Monthly Archives: October 2015

10-30-15 – Trading Strategy

10-30-15 – Trading Strategy

Current Sell List


 

Sell EWJ (Non leveraged Japan) Limit @ $12.70 (2.58% Profit)
Sell EWJ (Non leveraged Japan) Stop Limit @ $12.25 (1.05% Loss)

Risk Level 1

  • Price has finally broken through 3 moving averages 20-50-100
  • Existing uptrend
  • PPO has remained up for some time

Sell SOXL (US Semi Conductors) Limit @ $31.00 (14.48% Profit)
Sell SOXL (US Semi Conductors) Stop Limit @ $26.00 (3.99% Loss)

Risk Level 3

  • Confirmed breakout was reversed in one day
  • PPO has turned negative
  • Can’t let this move far against me as this looks like a fake breakout
  • Price moved down more than 1x the ATR of 7.01% today

Current Buy List


Buy DRN (Real Estate) Limit @ $73.50
Sell DRN (Real Estate) Limit @ $77.50 (5.44% Profit)

Risk Level 1

  • Price dipped back to my original buy point
  • Bounce off the 20-day EMA
  • Price still above all 3 moving averages
  • PPO is positive
  • Asking for a steep discount so I may not get filled, but if I do I don’t risk much

Buy EDZ (Inverse Emerging Markets) Limit @ $39.00
Sell EDZ (Inverse Emerging Markets) Limit @ $42.00 (7.69% Profit)

Risk Level 1

  • EDC fell below 20 and 50-day EMA
  • PPO turned negative
  • Confirmed resistance level held and price is following the larger trend
  • 4.11% ATR, but I’m asking for a small discount
  • Looking at about 3-4% risk

 

Buy RUSS (Inverse Russia) Limit @ 31.50
Sell RUSS (Inverse Russia) Limit @ $35.00 (11.11% Profit)
Sell RUSS (Inverse Russia) Stop Limit @ $30.00 (4.76% Loss)

Risk Level 2

  • Reconfirmation of existing downtrend today
  • Price fell below recent pull back
  • All technical indicators are still pointing down
  • Historically volatile market so risk of higher loss percentage is possible

Current Holdings


 Real time portfolio updates are now available here

10/27/15 – EWJ (Non Leveraged Japan) @ $12.38
10/29/15 – SOXL (US Semi Conductors) @ $27.08

Today’s Updates


Market Snapshot 10-29-15

SOXL (US Semi Conductors) Limit Order filled @ $27.08

The market volatility is turning brutal. I echo the struggles of most traders as trying to find even short term trends is getting very tricky. The difference today is there was very little intraday bullishness and most markets were headed for the exits.

UWTI (Crude Oil) – May very well break the $10 resistance level again, so I’m watching this for another downside play possibly. However, if it stays within it’s $10 – $14 range I will probably leave it alone.

UWTI 10-29-15

JNUG (Junior Gold Miners) took a full ATR drop today falling 14%. It’s now below all 3 moving averages again, back in it’s long term downward trend lines and PPO is now negative for the second day. However I’m not going to trade it. It’s just been too messy of a chart. With it being down on it’s 4th day already I’d hate to be jumping into the downside now fearing a one day pull back soon.

JNUG 10-29-15

UGLD (Gold) is now below all 3 moving averages and broke out of it’s upward trend lines. PPO has been negative for four days, so this may be a better downside play. I’m personally going to wait, this market volatility has just been too shaky for my tastes.

UGLD 10-29-15

UGAZ (Natural Gas) – Lets not forget Natural Gas. I wouldn’t be surprised if it’s a green day for UGAZ tomorrow. This one has just been hammered. I wish I had stayed in DGAZ (Inverse Natural Gas), I would be sitting on a 48% profit right now.

** Remember! The most profitable and reliable setups are markets that break new lows and that’s what happened with UGAZ (Natural Gas) **

UGAZ 10-29-15

Current Holdings with Open Orders for 10/30/15


Sell EWJ (Non leveraged Japan) Limit @ $12.70 (2.58% Profit)
Sell EWJ (Non leveraged Japan) Stop Limit @ $12.25 (1.05% Loss)

It seems like I just can’t get a break this month. The smallest breakouts are failing fast. All of the profit built up in EWJ was wiped away today and now I’m sitting at a break even. We’ll have to see if we get a bullish Friday or not. I don’t see much need in giving this wiggle room so my stop will stay at $12.25 for tomorrow.

EWJ 10-29-15

Sell SOXL (US Semi Conductors) Limit @ $31.00 (14.48% Profit)
Sell SOXL (US Semi Conductors) Stop Limit @ $26.00 (3.99% Loss)

The good news is I got a better fill because of today’s opening gap down, the bad news is it was at the high for the day. This looks like it’s going to be a fake breakout. PPO turned negative today and price fell more than 1x the daily ATR to the downside. That is a sign you do NOT want to see in a breakout.

False breakouts happen, you can’t get around it, however the key is to limit your downside so when you catch the true breakout it still brings in a profit. At my current risk/reward ratio I could lose 2 out of 3 and still be profitable on this trade.

Because of this new information, I’m putting my stop at $26.00 which is .05 from today’s low. If this is an uptrend, we should gap open higher tomorrow and keep going higher. Anything else will be sideways movement or another move lower tomorrow and the breakout will be invalidated.

SOXL 10-29-15

New Open Orders for 10/30/15



Buy DRN (Real Estate) Limit @ $73.50
Sell DRN (Real Estate) Limit @ $77.50 (5.44% Profit)

Trend is still up, even though we’re in a short correction in DRN. This is why it’s super important I get a discount. If this is the top I want to be able to set a short stop on this. I may not try for this again if we get another red day across the markets. The recent uptrend we saw could have just been a build up to the FOMC minutes.

DRN 10-29-15

Buy RUSS (Inverse Russia) Limit @ 31.50
Sell RUSS (Inverse Russia) Limit @ $35.00 (11.11% Profit)
Sell RUSS (Inverse Russia) Stop Limit @ $30.00 (4.76% Loss)

Well, this is always a kick in the teeth. Today RUSS closed above $32 which would have been a profitable trade on my previous $32.00 entry. However price action completely reversed yesterdays loss so I’ll take another chance at this, but this time I’m going to ask for a bit more discount just in case ($31.50 instead of $32.00 previously).

RUSL 10-29-15

My order for RUSS (Inverse Russia)

RUSS 10-29-15

Buy EDZ (Inverse Emerging Markets) Limit @ $39.00
Sell EDZ (Inverse Emerging Markets) Limit @ $42.00 (7.69% Profit)

Price didn’t come down to my buy point today but we have further confirmation that EDC is moving down. One last chance to get a fill.

Chart of EDC (Emerging Markets) today

EDC 10-29-15

My order for EDZ (Inverse Emerging Markets) for tomorrow

EDZ 10-29-15

10-29-15 – Trading Strategy

10-29-15 – Trading Strategy

Current Buy/Sell List


 

Sell EWJ (Non leveraged Japan) Limit @ $12.70 (2.58% Profit)
Sell EWJ (Non leveraged Japan) Stop Limit @ $12.25 (1.05% Loss)

Risk Level 1

  • Price has finally broken through 3 moving averages 20-50-100
  • Existing uptrend
  • PPO has remained up for some time

Buy DRN (Real Estate) Limit @ $73.50
Sell DRN (Real Estate) Limit @ $77.50 (5.44% Profit)

Risk Level 1

  • Price dipped back to my original buy point
  • Bounce off the 20-day EMA
  • Price still above all 3 moving averages
  • PPO is positive
  • Asking for a steep discount so I may not get filled, but if I do I don’t risk much

Risk Level 1

Buy EDZ (Inverse Emerging Markets) Limit @ $39.00
Sell EDZ (Inverse Emerging Markets) Limit @ $42.00 (7.69% Profit)

  • EDC fell below 20 and 50-day EMA
  • PPO turned negative
  • Confirmed resistance level held and price is following the larger trend
  • 4.11% ATR, but I’m asking for a small discount
  • Looking at about 3-4% risk

Order Cancels Order

Buy SPXL (S&P 500) Limit @ $87.70
Buy SOXL (US Semi Conductors) Limit @ $28.00

Risk Level 1

  • Getting into only one of these markets
  • Already in a confirmed breakout
  • One last attempt to get in at a better price after a small pullback

 

 

Current Holdings


 Real time portfolio updates are now available here

10/27/15 – EWJ (Non Leveraged Japan) @ $12.38

Today’s Updates


 

Market Snapshot 10-28-15

RUSS (Inverse Russia) Limit Order Filled @ $31.89
RUSS (Inverse Russa) Stop Limit Order Filled @ $30.00 for a 5.93% Loss

What a wild day in the market today! If you happen to watch the price action the market blew up in a bullish fashion only to see about half the markets to drop back down. It’s hard to determine which to attribute the movement to, the un-expected drop in Oil inventory or the FOMC announcement “hinting” there may be a rate increase in Dec.

But it’s not like even being right about the forecast makes a different

From a technical perspective, it doesn’t really matter. News events prior only indicate there will be a high chance of volatility when they are released and today was no difference.

The real surprise was the 19% move completely retracing the drop from $10.00 in UWTI (Crude Oil). This is why I try to get in trades within the first 1-2 days of the breakout because you never know how quickly they will be reversed.

But it’s not like it truly matters if you are right about the forecast. Inventory numbers come out each week, this week was a surprise.

http://www.investing.com/economic-calendar/crude-oil-inventories-75

UWTI 10-28-15

But look at the chart of UWTI (Crude Oil) on Oct 21 when inventories were near DOUBLE than expected vs the small percentage off they were today. It was only down 6.21% on a daily ATR of 9.87%. While today’s movement was UP 19% on a daily ATR of 8.59%

UWTI 10-21-15 back then

On the contrary UGAZ (Natural Gas) continues to decline after it’s breakout and hasn’t seen a single up day correction since. One could have picked either UWTI (Crude Oil) or UGAZ( Natural Gas) to go down further and if you picked wrong, all of your profits would be gone.

UGAZ 10-28-15

RUSL (Russia) – RUSL spiked up high enough for my order to get filled in RUSS (Inverse Russia) and then kept on going high enough for me to get stopped out. In fact, the position isn’t invalidated. Price closed below support, price is still below all 3 triple moving averages AND PPO is still negative.

It was an intraday spike that moved much more than I anticipated (about 1.5x the daily ATR) and I was stopped out.

This is why I get into the eternal mental debate on entering stop orders on order entry. It’s that intraday price action on the day of entry that I don’t like to deal with.

RUSL 10-28-15

As you can see from the chart here, my entry hit at $31.89 with the gap down on open and closed at $31.02, a much better position than my stop at $30.00.

There are only a few variables worth even considering:

  1. Should I have even put a stop? 
    1. Yes, because what happened in UWTI (Crude Oil) with it’s 19% gain, could have easily been a 19% gain in RUSL (Russia) causing a 19% LOSS in RUSS (Inverse Russia).
  2. Should I have opened my stop?
    1. Maybe, maybe not. The goal was to get in at 50% of the ATR assuming this was a bullish breakout, I’d have been lucky to even get filled.
    2. Second, the stop was set at 1x ATR below yesterday’s bullish close. That’s a LOT of intraday price movement against a bullish position. Most breakouts don’t move that far in the wrong direction, even intraday.
    3. If I opened my stop and it was still stopped out, I’d have lost more. Just look at some of the trades that I lost on this month. It just opens you up for more loss.
  3. Should I rebuy?
    1. NO! Never chase. Your instant emotion is to jump back in and win your money back. It’s very close to my original buy point, so I may still be right (you say to yourself). But no, wait for it to confirm the direction and break above the price you paid confirming it was still going in the direction you predicted.The reason for this is this could easily go volatile and choppy. You want price to confirm it can go in the direction of the breakout.
  4. Bad luck!
    1. Yes, it happens, this is the stock market. There are variables out of your control. You focus on minimizing your losers so your winners are more frequent and larger. This happens. Get used to it. I know historically I can turn out more 5%+ winners than losers if I keep playing the way I did today.I’m okay with this loss because I would have taken this trade, the same way, every time I see it and I know I would be a winner more percent of the time than a loser.

RUSS 10-28-15

Close Call – SPXL (S&P 500) Which came very close to getting filled today had an intraday high of $89.00 which was exactly my sell order for today had I been filled. With the positive reaction today to the FOMC announcement I will be more aggressive in getting in one of the US markets.

SPXL 10-28-15 close call

Current Holdings with Open Orders for 10/29/15


Sell EWJ (Non leveraged Japan) Limit @ $12.70 (2.58% Profit)
Sell EWJ (Non leveraged Japan) Stop Limit @ $12.25 (1.05% Loss)

Chugging Along – EWJ (Non Leveraged Japan) saw a near 1% gain today and is still on track to move higher. A close above $12.60 should solidify this as a breakout move for potentially more profit.

Keeping the same orders for tomorrow, but I’ll increase it if we close near my sell point on higher volume.

EWJ 10-28-15

New Open Orders for 10/29/15



Buy DRN (Real Estate) Limit @ $73.50
Sell DRN (Real Estate) Limit @ $77.50 (5.44% Profit)

This is the same order I had in almost two weeks ago. I was waiting for a pullback, and the pullback happened today but I didn’t want to put in orders in the US market with the FOMC announcement. Hindsight is 20/20 and it looks like I should have put in that order after all. We’ll see if tomorrow gets a hit.

DRN 10-28-15

Buy EDZ (Inverse Emerging Markets) Limit @ $39.00
Sell EDZ (Inverse Emerging Markets) Limit @ $42.00 (7.69% Profit)

EDC (Emerging Markets) has failed to break $16.50 and has now closed below all 3 moving averages, the 20-50-100 day EMA. It’s hit a new recent price low and PPO has turned negative. Price is also following the longer term trend which is down. Volume was higher in EDC (Emerging Markets) on a down day as well which makes this an early opportunity to get in. A gap down tomorrow will confirm the downtrend, but I’ll also miss out on a fill if it does.

EDC 10-28-15

Chart of EDZ (Inverse Emerging Markets) and my orders

EDZ 10-28-15

Order Cancels Order

Buy SPXL (S&P 500) Limit @ $87.70
Buy SOXL (US Semi Conductors) Limit @ $28.00

You may not have seen this before. I am putting in an OCO (Order cancels Order) for two different stocks. These are BOTH US based stocks, and I only want to be in one of them. They are both in confirmed breakouts and after a small pull back (which I missed) I am trying to get back in. But instead of focusing on one or the other, I’m putting in orders for both. Whichever one is filled first will cancel out the other.

I’ve put my potential profit targets that I will enter depending on which one is filled.

Order for SPXL (S&P 500)

SPXL 10-28-15

Order for SOXL (US Semi Conductors)

SOXL 10-28-15

 

 

10-28-15 – Trading Strategy

10-28-15 – Trading Strategy

Current Buy/Sell List


 

Sell EWJ (Non leveraged Japan) Limit @ $12.70 (2.58% Profit)
Sell EWJ (Non leveraged Japan) Stop Limit @ $12.25 (1.05% Loss)

Risk Level 1

  • Price has finally broken through 3 moving averages 20-50-100
  • Existing uptrend
  • PPO has remained up for some time

Buy RUSS (Inverse Russia) Limit @ $32.00
Sell RUSS (Inverse Russia) Limit @ $35.00 (9.38% Profit)
Sell RUSS (Inverse Russia) Stop Limit @ $30.00 (6.25% Loss)

Risk Level 2

  • Price bounced off 100-day EMA back into existing downtrend
  • Price has fallen below the 20 & 50-day EMA
  • PPO is negative
  • Price gapped down below short term support of $17.00
  • Global markets have all been moving down as well
  • Current ATR is 6.16%, but historically this can move double digits
  • Asking for a 50% discount on price entry to be safe

 

Current Holdings


 Real time portfolio updates are now available here

10/27/15 – EWJ (Non Leveraged Japan) @ $12.38

Today’s Updates


Market Snapshot 10-27-15

TMF (20+ Year Treasury Bonds) sold @ $81.65 for a 3.32% Profit
VGK (Non Leveraged Europe) stop limit sold @ $52.00 for a 0.95% Loss

EWJ (Non Leveraged Japan) limit order filled @ $12.38

Another red day across the board for the global markets. The downward trends just keep getting worse and worse for the commodities such as GASL (Natural Gas Companies) and UWTI (Crude Oil). The much anticipated FOMC announcement tomorrow with the anticipated .25% rate hike could already be built into the markets. If they push the hike again, expect to see some strong moves, especially in DRN (Real Estate).

Despite all of the red days we’re seeing, many markets still aren’t confirming new direction. The commodities are already leading the charge down to the bottom and we’ve seen some bad earnings announcements from the non-tech industry companies, so it’s anybody’s call as to what happens. All I care is that SOMETHING happens, just give us a direction to trade.

WINNER – TMF (20+ Year Treasury Bonds) sold for a 3.32% Profit

I’m still aware of this months losses so I’m shooting for singles and doubles and not trying to retire on every trade. Very happy with my order fill today, especially closing out the day before the upcoming FOMC meeting will certainly help me sleep better tonight. I also benefited from the opening gap and made an extra .15 cents on my sell order as a result.

TMF 10-27-15

Loss – VGK (Non Leveraged Europe) sold for a .95% Loss

Took a small an acceptable loss in VGK, much less than had I taken EURL (Leveraged Europe). The chart simply broke down today. Price broke above resistance two days ago and has already failed. Today should have been an up day and one that broke above the 100-day EMA for this to be a sustained breakout. I may trade this again, but next time it will have to break the 100-day again since it couldn’t do it on this last leg.

VGK 10-27-15

Close Call – SPXL (S&P 500) 

Today’s low was $85.05 and my order to enter was $84.70. I am not going to enter this order again with the FOMC announcement at 2pm EST (11am PST) tomorrow. However, I’m still bullish on SPXL until the chart says otherwise. I’ll watch the market near the announcement and I may jump in immediately if it reacts positively to the news.

SPXL 10-27-15

Current Holdings with Open Orders for 10/28/15


Sell EWJ (Non leveraged Japan) Limit @ $12.70 (2.58% Profit)
Sell EWJ (Non leveraged Japan) Stop Limit @ $12.25 (1.05% Loss)

Putting my stop at 1x ATR for tomorrow. It’s already been down 2 days, a drip intraday is acceptable, but not a 3rd down day. That would be an early sign this was a false breakout. It’s also a test again of the 100-day EMA, so if this is a true breakout, we shouldn’t be pulling back that far. What I like is it’s only a 1% loss and if it continues higher I should be able to keep increasing my limit order.

EWJ 10-27-15

New Open Orders for 10/28/15



Buy RUSS (Inverse Russia) Limit @ $32.00

Sell RUSS (Inverse Russia) Limit @ $35.00 (9.38% Profit)
Sell RUSS (Inverse Russia) Stop Limit @ $30.00 (6.25% Loss)

RUSL (Russia) has now broken through a short term resistance level of $17.00. It’s bounced off the 100-day EMA, and now down through the 50 and 20-day EMA in yellow and purple. PPO is on it’s second with a solid gap down below resistance so we have a new confirmed downtrend.

The daily ATR of RUSS is 6.16% so I’m asking for a 50% ATR discount in order to be filled tomorrow. My $30 stop is just a safety net in case something goes horribly wrong tomorrow and Russia just has an incredible up day.

Today’s chart of RUSL (Russia)

RUSL 10-27-15

My orders for RUSS (Inverse Russia) for tomorrow

RUSS 10-27-15

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