Actually if we get above 1100 I would be getting stopped out(of a portion), instead of adding. The market never gives you too many chances, and when it does, its probably because you are on the wrong side.
I certainly hope other posters took advantage of this gift. I was fortunate to take a large position of ESI at $93.90 and and just covered at $84.00. I will be leaving for the Carribean next week - without Karen.
Is there a new thread somewhere or a blog, or is your guide to TA still in the works? Just wanted to make sure I haven't missed something. I'm going through your original TA thread atm. I am quite impressed by the knowledge in this thread, but the terminology is still over my head for now (I have a math/engineering background so I feel like I should be able to pick it up eventually).
I do a dynamic hedging thing, where I write options then hedge them with options, so I always keep delta neutral, short vol, and long theta.
I have to apologize for the delay in the new thread/blog. A bit hectic at work lately, may be transitioning from trading my own firm account to more of a money management role. Not that my free time is getting such a hit, just that my head isn't quite in it at the moment(teaching/blogging). The new position starts 8/1 so looking for some stability after that. Again, sorry to everyone for now. For the moment I will still update my recent trading in this thread though, since I started to, I don't want to leave anyone out to dry. If you have any questions regarding terminology, don't hesitate to ask. If it is too complicated I will try to cover it in general, then go into detail in the new thread/blog.(leaning towards thread, keep it all in-house at Clutchfans) As for the old TA thread, I'm glad to hear you are looking through it. I spent a bit of energy for it so hopefully it is still helpful. A little background on it though: That thread was started when I was first transitioning BACK to a medium/long term system, from a quant/algo system I was trading at the time. The medium/long term system was developed by myself through years of trial and error(and loss). I was not able to trade it when I first got a job at a firm, because I had no track record to show them. Only after proving myself through their quant systems could I start trading on my own. That's when I started that TA thread. Since then, my own trading(medium/long term) has changed(improved) quite dramatically. Not that anything in the old thread is wrong, just that I now trade a little differently(better). The stuff in their is still useful, and if I see a perfect (old)setup nowadays, I may still trade it. If you are reading that old thread, you can see that I still got plenty of things spot on using my prior system. The biggest differences between my trading then and now are- 1. Before, I traded mainly breakouts, and momentum. Most of the setups you will find in that old TA thread are based on this. Now, I mainly trade Overbought/Oversold, and retracements. This may be an improvement on my part, OR just a necessary change due to the market. You see, with less Public in the market, there is less dumb money that drives the momentum. Therefore I have to change my own trading to Fading moves now, instead of going with them. This is not necessarily a change in philosophy, but a change in technique. 2. Instead of being very stock specific, I now trade the market as a whole(through futures) and trade some stocks off of it(using relative strength). Almost every setup in the old thread will be stock specific, nothing to do with the market. The truth is, no matter how good the setup, most stocks will still end up going with the market as a whole. So if you can't beat 'em, join them. Also for liquidity reasons it is much easier to trade the futures market as opposed to equities. 3. Since that thread I have learned a lot more about Cycles, Spectral analysis, and Astrofinance. As crazy as some of it sounds, it has proved invaluable. That's all I will say about them for now. For the moment there are still plenty of things you can learn from that thread(like the Gold trade ). Once I am situated I will go into detail about all the technicals, and all the technique that I have since then improved upon.
so I'm reading through the "Chart School" portion of the stockcharts.com site, it's a nice primer CXbby or anyone else, just curious what your thoughts are on the weaknesses/criticisms of TA that are listed:
so what is your criteria for your stop being triggered on these longer term (non-intraday) type trades? are you out (of a portion) at 1100.25 no matter what, waiting for a daily close over 1100, waiting for multiple days holding over 1100?
Are you thinking of something like this? Think or Swim Paper Money Tim Knight was connected with <i>Think or Swim</i> before the sale to <i>TD Ameritrade</i>. I don't know what his current relationship is with the organization. Tim has a popular Blog that has a tilt - lean to the Bearish side. There will be some Long trade ideas from time to time, but the underlying sentiment at the SoH is Bearish. Slope of Hope
For the add around 1100, the stop was 1103. My stops are usually proportionate to an expected gain/target, or a few points above/below a price(support/resistance). So in this case 3 points above a price, which was triggered Friday. For the initial entry at 1120, my initial stop was 1150. 1150 was a price(resistance), and it also was the necessary cushion proportionate to the expected gain(target)- 940, 180 points. However, things change, and stops are fluid. Once we hit 1070ish, I moved my initial 1150 stop to 1130(pivot) and some to breakeven.
Next spot to add, a much better spot than 1100 btw, is coming up. 1113-1117 on the SPX is a convergence between the 200SMA(what we've been waiting for all along) and the daily Bollinger bands. Conventional technicals says we are making a higher high(1100) now and looks bullish. But the unconventional stuff I look at are still decidedly bearish and this would be the spot to get in/add.
Stockcharts.com, as you've noted, is a nice primer, but not the be all end all. This is not a weakness in technical analysis, but rather a weakness in the trader behind it. The same thing can be said for any type of analysis. So a poor trader will trade poorly? No ****. There are no magic formulas. "Technical" analysis by definition deals with facts. There is no interpretation to where the 200SMA or daily Bollinger band or Fibonacci retracements are. They are simply data that are calculated. HOW to use them, on the other hand, is open to interpretation. But that again comes back to the skill and experience of the trader using it. But even still, being "right" or "wrong" in using it is not the point of TA. Rather, having a precise point of entry and exit, thereby yielding a definable risk, is the entire purpose of TA. Once you can quantify risk, then you can leverage. Using fundamental analysis, when do I know I am "wrong"? Down 10%? 30%? There is no way to leverage with that method. I am not trying to be an investor and hope I can return 15% a year. Unless I have $10M to put up, it would be pointless. The only way to make a living, and a killing, is to leverage up. The ONLY way to use leverage is with definable risk. There are lagging indicators, and leading indicators. Both are "technical analysis". To say TA in of itself is late is disingenuous. It depends on which indicators you are looking at. I sure as hell was not late when I shorted 1120. And the Dow Theory is an archaic practice that is outdated. Using Transportation as an indicator of leadership in technological advancement has not made sense since the 1950s. You would be much better off looking at the Nasdaq for the Dow theory nowadays. This can be viewed as a legitimate criticism. As you can see from my own recent trading, 1100 was a possible spot to add, which we did come off slightly when we hit it. But then now there is key resistance at 1113-1117. And then 1130 which was the pivot. And then 1140 which is the 62% fib retracement. But this does not go on indefinitely. There are spots that once we get above, I will have to reevaluate my entire stance. But before we get to that point, yes there are a lot of levels. Not every pattern will work? You don't say! I have some thing that does work every time, but unfortunately I cannot share that with everyone. It is a crystal ball that I hide beneath my bed sheets that forecasts every move. Now unless you have something like that, NOTHING will always work. As if fundamental analysis or any other analysis will always work? The truth is, TA is not some magic key to making money. It is still up to the trader. When it "works" is not the issue, it is when it "doesn't work", and the trader has to manage his losses- that is where the money is made. The difference between Technical Analysis and the rest is that it is a much more analytical and process oriented approach. Where we can identify and quantify our risks and rewards. Think of it as Daryl Morey's stat based, analytical method, as opposed to the traditional, just watch the games and wing it.
Meaning based on your "unconventional sources" you're expecting a downturn? Cause that's kind of where I'm at right now, but I was just interested to hear you're opinion. I'll be watching very closely as the SPX approaches 1120 or so.
Convention says we just broke through 1100, a previous high, so look for a move higher. IMO that is a fakeout. There are negative long term cycles coming up this week and into August that go beyond convention. To take advantage, we look at prices for potential entry points: From here we see that: 200SMA - 1114 Daily Bollinger band - 1122 Year high to low Fib retracement - 50% -1115.5 So there is a cluster**** right around 1115-20 that I would look to initiate a position.
