April 30th, a solid day

Today I actually followed my plan, cool. Five trades, three in the black and two in the red.

This is where the method of staying in the game throughout the day pays off as I am there for the decent winners and I cut my losers short, stacks things in my favour that way.

The quick count was +1 cps, +22 cps, -10 cps, -10 cps, + 52 cps. I missed a couple near the end due to some playing about.

The charts:

SSO for the morning SPX gains:

SDS for the afternoon pullbacks:

Part of the key is getting on the right side of the 200sma which is assisted by watching the TICK, observing near support and resistance as well as just seeing how the price behaves as it travels from one price to another. Basically being flexible about the ideas that the market may cause me to come up with, don't ignore a bias but allow it to shift with the information at hand.

Tidbits from my journal as I checked the various indicators, markets and whatnot:

Pre-market idea: "SSO long with a loose stop"
Based on the FTSE uptrend over it's duration...to that point. TICK was positive but not strong.
SSO gapped up 90 cents on the over night and was well over yesterday's high.

Early morning: "Price is testing yesterday's high (as support) uptrend day?"
TICK was strong but not spectacular, sector ETFs were all up with one or two exceptions

Mid morning: "Sector ETFs are mixed - range day now?"
Sector ETFs not so positive anymore, Tick not giving lot's of >+800 readings and slowly trending down against the gains.

Late morning: "Note Mid morning entry...wait for resolution, check near lunch"
I waited and saw the price cross the 200 on the upside in SDS, had a few tests and jumped in on market weakness.

I am still playing so my position sizing is small, 100 or 200 shares, so the profits are negligible, but the ideas are sound so I will continue with small positions sizing for a while until I can remain consistent enough to develop my edge.

Jeff.

April 29th, trading the news...or not

I have never been one to actively trade news, I just don't think that I can expect a rational reaction to any news whether good or bad and I certainly don't expect to be able to guess the reaction.

The US Federal Government Report today was no exception. Had I ignored the fact that there was news afoot I would have fared better. I had two outcomes in mind and I picked the wrong one based on jumpy streaming data as the traffic spiked. I should have just waited it out a few minutes THEN decided what to do.

Trading the chart alone and following my entry rules would have been a better course of action and would have given me the opportunity to cash in on the initial reaction to the report.

Here is the chart for SSO, it is worth noting that my preset limit price to enter this was $23.75 on the first round, I didn't place an order on the second round, in transit at the time.

I would expect momentum and target moves following reports of any kind so these would have been stopped tightly or just exited manually for profit targets or chart weakness.

From a purely techincal view this chart shows the increased volatility in price in conjunction with a spike in volume as the price tests the 200 minute sma. The price falls off the top of the move in what might be construed as a bull flag but with the high volume continuing into the down move it could not hold...sell. The next entry as price tests the 200 again on good volume for a more likely smaller trade...the 50sma would be the first target for stop setting and would have been the exit.

Basically, report or no report this should have been a no brainer trade.

Here is SDS, note the failed attempt at timing the report momentum in the wrong direction. Same applies here for momentum and target exits.

So, once again I see that the chart really does tell the story better than any attempt of mine to anticipate anything other than the possible moves following the setups as they occur. Volume was hard to read as it had dropped back to a more normal level but the 200sma switches from previous resistance on SDS to support nicely, that alone makes this a decent probability trade.

The worst of it was deciding to not trade anything after these only to see a nice setup for SDS in the last 30 minutes tying the 200, 50 and 30 into a nicely indicated move.

Here's the chart for that piece of cake. So, once again I need to just follow my rules as I have them set out and I will do much better.

One thing to note about playing the trades based on the 200sma for entry. It would appear to be a better trade to play the price as a reversion to the 200 then use the 200 as a stop as the price crosses. Some other time I will look at these trades and see what I need to see in order to call the move.

Jeff.

April 28th, reflections and SSO vs SPY

Seeing as this is really for my benefit, as journaling has become a sort of habit for me on many levels, anyone reading along, well, you can stop at any time you choose.

I stayed at home for the morning so I figured I might get some one on one time with the computer and the markets, not quite but close. I made some trades, wrote down some trade ideas that I did not trade... usually due to timing or some other factor... and reflected on where I am heading with my trading next.

I have been slowly adding to the various pieces of information that I try to assimilate in order to judge a trade worthy of entering. I started out trying to fundamentally analyse a company for long term purchases. I decided that was as much a crap shoot as anything else so I dropped it in favour of technical analysis.

I tried to find the right combination of indicators and trendlines for medium term trading that I could mechanically trade with. Finding the right combination is likely as hard as learning the data moves behind it, so I did that next. I now find more information is available and I am adding that to my knowledge base.

I have gotten over the nerves of placing trades, grown accustomed to taking losses and have stopped berating myself for placing a poor trade.

Over the past year and change I have made many hundreds of trades and I am quite familiar and comfortable with different orders, although I still need to work on getting my stops at the right price, far enough away for price movement due to volatility but close enough to keep my losses low.

Enough reflection. I have tracked enough winning trades to know a good setup when I see one... I now need to recognize the daily trend earlier to judge the direction that the great setup is likely to take.

BTW, I considered taking the hedged entry for uncertain moves and felt that the loss (two trade commissions, loss allowance on one trade and the possibility of getting whipsawed out of both trades) was too great a risk for a single trade. Besides I tried that and it is just more complicated than getting to know the next most likely move and reversing the position if needed.

Rather than natter on about any trading today I am just going to make a few quick notes on some chart shots. The SPY chart: (I'd use the SPX but I cannot seem to get the pre and post market data for the index)

Nice start to the day with that smooth move off the start. Zooming in to that first trade setup on the SPY chart:

Now here is the same time on the SSO chart, note the slight difference of position of the price with respect to the 200SMA... just enough to sway my idea of the trade entry direction, pretty major tidbit. Between this descrepancy and the spiking of SPY more often I decided to go with SSO for trading as of today. It's a leveraged ETF so it does give me more position sizing flexibility as well.

Checking the TICK for the same period yields inconclusive information as it is pretty middle of the road so far. Tick does take a jump right at the end of the pullback but lags price by a bit, as any indicator usually does.

Now the Advance Decline chart is a little more promising. The value cleanly tests -1500 and, even though remains under the averages it looks to be saucering nicely near the end of the same time period.

I have a table of eight of the major index ETFs and I recall they were all looking reasonably positive (no major red off the start anyway).

Of course none of this is conclusive to give a trade signal and I am sure that there were a few other factors that I could have looked at to determine that this was a very high probability trade to the upside. There were four other similar setups later in the day but none with as large or as sure a move. As fate would have it those were some of the ones that I played with...win some lose some. I need to recognize quicker when a price is just going to wallow and get out with a small profit rather than holding it back into a loss.

Oh, here is the SDS chart for the same trade, this shows the testing on the downside of this ETF, seeing as it is a short fund this just validates the SSO long trade that much more:

Longish post and I didn't even get into the other trades.

Jeff.

April 27th, The Plan

Well, I don't know how many times I've said in the past that I am going to stick to the plan and failed to do so as move after move looks good so I deviate...often losing any previous gains in the process. If nothing else my deviations serve to teach me some very important lessons in money management, humility and just some hard knocks to keep me in line in the long run.

Today was different. I stuck to the plan.

The only downfall was my timing was not so great. The first trade was well timed but short lived as I accidentally closed the position based on my first target, I meant to set a stop and leave it some room to move as it moved into the money fast. Another lesson.

The rest of the day was nicely setup and I set a few limit orders but did not place them in time as I was waiting for that one more penny move in my favour first... I should know better. I try to keep my maximum loss allowance very small but arguing with myself over a 5 cent stop or a 6 cent stop is ridiculous when it makes me hesitate, the order gets placed and the price moves away.

Here is the entire day chart for SPY including Friday's post-market and today's pre-market activity.

I always like to have some plan going in as it gives me somewhere to start. If it is wrong I still have a reference. So here is a snippet from my journal just before the market opened:

"SPY gapped down to open level...within range (previous day Hi/Lo range)
**target trades - Pivot Point/ 200sma/ momentum"

Here is a zoom in of the first trade, a nice entry:

Entry was exactly as planned, test of the 200SMA and the previous day low price, nice setup. I was setting my stop and for what ever reason I placed a market order to close, likely doing too many thing at once here... 23 cent gain anyway, better than a mistaken losing exit.

I would have been using a combination of the 50 SMA and the various support/resistance lines along the way depending on how far advanced the price gets. Exit would have been near the light blue line, yesterday's closing price, $86.66. Considering my entry was a solid one this should have been a nice trade of the day...$85.75 open for a 91 cps gain.

I decided to wait out the trades for the rest of the day as they approached and crossed the 200 sma, according to plan. While these may not be the ideal trades they give me a certain guide to follow and a good place to start with some decent profits. I'll get back to the fancier stuff later.

Other trade ideas, some I missed due to not being there (travelling home for lunch when the first one happened) and just missing the entries on the others jockeying for those pennies.
That one was from $65.40 to $66.32 in SDS, 92 cents per share. Nice.

Small target trade...the rest of the day was just all over the place.

Jeff.

Moving averages and the pre-market activity

I have been using Stockcharts.com for quite some time so I got used to them only having 0930h to 1600h available for intraday history. This led to not having any reliable means of using moving averages for the first 30, 50 or 200 minutes depending on which average I may have wanted to use for primary trading on any given day. The great days were days were the open was very close to the close price to allow the averages to be valid very soon.

Now that I am used to using the Esignal.com charting I have seen the advantage of using the pre-market activity to judge earlier morning trading using the moving averages, along with some other information, sooner.

I use yesterday as an example.

My PP200 plan is to use the 200 period moving average as a launching pad for trades with the 30 and 50 as directional indicators... along with other information but these are my initial setup guides as they are historically very sound for short term trading...long term as well but I have yet to test that out.

Here is the chart for SDS as I annotated it yesterday. I used the 50 sma as a launching pad for the long trades based on my bias for the morning and the position of the 30 sma (somewhat as trade number two didn't use it at all). Note how the green 200sma does not get near the price until after 1215h.

The chart below contrasts with the first. It is a shorter timeframe as the 0930h start is 1/3 the way into the chart and it only goes to 1430h. Now, I can't put all the pretty arrows and nice annotations in that I can on Stockcharts but all the daily and monthly pivots, daily OHLC are automatically there. So I numbered the similar trades 1 and 2

The first trade would be in at $68 (I'll use nice even numbers that are terribly idealized for simplicity). Following the blue 50 sma has me stopped out at $68.75. 75 cps, not bad but the entry is a little out in the breeze even though the primary pivot point is at $67.80...that's a 20 cps loss allowance off the start. Trade 2 is in at $68.90 stopped out at $69.45. 55 cps. Still not too shabby. The entry was right in line with the 1/2 R1 pivot and the 22nd opening price, not bad for confirming information so a tighter stop of 10 cps could be managed.

Total theoretical gain of $1.30 per share with a possible loss allowance of 30cps. a nice 4.3:1 gain/loss ratio.

Chart two, while not as pretty, has far greater potential. The pre-market price is climbing and crosses the 200sma at the open...right away that makes the 200 valid immediately even though it does not technically catch up until 1020h. Trading is about the pivot, the 30 and 50 are at or above the 200 and trending up, the price did not establish a new lower low. The resolution is not great but the price drops a tad to within 10 cents of the 200 on the way past for a prime entry at $68.26. The stops could follow the 30 or 50 but I would pick the various pivots and previous day open, close etc once they were crossed. The stop would move three times, $68.50, $68.90 and $69.25..stopped out. 99 cps....ideally but possible.

Trade 2 starts out with a more defined test of the 200sma as the price again drops within 10 cents. $68.30ish. The 30 and fifty are closer so I would use them as stops along the way this time in addition to the various lines. Hard to tell without having really been paying attention to this at the time with the different total timeframe....I scrolled through this a bar at a time and found that I would have stopped out at $69.40 as I ended up picking the blue 50 sma once it crossed the previous day's high at $69.25. $1.10 per share.

Total theoretical gain of $1.99 per share with a possible loss allowance of 30 cps. a nice 6.6:1 gain/loss ratio. The Esignals timeframe allowed a better entry price for he second trade and a higher stop setting for the first trade. The ideas behind the trades are the same.

Jeff.

April 23rd, SPY, SDS and the easy trade setups

I made some trades today, the following chart has them shown as numbered arrows. Red indicates a short position (long in SDS) and green a long position in SPY. I was trying to work with the market strength and weaknesses in conjunction with a few support and resistance levels. I didn't really do all that well though. Had I followed my rules I may have come out ahead a bit.

SPY for today:


OK, so I plotted the ideal trades today that I could have made by ignoring all the chatter that I have started paying attention to. Blue circles indicate the entry zones and the blue arrows the best path of the moving stops (not VTSOs). I chose the 50 SMA but could have used the 30 sma with similar results.

It is worth noting that the one trade that I did make according to my old rules I was stopped out early due to having a too tight stop which I blame watching too much data on... that and I was looking for a profit so I got trapped into the "small profit is better than none" mentality. Not a good place when a larger move is expected and possible. I would have obviously faired better using a break even stop then following the 50 up, as noted in hindsight.

SDS for today, same annotations:

The major rules used for these trades center around using the 50sma for entry given a cross over to the upside followed by a test of the line, this is the entry point. Initially a tight stop below the line is best so getting a good low price close tot he line is crucial. There are two ways to do this, wait and hit buy for a market order to ensure a position is entered or place a limit order just above the line in hopes of getting the test close enough. I decided to only use trades above the 50 and 200 moving averages for now. This favours trading with the short term trend and can lead to catching the longer term trend moves in a swing trade style.

Market order entry can be prone to placing the order too late and trying to catch a possible runaway price then having it return to the 50 sma and be too far out of the money and ending up closing the position. That or letting it run farther into debt to where the stop should be in the first place...only to have it keep going and losing more than initially anticipated.

Limits are important to keep the maximum loss allowance manageable. No limit order hit, no trade made.

Using those ideal trades, allowing a 30% hedge, commissions, 100 share trades and a losing trade or two still leaves $100 or so on the table... USD so about $120 CDN.

Back to what I know while gauging the new information against my trade rules to see how pertinent it may be in helping make my trade no trade decisions. I will only use the extra stuff as confirmation now instead of trying to trade off of it for now.

Jeff.

Evening ramblings

I had a post started that was going to have charts from today with one for each of the indicators, indices and ETFs that I am following right now...then I decided that I don't have the patience or the time tonight to finish it. Seeing as I did not trade today it seems a little pointless, although I did have some good trading ideas based on all the available information.

I should be able to do some decently serious trading tomorrow so I will set some basic rules:

1) early trading will be restricted to small loss allowances per trade and only two losing trades permitted before falling back to PP200

2) stick to my PP200 trade setups mid day using the various information as confirmation of my ideas, no counter trend trades allowed without 100 % correlating indicators

3) late day trades will only be permitted if I have profits from earlier in the day and loss allowance for any trade and all trades will be restricted to 25% of profits. no profits, no trades.

Early trading can be setup by using pre market activity to determine trading ranges or possible trending directions. Cumulative tick used to bias the trades, Advance/Decline chart for confirming the bias, sort of a double check. If it doesn't look very good then it doesn't get traded.

All of this still requires less hesitation when deciding on the trade entries, perhaps using leading limit orders for entry, I don't overly like that as if the move is fast and the price shoots past my limit in the wrong direction I am in too high or just in wrong.

Anyway, I'll see what tomorrow brings.

Jeff.

April 22nd

No trading today, or yesterday either as I was at a funeral yesterday. Today was just a bit of work overload in the morning that kept me distracted enough to not want to take any trades. I did keep an eye to the charts and saw some nice setups based on some of my newer information and some trades that I would have stayed away from due to this new info as well.

I'll post some charts.

I am starting to get a handle on more than just some of the technicals that I have been following. There is so much more available for the US markets and they are much easier and more relevant than in the TSE.

Advance Decline index, Cumulative tick, relative volume, premarket ranges...I think there is more but I can only learn these new ones a few at a time. Even though there is more information available I still believe that checking each of these with the last 20 minutes premarket is plenty of prep time. I know many traders will go on about having to be watching the Asian and European markets, reading all the news releases etc way before the market opens... Having a smaller handful of pertinent charts, indices and indicators that are familiar and relevant is far greater than frantically checking a lot of superfluous information that may or may not have a bearing on the day. Having said that I am sure that knowing everything is an advantage in it's own right...it is not a quick learning curve to get to the point of being able to use all of that information.

I feel that as long as your information is organized well and easy to access that a few minutes spent reviewing the premarket is all that is needed to be successful...I'll let you know when I am at that point. I am still assimilating all the ... stuff.

April 20th, SPX, SDS

I didn't post this on the 20th, I got rather tied up.

I couldn't decide whether today was a good day to get serious with my trading or not... I initially decided not but I would play around anyway and see what I might scare up. After looking at the premarket activity I decided that it just might be a good time to get serious as it was shaping up to be a trending day, and I was not disappointed. After the last while of run ups this was due...I think there is even a reasonable gap that was never filled not too long ago...but I have not really been following this market to really know it well.

My entry (Proshares S&P 500 Ultra Short- SDS) was later than I wanted it to be as I just missed my first clean entry point. I traded 100 shares and decided that I would allow a 20 cent stop off the start as I was in a little higher than I liked but I wanted in anyway. I almost used the stop allowance up but it took off shortly afterwards.

The only hassle was deciding where to move my stop up to so I decided to take a laid back approach and let the price move.... once I was in the money that is. I ended up using the 30SMA then the 50 SMA and got stopped out at 79 cps. Not bad, the peak was over $1 at one point.


I did try a second trade later and gave up some of my profits as I was too impatient to get in and did not wait for the setup, I also was trying to play it as a continuation of the trend when I needed to consider target trades at this point...I even let it go farther than I initially intended. I should have, and was going to, just stop while I was nicely ahead for the day after the one trade.


Oh, I almost forgot... the second trade was partially based on the advance/decline index ($ADD) as I just read something about it and saw how far it was off of zero...Good call, entry too high, stop too tight...lots of factors why the good idea did not pan out.


I do wish that I had not been so stoneheaded about the US market. I initially decided to stay Canadian for reasons that seem trivial now, especially in light of my testing over the last year. There is just so much more information and more tools available for the US markets that it almost does not make any sense to be in the TSX for anything other than some buy and hold, dividend re-investment plans and perhaps some other longer term stopless trading.


Serious, for me, is more a matter of degree as everything that I do is serious in it's own way.

Jeff.

Late afternoon SPX playing

I happened to sit back down just before 1500h and saw this nice setup in the SPX so I opened up my trading platform, entered SSO into my order box and waited for the appropriate moment to place a limit order for $23.60. I missed getting the order in but I noticed that the spread was only a penny so I didn't need a limit order to get a good inside fill, just a well timed market.

In at $23.64, just off the high from yesterday that was tested just after 1400h, medium strong positive tick. I rode the momentum up to the R1 which had just been tested earlier as well creating a nice bracketed target trade.

Out at $23.84, right at the peak as the price decided to head back down.

18 US cents per share. I forgot about the exchange so that adds 20% more profit due to the leverage action of the exchange rate...about $1.21 CDN for each $1 US.

I also noted that the ECN fees were smaller, 13 cents on the sale and none on the buy compared to 74 cents each way normally in the TSX.

SSO - Proshares Ultra S&P 500 ETF:

Just some notes on my playing this afternoon. I considered taking a short at the top (SDS- Proshares Ultra Short S&P 500 ETF) but figured one decent, albeit small trade is nice addition to the end of day for me. Besides, that would not have followed my trading strategy.

A final note, right now any trade that produces a net profit based on a good idea and well executed is a good trade.

Jeff.

WHOOOAAAA! SPX and my conversion

I have decided to watch the S&P 500 index (SPX) today and see what is going on South of the border as it relates to the market in general.

I have watched many video clips, read a huge number of studies and blogs on the SPX and always lamented the fact that I was not trading that index so all this plethora of information was not really very relevant.

But I kept reading and watching anyway as there were always a few gems in how these various people carried out their analysis, I was still learning something...and who knew, maybe I would end up trading that market anyway.

I am glad that I have kept up. I expect that all of what I have learned while playing in the TSX will be applicable in the NYSE and AMEX.

Back to the chart watching for a bit. In Global Gold I was trading in a relative vacuum. I had the index, of course, the bull and bear ETFs and two stocks in the index as well as my regular charting indicators. I used the TSX Tick accumulation but it was not reliable in any sense.

Today I watched the SPX for a short bit. The Cumulative tick was a very relevant indicator and my normal charting stuff still stands. There are a nice selection of ETFs in the 1:1 and leveraged arena. There are some great daily commentaries from some respected traders and one nice twitter feed that I have been following that gives nice overall information (no trade signals, I wouldn't use them even if they did do that)

I called one trade and watched it as it moved my way after crossing the 200sma, bounced cleanly off of the pivot point and returned to bounce again off of the 200sma. Using bull and bear ETFs that would translate into 40 cps and 20 cps moves (the 20cent move is in an ETF that is 1/3 the value of the ETF with the larger move...at least double the position size so the result would be the same). I think that technical indicators may have a larger effect on trading due to the much larger volume.

Keep in mind that these moves were small, 0.6% and 0.8% respectively based on the prices but this is a slow range trading day so far. Yesterday, using only my 200sma entries there were three trades all day. 35cps, 12cps and 71cps. I figured 10 cent stops to start and using only the 50 sma for moving stops once in. I will need to do some backtesting on this then work out other scenarios but it looks promising.

Downside, larger spreads, larger ETF valuation which means larger capital allocation and possibly larger allowable loss figures. I may go looking for smaller valued issues but I don't think I will find them. 10 cent stops or even 20 cent stops are within my loss allowance given the price of the issues so I am OK with that.

Well, that's all for now. Back later with some charts I expect.

If anyone is following along I hope my shift from Global Gold and the TSX altogether isn't disconcerting. I am trading in an RRSP right now so all tax implications are deferred, and I plan on switching over to the TFSA later, once I get settled, comfortable and gain some level of consistancy in these new markets.

For reference:

Index: SPX
Bull ETFs: RSU, SSO, SPY
Bear ETFs: RSW, SDS, SH

Jeff.

April 16th, crossroads

I always try to write some sort of market impression in my journal before the market opens. I think that I should pay more attention to these small musings.

Today's very first entry:

$290 TTGD seems to be a resistance level right now.

OK, that sounds pretty basic. I actually thought about entering a position in HGD and just holding it through the day...too bad.

Here are the charts that say it all:

S&P TSX Global Gold Index, daily six month chart.

Support and resistance does not get much more defined than that.

Same chart, 5 minute period, 10 days:

Amazing 200sma support squeeze...almost too good to be true. I mentioned using 5 minute charts in my medium term trading blog as they allow longer term views of shorter term trades and the 200sma still applies as if it were a 1 minute timeframe...actually the 200 applies across most timeframes, I just have not found it speaks to me in the 30 minute or 60 minute periods. This is the kind of setup that makes me want to give up the 1 minute charting and just place a trade in the morning and let it ride it out...if the stop loss orders were available I probably would have done so this week. This does not always go this way, if I were trying to trade multi day this kind of move would sort of suck as I waited for the price to move.

On to the minute chart:

Back to my journal entry. $290 was definitely resistance, I missed the very first ideal trade, that one would have been a keeper using the 50 for stops then moving to the various pivot points once I was way in the money...maybe even entering another couple of lots around 1145h as the S3 was broken and using the 200 sma as the stop due tot he very horizontal price movement.

I am going to go hunting for the NYSE and AMEX equivalents in gold as gold I know now. I added these two exchanges to my Esignals account today, tomorrow I may add the market depth for them as well but I get that through my broker, so maybe I don't need to spend the money on those until next month.

I only started playing again with stops last week and found how they were not working, so up until that point stops had no bearing on my trades.

Now I realize that I just need to be able to leave a trade run on it's own often, if that had been available this week I would bet that my trading would have taken a slightly different angle and I would have entered a lot of those times when I knew I was not going to be able to babysit the charts. Of course that doesn't necessarily mean that I would have made tons of money... although I think I would have done well enough. Today, as a prime example, that initial trade at the early peak I saw and did not take as I knew that I could not place a secure stop so I hesitated and chalked it up to misjudging peak. True enough.

Stop loss protection here I come.

Jeff.

Stop loss, VTSO and the US market.

Well, I did some playing today in the NYSE after some morning trading in the TSX.

Stop Loss Orders.

I can place the much desired stop loss order with a market execution...I have a position right now in DZZ which Deutsche Bank Gold Double Short ETN...as close to equivalent to HGD as I found easily. I have a stop loss placed so I can walk away and feel reasonably comfortable leaving it. I was not really analyzing this one for a good entry, just a decent entry to try out the stops with a 50/50 chance of being right. Limit order to get in, stop loss to hold my losses to $10. The rising 200sma is above my stop so if the price drops past that point I want out anyway.

Virtual Trailing Stop Orders (VTSO)

Seeing as the stop loss issue was a TSX restriction I figured I would also try this out as a VTSO is basically a trailing stop loss executed as a market order once triggered...and market orders are not allowed so....

VTSO works just fine. I have not had one executed yet but I am pretty much going to plan on switching over completely to NYSE issues now. I only have to deal with the dollar conversion for my trading allowance. At least I know that I can hold USD in all of my accounts.

I need to do some research to select the proper stocks and ETFs...and ETNs I guess.

The easy ones would be AEM.TO, YRI.TO and ABX.TO as they have US equivalents, AEM, AUY and ABX respectively. Major banks are all traded on both as well so financial issues are fine as well.

More on this later I am sure.

April 15th, the AM crunch

Seeing as I did OK the last two days I figured I should be alright today if I follow my rules closely.

Rules are fine as long as the playing field is still following the same action as when the rules were setup, or more importantly, knowing when the rules need to be bent, changed or just not to trade.

I need to do some backtesting for today's setups as the 200sma and the primary pivot point were close and the price seemed to range using these two points as a fulcrum. The end result is that the largest trade based on a 200 sma crossing is only half of the move and the move seemed to be restricted to between the R1 and the 1/2 S1. Invariably the trades did not fair so well as rather than taking the small profit each time I chose to hold the position to see if it would continue.

4 trades, 0, -4, +2 and -3 cents per share. All four were at a profit point when I wavered about exiting.

All four were good ideas, basically, but not necessarily for today's range activity.

True to form, in not following my rules or observations, here is a clip from my blog before I started any trades as I decided to wait for confirmation of any move first, let it shake out a bit.

Range Day?

Three things should have happened here.

1) watched the activity to see if my rules applied

2) set trades off the initial range high and low to fade to the pivot point or the 200sma (close today).

3) trading existing rules, use targets and set stops in the money...continuation unlikely

I considered #2 but was not comfortable with it as I have not done those style of trades before, which led me to trying my normal stuff...which is not a great plan.

Recognizing when particular trading methods will be good and when to change to another set is tough. I should probably consider sticking to targets for now completely as it encompasses most of the trades and allows me to keep my win loss ratio higher, which leads me to increasing my position sizing and increasing my net returns which leads to allowing me the flexibility to observe a larger loss allowance on those days when the price looks to be trending.

This strategy worked well enough this week so far as I took profits in the 12 to 15 cent range a few times and kept my losers tight...but I strayed.

Trying to bag the larger moves invariably can cost more as the big moves are less likely than the smaller moves and the loss allowance must be observed to give them room to get wound up.

I still need to consider the US markets to get the proper stop loss orders back into my plan. That alone will bring my comfort level up and let me set these automatically to remove my last moment thinking from the equation.

Charts to follow.

Jeff.

S&P TSX Capped Energy Index, playing with charts

I didn't do any trading or even tracking of this today but while I was doing some other work I thought that I would see what a chart from Esignal would look like here.

So this is the S&P TSX Capped Energy Index for today with a little trailer from yesterday.

All of the lines are automatically plotted for daily and monthly pivot points, open, high, low and close from yesterday as well as a 120 period linear regression with 1 standard deviation brackets. The down side for blogging is the lack of flexibility for notations. I think with my fairly minimal trading over the course of the day now that should not be a big deal, I can just plot numbers on the chart and reference them below.

Even though I did not trade this let's take a look at the setup and possibilities.

Based on the gap down at the open I might consider a gap fade to the pivot point but there was no clear bottom to the start so I would not have actually traded it until the 30 and 50 were both crossed... even then the 200 is pretty close so I would have skipped it in favour of waiting for the 200 test.

1000h gives the first test, (anything within 50 cents is a test to me), 10 minutes later is the failed rally, in at the pivot point short. The stops may have been tricky on this but with the slow price action down I would use a combination of the 50sma and rally peaks so the peak after 1100h would be my new stop...deciding to stick to that until it is tested again of following the 50 would be tough at the time...I like to think that I would hold out as I am in the money already and wait for the next peak.

I checked the HED (Energy bear fund) and I would have held through those peaks as the sma's are lower and I do acknowledge them in the fund now, not just the index ones.

The second test gets me in at $11.73ish, the next peak does not break the 50 sma in HED and is over the 200sma as well, the third set of peaks breaks the 50 but the 200 is so close that I would be using it primarily. I would have remained in until about 1415h using stops on the HED chart but I would have bailed when the 30 and 50 went horizontal on the index chart regardless...puts me out at about $12.13. So about 40 cents, not bad.

I do like checking other charts to see if my PP200 holds, so far it does so I could be tracking a few indices with their related ETFs at the start to see who is setting up at any given time...but I would need proper stop loss orders to do this without undo complication.

I think that I may be forced into the US markets soon. We'll see where that leads me another time.

Jeff.

Stop Loss Orders... not in Canada Eh? Pity.

Well, unlike the tea that is only available in Canada stop loss orders are not.

I thought I had everything nailed down and here comes a rather large issue that I had not expected. I have talked to people over the last year and change and the topic of stop loss orders had been talked about but I guess nobody knew that they didn't exist...go figure.

With Questrade I was told to set a stop order that I had to enter a limit price at the same price as the stop price...without clarification. I have used them often and had very good success doing so, stops were hit and positions closed very close to my stop price, sometimes higher (or lower for short positions).

I had noticed the odd stop that was triggered and was subsequently cancelled by he ECN, infrequent enough that I was not overly concerned about it. Not a major concern.

Lately I have had a number of stops not get triggered. I happened to be watching one as the price headed down past my stop and I ended up cancelling the order, which I should not have been able to do once the price triggered the stop, and just exiting manually. I chalked it up to a glitch. So it happened again and I decided to hold it and see exactly what would happen as I really didn't expect the price to keep going down...the order was not triggered until the price came back up to the stop price... basically it became a limit sell order as the price passed it on the way down and sold once the price met it on the way back up.

So, ever the curious one I contacted Questrade and asked about these orders, was told that what I was doing was right and they explained that they are a limit order...but I didn't want a stop limit order. "Oh, just hit the market order box". Trading was done for the day, (Thursday), so I tried it yesterday.

Market stop order does not work. Yesterday I got a CSR that knew what to look for... He recognized that I was trading on the TSX... The TSX does not support stop market orders.

HUH?

That was basically what I said...although I was online chatting so it didn't come across that way.

Apparently it is a Canadian trading rule and has nothing to do with my broker. I emailed the TSX bunch and got the same answer.

So, I cannot rely on a stop to work the way I thought they were. I will still use them but need to set alerts to tell me when a price is getting close to my stop so I can manage the trade closer, that was not my goal as I wanted to be able to walk away from a trade once it got to a certain point with the knowledge that once the price I set was breached, no matter what, I would be out of the trade.

Today I spent a few minutes checking out other avenues of trading to allow for stops. The main one is to trade NYSE issues instead, perhaps emini futures or forex. If I was trading full time I would not be as concerned about this but I do not want to have to babysit trades once I get into trading longer term timeframes. I can easily just trade NYSE issues that are TSX counterparts, stocks traded on both exchanges, as they track each other easily and are represented on the indices that I am familiar with but I think the best bet is to end up trading US exchanges exclusively.

Most of my trading right now is in my RRSP account so there are no US tax implications, just exchange rates for currency most likely. The TFSA is not so lucky but at least there are no CDN tax issues there.

What to do.

Back to the regular stuff for now I guess. My alert volume is turned up a bit higher now.

Jeff.

April 14th,

Not a spectacular day but satisfying none the less.

S&P TSX Global Gold Index:

The chart outlines pretty much the head space for the trades.

The opening was the most interesting part and it was the part that I managed to miss almost altogether. The three points that I started with yesterday apply today, as they almost do every day. This time the opening price was within pennies of the closing price which means that all of the moving averages were valid right off the start. Also the price was really just continuing yesterday's activity as the overnight was almost seamless with this morning...other than the morning volatility.

Given the start my plan going in was to catch the price as it bounced off of the 200sma the very first time, volatility is my freind at times like those, I was tied up with other issues and was not even there beyond the first minute, just enough to see the open.

10 minutes in the price peaked at the convergence of today's pivot point, yesterday's opening price and the 200sma...my kind of entry point as the price started to head down. Target was S1 but would hold with a smallish stop to see if it headed farther, target two was the low and I would have bailed at that point as I did not expect a trending day. Perhaps a 15 cent move in HGD.

Trades that I did take were 12 cents, (-4) cents and 12 cents. The second was not well thought out.

Jeff.

Easter Monday, the fallout

From my earlier post:

1) IF the price gaps or moves up quickly over the 200sma AND the market seems strong generally THEN look at fading the opening gap back to the daily primary pivot point OR wait for the 30 and 50 SMAs to catch up and re-evaluate the plan, best action could be to wait for the test of the 200 sma as it is likely valid earlier

Waiting for the 200 test usually works out better as the market has shaken off some of it's shenanigans.

The market was not strong so my first trade entry was not the best, I should have been expecting more ranging earlier than thought so even just waiting for the 30 and 50 to catch up was not enough. Thankfully I only made the one trade and realized my error. Waiting for the 200 was called for and worked out well enough. There were two good trades but I was not in for the second one as it tested the 200sma, yesterday's higha and 1/2 R2.

As I was only trading 200 shares of HGD I managed to end just even after commissions. The third trade would have been the profit for the day...about a 15 cent move in HGD.

All in all I am not really disappointed in the day...other than a nasty issue that came to my attention last week that I finally got a straight answer on today...another post for that though.

Jeff.

Easter Monday, preview S&P TSX Global Gold Index

Seeing as I am doing these chart studies and including a bit of previous day activity in the assessment for trade setups I figured I should do one that is current. Tomorrow I am off work and the markets are open, I actually thought that they would be closed so this is a bonus for me.


S&P TSX Global Gold Index, April 9th.

No notations are necessary for this, just an overview of the day.

The drop off over the last half of the day will help to determine initial trading plans for tomorrow.

1) IF the price gaps or moves up quickly over the 200sma AND the market seems strong generally THEN look at fading the opening gap back to the daily primary pivot point OR wait for the 30 and 50 SMAs to catch up and re-evaluate the plan, best action could be to wait for the test of the 200 sma as it is likely valid earlier

2) IF the price opens even THEN wait for a test of 200 sma to play short OR fade to the 200 sma

3) IF the price gaps down THEN wait for some sort of confirmation of a continuation of the downtrend(30/50 zone acting as resistance) OR confirmation of a short term reversal (30/50 catches up and is crossed by the price.

Basically I am not certain what to expect yet, the price of gold is up since Thursday...I'll wait and see tomorrow morning. I would have liked to see the close been at the 200 sma or had the price cross late in the day which would setup a good start with the 200 pretty much caught up.

I guess there are no excuses tomorrow.

Jeff.

The Pivot Point Bounce, S&P TSX capped Energy Index

I didn't set both days on the chart but the previous day has some bearing on the entry decision. The late day rally crossing the 200sma and the opening price being close to the closing price leaves the 200 intact with respect to it's immediate validity... this is a whole topic on it's own sometime but this particular situation does not require the 200 minute catchup for the 200sma.

S&P TSX Capped Energy Index:

The ideal entry is at the daily pivot point just under the $200 mark as everything up to that point leads to a good likelihood of an uptrend day...or at least a R1 target which is a good enough initial target.

The chart pretty much says it all. This is one of my favourite setups as the stop looks so easy to follow along lazily with the nice slope right from the start, pretty much. I have a tendency to stop too tight too soon to try to lock in some profits, as small as they may be and the result is often getting stopped out too soon and watching as the trade runs away. I then lose sight of the rest of the chart setups as I think that it has moved too far to get in now...sometimes I am right and sometimes I am wrong.

Jeff.

Consolidation Triangle, S&P TSX Global Gold Index

This is a classic pattern that I always watch for and I was surprised to see such a fine example on Thursday. I was not trading, being the Thursday before the Easter long weekend I had a little too much to keep me occupied at work. I was able to jot down some of the prices that I would have entered at as the market unfolded so I will list those after the chart.

S&P TSX Global Gold Index:


The setup from the previous day was a downtrending afternoon with a short rally into the close which did not break the 200sma. So, from my journal "Expect a drop off the start similar to yesterday and rally to 200sma. If price crosses the 200 immediately, HGU, if not perhaps a momentum downmove, HGD, for a small target, tight stop, or wait."

Well, I wasn't far off the mark as my "prognosis" covered the two most likely outcomes. I waited rather than considering the immediate trade for the downmove...even though I was not trading for real I use the same thinking as if I were. If the price does not do what I expect then it is time to re-evaluate and watch for another setup given the new data.

First trade as the price tested yesterday's low, which held, so HGU. Second trade at 1000h as the price reached for, and did not attain, the 200sma... short or HGD. Next trade was long again, HGU as the price again tested the same low price, it held. Back to short, HGD.

Now, the apex is always interesting as the price normally breaks one way or the other for a decent target at least, this day it knocked me out as I had two active simultaneous trades when it faked a break up, then headed down. I even entered a long trade as the fake out tested the 200sma.

The final trade was as the 200sma caught up to itself at 1250h (200 minutes into trading) and the moving averages converged with the monthly S1 pivot in a general downtrend. Super high probability trade to the downside with two or three decent entry points.

HGU trades for the long plays:
0947h Buy $10.58 Sell $10.85 Gain 27 cents ps Return 2.5%
1025h Buy $10.58 Sell $10.72 Gain 14 cents ps Return 1.3%
1054h Buy $10.63 Sell $10.71 Gain 8 cents ps Return 0.7%
1200h Buy $10.73 Sell $10.69 Gain (-4) cents ps Return (-0.3%)

$ 0.45 gain per share or 4.2% overall return on trades

1000h Buy $8.42 Sell $8.55 Gain 13 cents ps Return 1.5%
1048h Buy $8.47 Sell $8.55 Gain 8 cents ps Return 0.9%
1105h Buy $8.53 Sell $8.53 Gain 0 cents ps Return 0.0%
1245h Buy $8.53 Sell $8.70 Gain 17 cents ps Return 2.0%

$ 0.38 gain per share or 4.4% overall return on trades

Overall this played out as well as I would expect.

Jeff.

The Opening Gambit, S&P TSX Capped Energy Index

I decided that, because I am a very visual trader, I would put some of my rules and setups on charts with some notations for easier reference. I had a hard time trying to write this stuff out so that it made sense without the charts, so here is the first.

The Opening Gambit

Earlier last year I tried a bit of very early trading, as in the first minute or so of the market open. I did not have much luck getting orders filled in a timely manner and I often got nailed with a bad fill. The problem was that I was testing the market open and had no real plan other than to see what kind of order fills I might get. I don't recall specifics but I am pretty sure that I was trading a stock that had a fairly wide spread which is indicative of a lower volume issue. I have since tried again with a plan and found that my earlier observations were clouded by the resulting losses for those early tests.

This is a reworking of the strategy with some rules for entry and exit.

First, some general comments about my use of the simple moving averages.

I use the Simple Moving Average (SMA). Some use the exponential, weighted or even volume weighted. I have plotted them all and none make any real huge difference, it is more a matter of using one consistantly so any will do. I like to keep it simple, literally.

The 30 and 50 SMA for the short term trending and the 200 SMA for the longer trending. All of these are based on the minute timeframe. I plot daily and monthly pivot points but those have no direct bearing on most of the entry and exit plans used in the chart studies. I will use them as they often will confirm an entry or provide a great price point for a stop order, so I may plot some that are relevent

In this example the trade is a rather speculative trade and has the possibility of backfiring, and backfiring very quickly so getting out quickly is important. Entry can be through the use of a limit order or market order, I prefer the later as it gets me in, period. The exit, early on, will be a manual market order or a stop market order if the price moves in my favour in the first few minutes. I do like to get the stop in as early as possible as the worst time to have a connection issue is on a busy market open day, slow transactions or and overloaded broker can cause major trauma to an account in a hurry...so it is a risk to be aware of.

S&P TSX Capped Energy Index:

(I put MACD on there just in case anyone likes it, I don't use it as it is far too slow an indicator for me)

In this case the price opens a little lower the the previous day close, about $2 down. It's not clear on the chart but the price drops about 70 cents from the open then heads back up and crosses teh 200 SMA in the next minute. There is no test of the 200 but the 30 is already over and the 50 was already trending up from the day before so the price is very quickly over all of the moving averages.

Part of the key is the previous day, the price dropped over the last half of the day and started a late rally into the close crossing the 200sma... essentially the next day is a continuation of the same rally and provides the 200 sma test. This makes it something to watch for, had the end of the day been different the initial action might have been to quick to consider.

The stop can be set right away at the 200sma as if the price hits this point again the trade was most likely wrong. Early trades will be expecting a fast move so the 30 or 50 sma can be used as a stop. I don't have the stats but if the price crosses the 30 it is likely lost momentum and may reverse or wallow anyway... if the 50 is crossed then this is even more probable. They are good stop points. I could always split the difference and use a 40 sma or just set the stop at he 30, move it back up to the 30 when the 50 catches up to the stop, basically steps connecting the 30 and fifty as they rise in unison.

For the sake of math, the profit on this move would be $7.75 or 4.1% of the opening price. This is important as trading HEU, the leveraged ETF for this index, would yield 8.2%, in theory, for the same move, less some allownce for spreads, commissions and other fees. Checking the chart it would actually only yield 6.9% or 24 cents per share given the most likely entry and exit points...again, less commissions only as spreads are included in that approximation.

Jeff.

April 8th...good day to trade

It seems to be my lot lately to stand by and see the trades and not be able to make them...for a number of reasons today. Perhaps I should just sit back and not see what is going on in the market until I can actually make the trades....

That would lead to taking trades that are not timed the best. I feel that I am better served to keep my finger on the pulse even if it is only to record where my entries and exits would have been. At least I know what the results would have been and I keep my edge alive.

So, here is the chart and the general trade setups that I witnessed on the Global Gold Index. As always I would be trading HGU and HGD for the long and short plays respectively:


So it would have been a very good day to have been trading today.

I am starting to get more of a feel for the 200sma setups with respect to other important support and resistance levels and how the 30 and 50 smas seem to help as confirming or negating indicators. I don't use MACD, RSI, Stochastic or even volume any more...well, volume a bit, but between the charted lines and the streaming market depth quotes I get all the information that I need to make the calls on these trades. Generally I have stopped trying to call the peaks and troughs as they are not as probable as a good momentum 200sma cross with correspondingly good looking support.

This leads me to investigating more widespread trading in other indices. If the 200 sma is the major indicator for these seemingly few lucrative trades then perhaps it is worth considering paying attention to some simultaneous sector trades...of course that assumes that my backtesting shows similar qualities and that I can get the other distractions down.

But I am getting ahead of myself here, I must concentrate on nailing this first Gold index trading into a consistent profit vehicle first. I'll still do the back testing of other indices though, that is fun to check out anyway for future reference.

Jeff.

Skipped a day

I did some trading yesterday but my heart was not in it, weather was miserable and I lost focus.

I also had another thing in mind. I decided to have a look at the backtesting available in esignals.

Well, I am not familiar with their formula language enough to write my own so I tinkered with a couple that were already in and just changed some colors and settings. Very interesting tool but I do not want to invest the time into learning the programming just yet. I ended up setting a backtest to include only 200sma crossings to allow for both short and long trades based on the Global Gold index.

Too many trades, huge profits, not really what I was looking for.

It did allow me to overlay a green shading to quickly recognise a period where the price was over the 200sma though. This was visually helpful in scanning (manually) through the last month to see where the trades would be based on my previous PP200 strategy.

This was more interesting so I took some notes based on four entry criteria, long positions only.

Ignoring GLobal Gold and watching only the ETFs, HGU first, I counted 33 trades that met my PP200 rules in that the price crossed above, tested as a low or just remained above the 200sma (minute scale). There were far more but they were obvious no-goes based on the previous setup, huge downtrending sma, sharp whipping, cross too late in the day...etc.

Placing these trades and about 90% of the move on a spreadsheet, tracking the number of trades, commissions, a (-30%) fudge factor, as many losing trades as winning trades with a certain stop loss for every single loser and comparing different position sizing... I saw a nice picture of a month of easy trading.

So, the long and short of a HGU study showed profits overall even trading only 100 share positions... sure there were a few losing days overall but the final net profit was still in the 8% range for the entire account. This bumped up to near 70% if all trades were based on a 500 share position. I choose to not trade over 500 shares right now...or even in the next month or two even with a good success rate so I use this as my maximum.

Now, I changed a few rules for these trades. Remaining longer at break even levels to let the price move. I have found that a lot of the moves that involve the 200 sma tend to be longer trending moves. I did not apply particular stop methods other than to have the 50 sma plotted on the same charts. I expect that using the 50 sma would lower some of my larger trade gains as the pullbacks may go too low for me to hold. the 70% fudge already mostly accommodates this as I noted that some trades were greater than 70% of the move before stopped and some were lower but 70% seemed to be pretty average.

I ran HGD as well and came up with far less in returns, but still positive. Keeping in mind that these trades would be the equivalent of shorting Global Gold they would make a good addition to the HGU profits...one does not get traded with the other so, even though I could hold both positions simultaneously, I would not have to. This allows me to look into other stocks or ETFs to trade at the saem time to also boost my bottom line...after doing some more research first though.

HGD at 100 shares for the month was 1.8%, 500 was 34%. Still respectable.

Add the two up for a 9.7% to 104% returns...net...tax free.

Now for the execution...as I type I have Global Gold setup with an alert to let me know when it is approaching the 200sma so I can watch it more carefully to see if it sets up for a trade around lunch time.

The proof will be in the pudding.

Jeff.

Stepped exit stops for Friday

Here is the chart for HGD as it would appear using the pivot point and various sma stops along the day as Global Gold trended down:



The chart for Global Gold for the corresponding day showing the various support pivot points

After market chatter

Well, yesterdays trading ideas worked out well. As it turned out there was no ranging of the gold market, just a nice downtrending day. I had worked out three exit strategies aimed at maximizing the time spent in HGD should Global Gold happen to remain in a downtrend. I didn't run the fourth.

The last method includes letting the price run while holding back using the 30 50 AND 200 sma for exit prices. The strategy would be to move my stop to net break even early to minimize any losses quickly...I don't mind getting knocked out of a trade at this point even if the move continues, part of my capital preservation plan. Then using the 30 sma as a stop while the price move is steep, switching to the 50 sma on a pullback toward the lines.

Once the price has passed one or more of the target PPs the stop is moved to those prices. I use the pivot points and halfway points between the points to allow for slightly tighter stops. I now use the monthly pivots as I have noticed them being at least as valid as the daily stops. This puts me somewhere between the 50 and 200 sma.

Worth noting that with Esignals all of these points are plotted automatically so I eliminated the need to calculate and manually plot points and lines on charts...I can now just pull up any chart in a moment and it will automatically have all my studies and indicators placed. I'll go through those in another post.

This is a tough strategy to follow for me as I like to have shorter trades and on the days that I decide to try this the price is ranging and I do not stay in for long. Yesterday was a classic downtrending day though and it would have been a very good move as the total index move was from about $330 to about $303...HGD moved about $1. Considering that my normal position size at this point would be 500 shares (I could do more but 500 seems like a nice number and I have not tried more than that recently to see how it might get executed).

I have noticed in the past that the last 30 minutes of the market sometimes reverses for a bit so my exit would either be a tighter stop as the market nears EOD or just selling for the nice profit around 1530h.

I am working on setting these various strategies and rules down in writing in one place for easy reference to remind me of my goals and plans on the fly. I hope this will remove some of my more speculative moves, make my entries and exits more calculated and also allow me to remove the various interruptions as the plan is set...less thinking and therefore less emotional involvement.

Jeff.

Friday, to trade or not to trade?

OK. I set my original goal for trading 4 days per week for 40 weeks. That leaves 12 weeks of 4 day trading weeks as "holidays" or just non-trading days...Also the typical 4 day week leaves Fridays or perhaps one day per week that doesn't look like a good day for me. I like the Friday idea.

Having said that, I really have not traded seriously yet this year and I have used up 12 weeks, or so, so far.

In my playing around I determined not everyone can do this and, while it is easy, getting to the easy part does not come quick. I fall back to the 97% of people who attempt to trade fail. I have probably mentioned that number before. I think that applies to the vast majority of people who try anything that requires some level of commitment... the definition of failure in trading is just more black and white as you are either profitable or not. Then of course there is the in between where people may make out OK and give it up, I expect that counts as failure in the sense that they did not continue to the pursuit.

Today I had a moment when I considered just stopping trading altogether... NAW! While I do enjoy it the only real frustration occurs due to other attention getting issues that keep me from placing the trades as I see them set up. Today was a prime example of that yet again.

It went like this:

Pre market stuff:

Activity of the European market (FTSE) (neutral)
Current trading price of gold (Down)
NYSE cumulative TICK (75 range high and low = neutral)
Global Gold Index (Neutral but looking like a bit of a pre-market uptrend)
Crude Oil (Downtrending a bit)

Plan A) Global Gold index, trade HGU for long and HGD for short moves
Wait for the SMA squeeze for entry
Monthly pivot point target for a downmove = $320
Monthly 1/2 R1 point for an upmove = $342
Expect a ranging day perhaps.

Trade setups and notes...(none taken due to the afore mentioned attention getting issues)

No squeeze as the price dropped cleanly, one quick rally below yesterday's close...
0934h HGD $7.05 as TTGD made a new low...4 minutes into trading.
0947h HGU $12.80 as TTGD bounces off of the monthly PP target...counter trend but solid
0952h Exit HGD at $7.20 after the clean bounce.
0958h Exit HGU at $12.90 30sma tested, pullback, rally, failed to make a new high, exit
1016h HGD at $7.37 as TTGD dropped past the monthly PP target
1017h Exit at $7.32, stop set too tight for this entry and entry too high...wait for test this late
1045h HGD at $7.34 during consolidation, shallow, approaching 30sma...tight stop
Three exits planned here, all using stops.
1109h Exit using 5 cent incremental stops at $7.50
1138h Exit using the 30 SMA at $7.58
1142h Exit using the 50 SMA at $7.57

I am done for the day I expect so the trade tally is as follows:
HGD = 22 cps (Extra 7 or 8 cps using the SMA exits)
HGU = 10 cps

I can calculate this using commissions and position sizing but the point is to be consistently gaining, the rest will look after itself.

BTW, I did manage to squeeze one real trade in, any guesses as to which one it was?

Jeff.

Re-focusing

I have been very un-focused in my trading...always. Trying this and trying that to see how things work, and perhaps make some profit...although profit has not really been my primary goal.

As I mentioned in a recent post I am working on trading ideas rather than the actual trades, although I will place the trades to see how the execution works for me to prove the idea out as often as I can.

Today I started with the same premise as yesterday, check the pre-market chatter to see what was going on. Today I only had about 10 minutes before the market opened to form an opinion, something that I might continue as I tend to over-think things often.

Activity of the European market (FTSE) (up at the open but neutral trading)
Current trading price of gold (Down)
NYSE cumulative TICK (UP, +150 range high for pre-market, so far that I have seen)
Global Gold Index (Down near the 200SMA)
Crude Oil (up and looking like an early uptrend)

Expecting a continuation down followed by a range day.

Trade plan A) Enter HGD for the drop in Global Gold (TTGD) and hold it.

Trade plan B)if TTGD rallies off the start wait for a pullback to a pivot point or significant line to enter a trade for HGU

The move:

The price dropped from the open to past the S3. HGU jumped over 30 cents in reaction.

The execution:

HGD at 0934h $6.66...stopped out at $6.60 very shortly.

The idea was sound, the analysis was bang on but the stop was too tight or the entry was too high...actually I didn't wait for any pullback and it happened as the price of TTGD returned to S2 before continuing it's drop...my stop was the equivalent of being just below S2 in HGD so I was out for the sake of 2 cents.

I ended up getting in later at $6.79 for the last of the particular move I was anticipating, sounds familiar.

It is worth mentioning that my stop got hit too close again. Usually these are for the sake of a few cents so the temptation is to widen the margin...but then when do I stop? I think the better plan is to wait for the better price entry or let the trade go.

No chart today, not much to see, actually.

April 1st, no foolishness here.

April Fools' day was uneventful today, at least for me, I had my head in trading and work too far to get into the spirit.

So to gather all the items that I looked at to day to determine my plan I included:

Current trading price of gold (UP)
Activity of the European market (FTSE) (neutral)
NYSE cumulative TICK (DOWN)
Global Gold Index (up but downtrending slightly)

This looked like a higher opening but a range trading day.

Figuring on that I decided on a position very early in HGD to play the Global Gold short ETF to fade the opening move with a back up of reversing in to HGU long ETF upon failure of plan A.

I made a crucial mistake. I thought that the orange line was 1/2 R1 when it was, in fact, 1/2 R2. This meant that the opening price was higher than I thought...opening above R1 leads me to aim for a long position rather than a short or at least give the price more time to decide where it might be heading...a little consolidation period was in order. So I got shaken out of HGD and lost 7 cents per share...3 more than I anticipated due to a slow order execution.

Reversing into HGU worked out well as I gained 15 cps. Rather than trying to play htis little downside with HGD I waited it out to see where the price would go, seeing my earlier mistake I figured that the day was likely going to head up and perhaps hit R2... the third trade was in,YRI Yamana Resources, see chart below. I intended to stay in and hold this one but got stopped out by a too close stop setting, still saw 6 cps.

My last trade was a last minute (for me) entry to see if my gut was right about still going long given that the price of Global Gold had already passed R2. Actually, no gut involved, straight technical analysis and longer term swing style trade entry using the 30 and 50 sma as my trade entry criteria. I could have stopped this one closer and seen more profit but 5 cps was enough to keep me happy as this was a tech move not a profit move, I managed to catch the second highest peak of the day. Trying to catch the last one would likely have had me stuck in the trade overnight.

Yamana Resources, YRI

This chart has some interesting setups and things going on. I was not really paying attention tot he volume but the rough trendlines in the volume chart are good indications of things to come in the stock price, classic supply and demand at work. This is one of the reason I like stocks over ETFs, more information.

The volume shrinks as the price drops, bottoms and consolidates. This goes from a negative convergence to a negative divergence. As the volume levels off the price wavers just above yesterday's high, at the convergence of the SMAs and above the 1/2R1 line...perfect. I had about 5 chances to enter this trade at the same target price, or just hold it for a 5 cps risk until it moved in my favour...which it did. I used the first prime opportunity, my nature, and rode it through, it was a shame that I did not let the break even stop ride a little longer to let the price move farther...oh well.

Deciding to move the stop to take some profits or leaving it to give the price room to move is my greatest hurdle and costs me the most potential profits. I need to work out a plan of action that is consistent here...either take early small profits all the time (I can do that as my risks are also very small) or let the price ride all the time (I can also do that as I may lots of calls that would net some really nice gains had I let them go).

The important thing that I am doing t\is to get stops set very early, immediately after the entry to stop losses form getting away on me and to prevent a connection failure causing a loss as well.

Enough for today. More fun in store for tomorrow.

Oh, stats for today,

Winners vs losers 3 : 1
$winners/$losers 1.24 : 1
Net gain 19 cents per share

Jeff.