 1D:

RUA, daily:

  • It looks like the selling lost some of the power today
  • the hist is red but diminishing
  • no buy volume
  • the momentum and sentiment started to ease and to point UP
  • the RSI started to move UP from oversold condition

Based on 2D and 1D, we can say that the selling is still very powerfull, but a correction is close. How big? Maybe about 2-3 days.  I’ll say that by Thursday whoever is long from today needs to verify if long is still a good play.  I mean we can always correct with time, dont ever forget this.

Based on ichimoku, spx:

and fibonnaci retracements, I will say a good target to load a short, a small short position, if the sell volume stays elevated, will be 1295-1298 on SPX, up to 1311. If no experience, like me, and you want to load a short, please think about going only with a 1X , dont go with 2x or 3x unless you react fast to changes and you know how to deal with short positions.

If we go to 1295 on spx, I will load a 1x short, RWM only a unit, just to be able to verify the analysis.

We need to look at the $ move during the correction to the upside.

One thing to do, is to look for stocks that dont fall too much or are just correcting a little compared with the market indices. Take note, these may be the leaders when the bull returns.

Good luck.

Categories: Miss Market

Line in the sand crossed, is this bullish?

June 1, 2011 4 comments

HI,

The USD started a bearish cycle:

USD 1D:

  • bearish hist cross
  • osc is at O almost (14%)
  • sentiment is at 27 pointing down, momentum negative
  • mccellan vol osc is negative
  • last 2 days, 2 huge bearish volume bars

The USD 2D charts is bearish as well. (not shown here).

USD ichimoku:

On Ichimoku, 74.12 will be the first support. After that , based on weekly, 73.75

So based on the $, we are close to support and resistance for stock market and $.  Maybe that’s why gold is acting like it does not know what to do.

RUA 3k 2 D:

On 2D, the stock market started to act bullish, it is not yet bullish, we need osc to be green:

  • hist about to cross UP / osc slowly going to the positive side
  • buy vol is acting bullish / sell volume decreasing
  • sentiment at 49 points UP
  • momentum had a small green sign on the chart
  • McClellan vol osc is about to go green or it had a small green sign on the chart

RUA 3K 1D:

Except osc, all indicators are bullish on 1D (the osc , it may turn green  tomorrow).

We may have a hist cross tomorrow between buy/sell volume

Conclusion:

We are approaching a second time a big time support / resistance levels for $.

Energy sector is bullish.

The bearish USD volume indicators and RUA 1D indicators pushes us in bullish territory.

Based on this I will take a position in IWM or QQQ tomorrow. One unit;  if the sell volume goes to O, then I will take 2 units.

I took a small short on IWM on Friday that I closed for break even today.  Once that TL was crossed and the price did not turned back it was obvious that short  was not the good direction.

The financials are acting bullish but on small volumes.  The $ S/R, the volumes on financials and the lower L/H on financials makes this bullish trend to look like it is on shaky ground.

I try to take one day at a time and to take the signals as I see and understand them.

Good luck.

 

Categories: Uncategorized