Combining GB with spread trend

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pmward
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Re: Combining GB with spread trend

Post by pmward » Thu May 21, 2020 11:00 am

pmward wrote:
Wed May 20, 2020 12:43 pm
Also, stop loss moved up again in SLV today, current stop is in the general vicinity of about $15. Guaranteeing more profits. I would like to see us get a pullback/retest of the 200 day SMA and bounce to confirm that as support, that would give me confidence to move my stop up even higher to just below the 200 day SMA. Trailing a stop is a bit more of an art than a science. In a volatile asset like SLV you have to give it some room, as I don't want to get shaken out during normal market volatility.
Today we are going to check back in with SLV. See the quote above from yesterday. I sure did not expect this to happen the next day, lol. These volatile markets move so fast. But if you look we did just this. We went down just below the 200 day SMA, just enough to excite the bears, then the bulls issued them a pie in the face and ripped the price back above the 200 day SMA. Now it is still early in the day so we have to see if this holds of course. On the 15 minute chart though there is a bull flag forming, so it's looking possible we will get another up move. If we close above the 200 day SMA that would give me a lot more confidence. So, as a learning lesson here, when and where would I move my stop loss up? Passing the test does confirm it is support, and there are bulls watching and willing to buy whenever we dip below it. That's a good thing. But, SLV is also a volatile instrument so I do not want to put my stop loss too close to current price. So, what I would do is watch for the next higher high. If/when we get above 16.44 that would confirm a new higher high and higher low. At that time I would move my stop loss up to probably ~1% below the 200 day SMA (once again to account for volatility and another fake out break down like this morning). At that time I would also look at other support areas that would be in the area near the 200 day SMA, as having it below multiple support levels if possible is a good thing.

Also of note, I did add on to my SLV, GDX, and GLD positions this morning as all 3 tested support this morning. I've always been more of a breakout trader than a support bounce trader, I'm trying to expand my horizons a bit with a new technique that is a bit more fitting in the current market environment.

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Vil
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Re: Combining GB with spread trend

Post by Vil » Mon May 25, 2020 8:41 am

pmward wrote:
Thu May 21, 2020 11:00 am
I'm trying to expand my horizons a bit with a new technique
Having said that ... Master Pm :D , I was having in my (mid-term) TODO to ask you something.. the right time just came ;D So, it might sound you not quite a wise, but I am relying a lot on trailing stop loss orders those days. Rationale behind is the following - once I jump on the train (that's home brewed combination of HA candles, stochastics and MFI and definitely not the grail), I rely a lot on trailing stop losses to exit (as I said - especially those days).. Again, it might sound not really wise to do it all the time, but those days as I am generally lacking the time to contemplate a lot on support/resistance levels (Fibs I am not a fan of), etc. I just let it run ... Normally, for my day trading adventures I start with slightly generous 2 ATR.. then, if the trade gains traction I am decreasing it.. What's your thought on the slack of the trail ? As usual - thanks.
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Re: Combining GB with spread trend

Post by pmward » Mon May 25, 2020 11:17 am

Vil wrote:
Mon May 25, 2020 8:41 am
pmward wrote:
Thu May 21, 2020 11:00 am
I'm trying to expand my horizons a bit with a new technique
Having said that ... Master Pm :D , I was having in my (mid-term) TODO to ask you something.. the right time just came ;D So, it might sound you not quite a wise, but I am relying a lot on trailing stop loss orders those days. Rationale behind is the following - once I jump on the train (that's home brewed combination of HA candles, stochastics and MFI and definitely not the grail), I rely a lot on trailing stop losses to exit (as I said - especially those days).. Again, it might sound not really wise to do it all the time, but those days as I am generally lacking the time to contemplate a lot on support/resistance levels (Fibs I am not a fan of), etc. I just let it run ... Normally, for my day trading adventures I start with slightly generous 2 ATR.. then, if the trade gains traction I am decreasing it.. What's your thought on the slack of the trail ? As usual - thanks.
I'm not a fan of arbitrary percent based trailing stops. I always trail a stop but I always use support levels, moving averages, average true range, etc to help me find the proper level. The timeframe of the trade also helps determine this. For instance, if I'm looking for a big multi-month to multi-year trade I will place my stops based on the weekly chart. If I'm looking for a couple week to couple month trade, I'll place my stops based on the daily chart. If I'm looking for minutes, hours, or days I'll go to different intra-day charts (1 hour, 15 min, and 10 min are my favs). Support and resistance is the most effective technical indicator out there. Large institutions, hedge funds, prop desks, etc make up 90% of the volume out there and they all trade using support and resistance levels. They work because of this. It's not magic, it's just that most of the volume out there uses these levels to trade (remember each timeframe chart has different support/resistance levels too). These support levels include major pivots, fib retracement levels, popular moving average lines, gaps, break up/down candles, trend lines, patterns, etc. So my best advice to you would be to really learn how to read a candle chart first. This is the most important tool I've found. All you really need to trade effectively is a candle chart and the popular moving averages (20, 50, 200 period SMA's). If you buy at support and sell at resistance, while always keeping a stop below a strong resistance level, you will win way more trades than you lose and minimize the damage in your losses. I find the other indicators to be more confirmation than actual trading indicators. I never place a trade based on an indicator, but I do glance at RSI, spread charts, and PPO/Macd for general confirmation/divergence signals as well as for quickly narrowing down a large pool of potential trades down to the strongest or weakest depending if I'm looking long or short respectively.

My favorite technique in the past was buying a breakout of resistance, and placing a stop below. Lately I'm trying to buy support, and once again placing a stop below. In this new strategy it really warrants finding a trade where there are multiple levels of support on multiple timeframes in the same general area. The more reasons for support, the higher the odds it bounces.
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Re: Combining GB with spread trend

Post by Vil » Mon May 25, 2020 11:33 am

pmward wrote:
Mon May 25, 2020 11:17 am
I'm not a fan of arbitrary percent based trailing stops.
Not a fan of it either, that'why I mentioned that for day trading I normally use a 2 ATR for the beginning, and as see the trend of the trade is losing momentum, then I decrease the slack of the trail. But you are right about one thing - its all specific setup. Well, regarding chart reading - I know this and that, unfortunately do not have plenty of time to dedicate (and even was considering to stop until I found a bit more time, as I believe it's serious business and should be treated as such, and not as a game).
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Re: Combining GB with spread trend

Post by pmward » Mon May 25, 2020 2:22 pm

Vil wrote:
Mon May 25, 2020 11:33 am
pmward wrote:
Mon May 25, 2020 11:17 am
I'm not a fan of arbitrary percent based trailing stops.
Not a fan of it either, that'why I mentioned that for day trading I normally use a 2 ATR for the beginning, and as see the trend of the trade is losing momentum, then I decrease the slack of the trail. But you are right about one thing - its all specific setup. Well, regarding chart reading - I know this and that, unfortunately do not have plenty of time to dedicate (and even was considering to stop until I found a bit more time, as I believe it's serious business and should be treated as such, and not as a game).
A course like this is probably up your alley https://mystrategicforecast.com/lazyeminitrader/. It's a 5 hour video course and quickly and efficiently covers all the basics of candlestick charting. It's geared towards day traders as well, which you seem to be interested in (though all of this stuff is applicable to any timeframe, it's just that this guy is a day trader so this specific course looks mostly at intraday charts to show the points). I took it a few years back and really got a lot out of it. The info here is still the foundation of how I look at candlestick charts to this day. Matter of fact I went back through it recently in helping me with my new strategy. It also helps if you follow his daily YouTube market recap videos each day for awhile after taking the course to help really drive the info home. If you plan on trading then it's a price well worth paying to really learn how to read a candlestick chart well. David Frost is one of the best at teaching candlestick charting that I'm aware of. He's also really entertaining, so that helps.
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Re: Combining GB with spread trend

Post by Vil » Tue May 26, 2020 1:04 pm

pmward wrote:
Mon May 25, 2020 2:22 pm
A course like this is probably up your alley https://mystrategicforecast.com/lazyeminitrader/.
Thanks pm, I have heard this guy previously. Not aware of how good he is in trading (and teaching), though I do not like his obsessive style of "I am nr.1 ", which is fairly often in the trading field, as you are pretty much aware. Dunno if it's only me, but I do not like that sort of aggressive marketing as receiving 4 emails the next couple of hours following the registration on the site (which is actually the case since I registered on mystrategicforecast.com). Anyway - thanks for the advice/s, always worth.
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Re: Combining GB with spread trend

Post by pmward » Tue May 26, 2020 2:37 pm

Vil wrote:
Tue May 26, 2020 1:04 pm
pmward wrote:
Mon May 25, 2020 2:22 pm
A course like this is probably up your alley https://mystrategicforecast.com/lazyeminitrader/.
Thanks pm, I have heard this guy previously. Not aware of how good he is in trading (and teaching), though I do not like his obsessive style of "I am nr.1 ", which is fairly often in the trading field, as you are pretty much aware. Dunno if it's only me, but I do not like that sort of aggressive marketing as receiving 4 emails the next couple of hours following the registration on the site (which is actually the case since I registered on mystrategicforecast.com). Anyway - thanks for the advice/s, always worth.
He is a good trader and teacher. I would not recommend him otherwise. Everywhere these days over emails, I just personally set those I don't want to junk. That being said, there are other places to learn the same stuff. It's really a course in the fundamentals of candlestick charting. It's just that most places will require more time than 5 hours to cover all the info. He really distills a lot of info short and sweet into that course. You'd mentioned time was your biggest constraint and that was why I made the recommendation.
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Re: Combining GB with spread trend

Post by pmward » Wed Jun 03, 2020 11:05 am

Have not posted any charts in awhile, mostly because markets have been boring the last couple of weeks. Pretty much everything has just been consolidating and nothing has really changed or resolved. The only people that have been making any money are day traders. Interesting look today on GDX though. We bounced pretty strongly off the support at ~32.50. If someone is looking to buy GDX this is a good low risk, high reward entry, and you can currently get in at 33.23, and a daily close below 32.50 would be the signal to sell.
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Re: Combining GB with spread trend

Post by pmward » Wed Jun 03, 2020 8:00 pm

Another chart worth checking back in on today. What I refer to as "the most important chart in the world" the USD broke down last week from that triangle pattern I had annotated here a few weeks back, and boy did it ever break down from it! It's been dropping like a rock. I think it's a really good omen for the economy, stocks, and metals going forward that the dollar is falling; let's hope this breakdown continues. I would really love to see us get back down around those March lows, although that 96 area is likely to provide a bit of resistance.
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Re: Combining GB with spread trend

Post by pmward » Thu Jun 04, 2020 11:07 am

Today we are going to look at another breakdown, TLT. You can see the pennant formation I've been tracking for months now broke down a few days ago. We are getting close now to the 50% Fib retracement and the 100 day SMA. I really like the look of that 61.8% Fib retracement having the 200 day SMA a couple dollars below (which will keep getting closer as the days go on), the top of that final big breakdown candle from March in the same area, we have a standard measured move from the formation breakdown hitting the same target area, AND we also have fat round number psychological support at 150. So there are multiple reasons TLT should find support and bounce from this general area, so a very low risk/high reward setup for a swing trade. I'm currently stalking a trade in this area if/when we get down there.

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Re: Combining GB with spread trend

Post by pmward » Thu Jun 04, 2020 1:30 pm

An interesting sentiment indicator here, the Put/Call spread. We are currently back at the same bullish range we were in during the meltup prior to the crash. Historically, it's incredibly rare that the options market gets this bullishly aligned. Over the last couple days I have swapped from bullish on equities to cautious/neutral. This is one of the reasons why.
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Re: Combining GB with spread trend

Post by Vil » Fri Jun 05, 2020 7:52 am

pmward wrote:
Thu Jun 04, 2020 11:07 am
I'm currently stalking a trade in this area if/when we get down there.
I do not see anything positive yet for TLT. IS04 (in Europe) opened with some -1.5% gap.. Still, it has to fall.. :)
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