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.

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.

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.

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.

March 9th, initial trial...not by choice

Today is the first day of implementing my newer rendition of my PP200 trading plan by incorporating the London effect and a long haul approach to exiting the trades. My initial intent was to just come out fighting and trade these calls for real to see some profits or performance reflected in the cold hard numbers on the account balance. That was not to be the case, once again.

As I type I am in the middle of a trade that I was prepared to take as I watched the moving averages converge and squeeze the price out. I ended up having to take a call that I could not put off so I just jotted down the worst case inside quote entry price. Had I had 60 seconds more before the call came in I would have been in the trade and still been able to take the call based on my stop approach allowing me to not have to track the trade so closely.

HGD at $ 8.96.

The momentum took the price of HGD up to $9.10 quickly and I placed my stop at the breakeven point of $8.99. I chose to follow the 50sma of HGD for stop movement for now so I have my stop moved up to $9.02.

Note that these will be real stop loss orders placed when I am trading these for real. I am liking the idea of letting the price run rather than sweating over every penny and deciding to take the profit or let it run...well...I don't actually sweat about it, it was fun, but the relaxed approach is a much better plan to use over the longer term. I can still get some regular stuff done while the trade progresses.

It is worth noting that our daylight savings time is not followed by those across the ocean so the London market is now open until 1200h our time instead of 1100h. Interestingly my entry point shifted exactly one hour later, helping to prove my point and giving me that much more confidence in my new method.

As I finish this post my virtual trade is at $9.11 (inside bid) and my stop is at $9.06. My profit, if stopped is $40 based on a 400 share position, less $12 in commissions. $28 tax free for the sake of placing the trade and moving a stop every once in awhile. It's only the beginning.

Jeff.

March 5th

No trading day today. I decided to watch the London effect up to 1100h. Their market was declining and the Global Gold jumped off the start then chopped about right up to 1100h. I was going to just place a trade at an opportune technical entry where indicated on the chart but I was not in a situation to monitor a trade properly so I let it slide, I jotted down the price and set three exit plans up to see what would happen.

The red lines and notes are the normal exits that I might take given a jumpy morning market expectation, out at the first sign of weakness to capture my profits.

Green lines are a more moderate method using pivot points and/or moving average crossovers at the 50sma.

Blue is the long haul trade of the day of just entering and setting my stop just above my entry to capture a minimum of profit, then resetting the stop as each of my targets are passed. convincingly. That would basically follow the 200sma with perhaps a little jump to the 1/2 R2 once it was crossed then just exiting at the end of the day.

Needles to say the long haul was the most profitable today. I intend to go back and review the last 20 days of intraday trading to see the real effect of the London market then to see how a long haul approach may work for more relaxed trading. As long as I see a small profit in a day I feel, without checking yet, that I may capture more of the larger moves. Starting later in the day appeals to me, fits my schedule better and just going in to check stops a few times sounds interesting. I likely will not trade tomorrow.

Jeff.

February 27th, I changed my mind...chart

Well I changed my mind about posting the chart for yesterday's rule breaking day.

As much as I did lose money I had fun making the trades. If I am to take this seriously I have to stop having quite so much fun until a later time when I ride some profits and use smaller positions to test other strategies...rule breaking is necessary but I should not be doing that right now.

So, here is the chart for yesterday with the trades that would have occurred Had I been diligent and followed my rules. I went back tot he trading platform and used the same charts that I use during the day and just made mechanical buy/sell decisions based strictly upon rules and the indicators that I use.

There were couple of trades that I may have let run longer as they passed the first targets so I will use those shorter runs for my calculations and add my normal fudge factors, I used middle entries if I thought that might have gotten in soon in the minute, I used worst case if the spread was not huge and I applied a 30% deduction to lower the net return number.

Stats:

18 trades
$393 net profits after fudges.

Some of the newish rules I used included paying attention to the sma squeezes as the price approached a pivot point and the sma was near and acting as a boundary...I noted these with the purple dashed lines. I would not place a long trade if the price was bounded closely above the PP BUT would use the conjunction of the sma and PP as a launching for a short trade. The 1030h trades did not pan out so well using this but I only had a small loser. The 1445h was a perfect such setup and worked well. That was one that I did take for real, although I got in a little later.

Otherwise the 50 cent entry, momentum entries, some of these I did take for some decent profits but I was just not patient or paying as close attention as I should be. Like any other plan I pretty much need to take every setup during a continuous timeframe or I risk choosing the sucker trades buy chance.

I may only trade Tuesday Wednesday and Thursday next week due to schedule constraints, and perhaps to let me be more focused while trading.

Jeff.

February 26th update

I did some trading again today. I am starting to see more of what is going on in the interplay between the ETFs, the index and the stock that I use as reference. I had ten trades today and only two lost money, 6 cents and 5 cents per share. I missed out on the initial moves as I was a little gunshy after yesterdays platform fiasco...even though it went in my favour I did not expect any long initial moves today. The first rally was too early for my comfort level regardless. The pullback, although expected, came quick and I got fooled into thinking that the price was starting a new short term uptrend...so I decided to ride it out. The price never made it to the 1/2 S1 line until later so my setup did not materialize perfectly. I am starting to recognize the interaction between the price, my notations and the 50sma now, it is a stronger factor than I gave it credit for as I could have used it for my HGD trade rather than waiting for the pivot point comfirmation.

Here is the chart for the day.
Green boxes are HGU trades, red are HGD trades, blue arrows are my loser spots, very small and short so hardly worth trying to box them. The red arrows are later potential HGD trades and the green are HGU.

Once again this is only the chart for the Global Gold Index. As I am trading the Horizons Beta Pro Global Gold ETFs this is all I need to see the trades for the day.

There really was not a whole lot of large moves to catch and I was working for every penny in the morning as I played either side of S1. I could have rode the 200sma cross as I was already in ahead but chickened out on the smallish pullback. I did jump back in once the move was confirmed though, shame to have to pay two commissions for that move. The trades were sound and filled well but the overall moves were small enough that the real profits barely covered my commissions. I still came out ahead but not by much. I would have finished better had I planned on trading the day as the last setups were pretty solid. I also would have been farther ahead if I was trading a few more shares per trade...100 shares per trade more and I would have added $51 to my meager net profits and still been charged the minimum commission rate of $4.95.

The joy of Questrade's small commissions, even once I get larger than 500 shares the rate is 1 cent per share up to a maximum of $9.95. The ECN fees start to add up then as they are charged on top of the commissions. 37 cents per lot and usually, but not always, both ways at the buy and the sell.

Jeff.

February 20th...Gold tests $1000

I neglected to save yesterday's chart for the Global Gold index.

The price opened low, headed up and crossed the 200sma far earlier than I expected. This led me to wonder what was up as the price jiggled along this line for a while. I did place a trade expecting a move up but once I saw it not materialize I jumped out just moments before the price plummeted $4 in a few minutes. Had I not been long I would have gone short as soon as the price crossed and tested the 200. Sometimes it is hard to be nimble enough to reverse a trade as quick as these materialize. In hindsight I should have bailed earlier as I did hold the trade too long...although I also should have noted a resistance level in AEM that matched up with the peak in GD after my trade...I could have had a small profit and been ready for the reversal.

The rest of the day was a wash as I decided to play with my Forex trial account for a bit instead of trading.

Today, I checked the price of gold before the market open and saw that it looked like it was heading for 4 digit territory. I really did not think it would even touch the $1000 threshold today let alone cross it for a little while. That fact does not change the action expected for today's price in the Global Gold index. A drop off the start to bump the 200 then a return to the day open...the rest was unknown.

So there were 14 trades, marked by the red arrows, that I could have taken, not all great trades but no real losers in the mix. The first circled one was the one that I considered even though it was outside of my boundary, I figured it should be a good high entry as the price dropped off. I won't bother with any of the excuses for why I did not place any of these trades as I saw them set up. While the excuses are all good, they are still excuses. This is something I anticipate correcting for next week.

Trades 2 through 8 are textbook pivot point entries, although #6 was not technically a retest it might have been expected and traded. 5, 7, 8 and 9 are strong PP200 as they meet both trade criteria, testing a pivot point, the primary no less, and the 200 sma at the same time. The last one before 1130h was the kicker and in order to be sure to be in that large move all of the other trades would have to have been made as this move was not guaranteed, it could have happened in either direction at any one of those times earlier...odds favoured a move up though.

The last two were again PP200 trades... the last move on my chart is most of what was left as the price is now hovering around $339. That second last trade was not so great and the less probably one, but I never know for sure...all I could hope is that I realized it was not and got out soon enough to reverse the trade. It looked like a clean retest two minutes after the drop so I would be free an clear for it.

For my own personal gratification of knowing what I might have been able to pull off here I roughly figured the entry and exit trades.

Rise in Global Gold = buying HGU (Bull fund), drop in Global Gold = buying HGD (Bear Fund)

10 trades, I dropped two redundant ones...would have just still been in the previous one and two of the ones off the start that I would not have taken...these just cut the profit by a little bit anyway.

All up was $533 net tax free. So I apply my 30% fudge against me to bring it to $373.

Dropping my two top trades and applying my 30% fudge I still see $159. Still well above my daily goal right now.

All in all I am more than satisfied with the prospect of trading this particular plan and looking forward to the profits to come.

For anyone following along I expect to not be blogging this weekend at all. Other stuff on the go.

Jeff.

Overview

I liked today as an overall example of my PP200 plan almost to a "T".

I put a standard zigzag overlay on the chart and it was bounded by a pivot point or the 200 sma to mark entries, other than that little peak at about 1400h.

That little bounce back to test the 200sma once it crossed was classic, the return to the primary pivot point for another test and entry and the exit up around 1/2 R1 right near the end of the day. The zigzag does nothing except point out the pattern after the fact.


I won't bother calculating out the rest of the potential in this day but I will point out to myself that these trades were amongst the easiest to see, and the easiest to trade. I seem to like playing the tighter range bound trades for real and fight for every penny, go figure. I expect that if I had to rely on this trading as an income I would not be so lax in getting trades on the table.

I may do some trading this week yet but I think that my schedule will be a bit free next week to be able to really try this out.

Jeff.

February 18th the balance of the trader's lament

Other than this morning's shenanigans I have no real excuse for not making the trades that I will be outlining here. I called each one of them cold but failed to press the order button. I believe that I am suffering from a form of trading fear, which is odd as I have typically not had any trouble making trades...even in cases where I KNOW that I will expect a loss if not just a very high probability of one. I have blown through $100s of dollars in a day to test theories, order execution, my willingness to take a loss so I know that I can take a loss.

So I must suffer from a fear of PROFITS!

Go figure. I wonder if they have a phobia name for that kind of fear.

So, the morning chart, I will skip the HGU and HGD charts as they track well and make no real difference in the interpretation...other than the drop in price is a gain in price on the HGD, being the bear fund.
First blue circle: teh morning's shenanigans, I dropped a box here to represent an HGD trade that I would have entered but I will leave it off of any calculations. The next circle was my "not quite PP entry". Given the pattern here I was thinking about buying HGD at the peak to catch the drop that I figured was coming...that one was just a thought though as it didn't really follow my PP200 plan.

After the price fails to remain below the S1 line, I watched as it climbed back up, then tested the S1 at about 1020h...order was set, finger on the button...AEM was at a support point as well so it was a good confirmation...I just didn't order. My "non order" is the first green rectangle representing my entry at the bottom and my exit at the top. The second rectangle was exactly the same story...everything was a go including the good ol' finger on the trigger...

The 200sma as resistance (green sma line) was a perfect setup, as perfect and predictable as they come. AEM was also hitting it's respective 200sma, both HGU and HGD were doing the same...although they are usually close to in line with the index.... then the small bounce off the dashed S1+1/2. Even since there are two more medium sized trades that setup but I have just closed down my trading platform for the day.

The "trades":

Buy $14.50 Sell $14.90 Gain 40 cents ps Return 2.7%
Buy $14.93 Sell $15.17 Gain 24 cents ps Return 21.6%
Buy $7.56 Sell $7.70 Gain 14 cents ps Return 1.8%
Buy $14.96 Sell $15.00 Gain 4 cents ps Return 0.2%

$144 net gain overall or 3.6% overall return on $4000 portfolio.

Had I taken the first two trades, even given the odd moves, another 42 cents per share...or another $144 net was on the table. I might have stopped trading after those two alone, or at least after the listed trades.

Now I just have to work on my order entry, perhaps glue a 1/4 inch extension on my order button finger so when I hover and think "order" I will hit the button by mistake.

Jeff.

February 12th. Nothing spectacular.

Today was a mostly uneventful day. I marked the two nice entry points for the morning with blue circles. I choked on getting in as I saw them setup, thought "I should really be making these trades" and didn't. Yesterday's early losses had me second guessing my gut. The pivot points were nice and wide due to yesterday's action so when the price dropped to within 3 cents of the primary pivot point, (barely off the bottom of the chart) it should have been my first trade of the day. Then it rallied touched the 1/2R1 mark (dashed red line) it was a key exit and a potential entry into HGD for the slide...if I was quick enough. Considering that the first would have been near a 50 cent clean gain I might have called it a day after one trade...nahhh!

I did get in at the day's high (first green arrow) by buying HGD for the reverse move (Bear ETF) but chickened out (first red) as HGU rallied slightly so I only captured half of the already small move. Later I saw the setup for a possible 200sma resistance and got in just right (second green) and got out at the then bottom (second red).

I missed the middle peak trade just due to trying to wait for a sign that it was actaully going to head back down. It crossed the 1/2R1 too cleanly on the upside for me to enter comfortably either way.

Both were slight winning trades but very small...the whole point though is that I called the two tougher trades, got the direction correct, got in and got out clean enough, although not as potentially profitable as the early stuff.

BTW, the $15.05 peak was yesterday's high that was tested five times and that I missed, I was going to be damned if I didn't take that trade again.

The rest of the day was not work trading as everything was very small...HGD faired no better as the largest move in the afternoon was about 10 cents and it was not clean, lots of chop. For some strange reason I seem to be drawn to trading the choppy stuff, which is why I decided to can the fake trades. I can fake a good moving day so I need to actively trade those days and often they are not known to be good moving days until they are moving...I need to be in trading mode right from the start as often as I can.

Oh, I should mention, that steep rally at about 1015h did not follow any of my current rules for entering a trade...I could have jumped in once it crossed the 200sma on the way up but it was moving too fast to do so. That was when I decided it was going to peak and I would play the downside. I miss my short selling but I have got this figured out now.

Jeff.

ETFs for gold...HGU and HGD. Day 1

ETFs are what they are, an Exchange Traded Fund so their basic price follows the related fund closely with some variance in the actual purchase and sale price due to the auction style of trading, just like a stock in that regard...there is a spread between the bids and asks. Enough about that.

HGU - Horizons Betapro Global Gold Bull Plus Fund
HGD - Horizons Betapro Global Gold Bearl Plus Fund
SPTGD - TSX Global Gold Index
AEM - Agnico-Eagle Mines, a stock for some reference as I am familiar with it and it tends to lead the index slightly.

I will only chart HGU for today's trading (fake)

The short story:

0934h Buy $11.23 Sell $12.00 Gain 77 cents ps Return 6.9%
1009h Buy $12.07 Sell $12.30 Gain 23 cents ps Return 1.9%
1030h Buy $12.31 Sell $12.50 Gain 19 cents ps Return 1.5%
1105h Buy $12.31 Sell $12.51 Gain 20 cents ps Return 1.6%
1154h Buy $12.32 Sell $12.44 Gain 12 cents ps Return 1.0%
1258h Buy $12.62 Sell $12.89 Gain 27 cents ps Return 2.1%

$ 1.78 gain per share or 15% overall return on trades

That translates into $474 virtual dollars profit or 11.9% return on portfolio.

The slightly longer story:

The main reason that I did not actually trade these today was due to the fact that I slept in, health issue and missed alarm, I think I did not wset it properly. I ended up with 10 minutes to do my chart setups for a whole new bunch of stocks and funds. So I saw the first trade setup and just did not have all my ducks in a row.

I followed some pretty hard and fast rules for these trades though once I got them going. Being a newish trading setup I decided, after missing that first large move, that I was asking for trouble trying to make some real money today.

Entries were based on limit orders set 2 cents higher than the pivot point being tested. I could also use market orders to be sure of a full fill each time but I will keep to limit orders to reduce the possible jumpy trade price filling me higher than I would like.

Exits were based on the next pivot target, following if momentum was good and exiting before targets if the buying weakened.

I did track a few trades for HGD, the bear version, but didn't count them as they were less than stellar, profitable but small and really were against the trend altogether, just for practise.

Jeff.

Backtesting

I was a fan of backtesting when I started looking at trading as it gave me some cool numbers to indicate what I "could" have profited had I followed a particular strategy. I learned a few things about the fallacy of backtesting in the process, namely that it is historical and can be misleading.

The key is that the testing proves that a strategy has potential and needs to be followed up with live testing.

I did a bit of historical testing of what I am calling PP200, just 8 trading days worth.

I used the PP, R and S lines primarily, the 200sma for some reference and the 1/2 lines occasionally. I placed the orders on the first pullback to test the respective lines and exited on a re-crossing, weakening of the price, next line hit or, if the move had a large momentum then when the price move weakened after the next target was crossed. Orders were only placed if the pullback came to within 2 cents of the target line to give me a mechanical entry criteria. Price used was the target plus 2 cents for the entry and minus 2 cents on the exit. Trading was stopped every day at 1300h. Commissions are accounted for in the net profits.


There were very few losing trades, which surprised me as I expected a fair number, perhaps as high as 40%. I only saw 6%, so I will assume that is higher in real life. There were fifty trades altogether.

TLM, long only trades

Average daily return (based on the full $4K portfolio) was 1.45%
Total for the period was 11.6%

HED, long only trades

Average daily return (based on the full $4K portfolio) was 2.68%
Total for the period was 21.45%

$1322 total combined net return or 33%.

My normal fudge is to drop the net return by another 30%, so that makes $925.40 or 23.1%

Interestingly the HED trades only number 16 but almost doubled the returns from 34 trades of TLM. I think this may be due to the fact that HED follows the capped energy index and smooths out the variances and hiccups along the way whereas TLM is a straight up stock. I believe that this will require some testing under fire as this mitigation may prove useful for smoother trading results.

Either way that is a decent return for two weeks trading. One of these days I will get around to applying this strategy to prove the results.

I keep in mind that all of the live testing that I have done in the past was with real money and I had no qualms about losing a bit here and there in the interest of learning the ropes. This month I have been very hesitant to pull the trigger even though I know my strategy. It would appear that "getting serious" has some psychological implications that I did not anticipate.

Jeff.

January 16th, Friday

Normally I stay away from trading on Fridays, along with a few other holiday related days, so I only watched some key times to see what was happening. I would like to take a look at three of my charts anyway to check out the PP200 possibilities that occurred.

Talisman Energy first.

The premarket action looked like a similar setup as yesterday, likely headed down after a gap up. With this kind of gap I would expect a gap fade strategy to work well...if I could short. The first trade would not be a sure thing as it is only on the halfway point between PP and R1. Two and three are specifically using 200sma and end up being very small as the 1/2R1 acts as resistance. Fourth is right off the PP but again a small trade. All told there might have been 45 cents altogether here, 300 share trades assuming commissions and no other losses would yield $105...making every trade and exiting well.

Suncor

The first possible trades were only playing with the 1/2R1 so they were not solid PP200 trade setups...but could have been traded given the rest of the indicators being in good shape...but they weren't as I checked a few times. After 1130h was the key time here as the price came down to meet the 200sma and it acted as support. The following four trades were solid and could have garnered $1.15 per share...200 shares less commissions for $190. The fifth trade would have been the kicker for a good 70 cent run.

I really need to get comfortable with this ETF as I am only playing long, as I have mentioned many times. The chart after the fact looks really spotty as the price appears to jump around. This is the uncertainty factor on these. The quotes show another story though as they smoothly slide from price to price and I think I could nail some of them in between the gaps. It looked like three decent trades but this is even farther out specualation than I have been doing on other charts.

Jeff.

January 15th, recap

Famous last words, "Knowing when to walk away. ", I pulled that from earlier. I think that I walked away at about 1230h. OK, so walking away at that point was not necessarily the best timing. I had appointments for the kids and other work stuff to complete so it wasn't like I chose to...although I am aiming to not be trading in the afternoon.

In hindsight I see that there were half a dozen decent long trades. I was telling myself to watch the 200sma as I waited out the morning, I expected a turn at that time. I wasn't wrong but I couldn't take advantage of it. This is the point of PP200 as the price makes that crossing it serves to set the trading bias for the rest of the day. It is nice when the price opens and doesn't move quite as fast as it did this day. Ths 200sma is more influential earlier on those days.

My target is to trade 4 days of 40 weeks in a year, so missing a few days here and there is no big deal at all. I am not concerned or worried...a little miffed that I could not show a profit immediately but, on the other hand, I also show no loss. My strategy has kept me away form the poor trades during those times when I was watching the market.

This proves that particular part of my plan works as it should, loss avoidance is better than loss allowance.

Jeff.

Speculation about today and PP200

I checked in at the end of the day to see what kind of action the market had and specifically TLM. I quickly plotted the trades that could have been taken based solely on catching the price at or within 2 cents of the pivot point line.

Without getting into each trade the total captured price move over the day would be $1.46 ps(12.2% on the trade)...over 300 shares trade that is a decent $438 (10.9% on the portfolio).

Now, for these I usually apply a fudge factor to account for slippage, early exits and whatnot. IF every trade was made I would use 70%. That's $1.02 ps (8.5%), $306 overall (7.6%).

Here is where the 200 part of the PP comes into play. On all of the trades the 200 sma was as far as the next or last pivot point or half PP line. The one exception is the red circled possible trade as the 200 is right above the nearest 1/2PP line...too close to be considered a target althoughthe first trade might have managed to squeeze 4 or 5 cents profit it is not a good setup for a trade.

This is where I will miss my short sells as there was another $1 movement that I could be short selling based on PP200 as well...perhaps I would only get 70 cents of it but on a down day the returns would be reversed.

Jeff.

January 13th, final tweaking

Still no account setup yet so another day of fake trading. Yesterday was a learning experience due to the short range, today was one just due to the mediocre range. Market is still under 9000 so still uncertain. It needs to either head down or up before there will be much large volatility again...but that is fine, perhaps I will start trading cash when the market picks up it's heels and I can start on a good day.

No matter.

TLM chart for the morning. I added dashed lines to represent the mid range of the pivot points, specifically the ones that are off the chart so this gives and idea of where they will be AND provide another possible zone of resistance and support. I have known that these can be as relevent as the PPs themselves sometimes, in their own way, I just didn't plot them or really use them.

I did a bit of swing style trading as the price moved up, I could have just held the first trade but I wanted to see some profits after yesterday's poor performance. The bluse circles are trades that I considered but waffled on so missed the entries...I refuse to chase a price as it is quite likely to retest the entry price level before moved the way I anticiapte it...that just puts me behind more should I be wrong. This has proven to be a very useful strategy by keeping me out of some losing trades altogether and letting me exit gracefully and without fear.

Buy $12.00 Sell $12.18 Gain 18 cents ps Return 1.5%
Buy $12.12 Sell $12.25 Gain 13 cents ps Return 1.1%
Buy $12.27 Sell $12.27 Gain 0 cents ps Return 0%
Buy $12.16 Sell $12.23 Gain 7 cents ps Return 0.3%

$0.38 gain per share or 2.9% overall return on trades

HED privided one decent trade. I kept plugging away at TLM until the SPTEN looked like it was going to give out for a bit...chart at the bottom.

I entered earlier...or later than I ought to have. I would not have go in on the early trade as I was just exiting TLM so waiting for the better setup would have been more prudent. I think I should have exited this trade at S2 in order to have folowed some of my plan. I held through and let it ride up to S1 though and madea decent gain.

Buy $17.25 Sell $17.65 Gain 40 cents ps Return 2.3%

$0.40 gain per share or 2.3% overall return on trade

The following SPTEN chart shows the ideal timing for HED in blue and the actual timing in red circles. This shows the inverse correlation between the S1 and S3 on HED with the PP and R1 on SPTEN. Had I had the dashed halfway point between PP and R1 it would have been clean support and would have corresponded with S2 from the HED chart. I marked the relationship between SPTEN PP and HED S1 as the prices crossed them at about 0945. This led to the assumption of other correlations and makes it easier to follow the concurrent charts.

Total tally was $144 net for a portfolio return of 3.6%.

January 9th...more could have's

Well, I am nearing the end of the speculative chart work now. So this may be the last one...perhaps one live one for Monday if my account doesn't get linked to my platform until sometime on Monday.

So let's take a quick look at Friday. I set the pivot points up as usual:
Dark blue is the previous close, Light blue is the primary pivot point,

Green are S1-3, Red are R1-3
Averages - Red 30sma, Blue 50 sma, Green 200sma

Green arrows are buy and red arrows are sells

Capped Energy chart

The move off the start is a rather steep selloff and would indicate some good shorting opportunities and I would jump over to HED to take advantage of those, but first let's look at the TLM chart.

Activity here didn't start until late into the morning as the p;rice bounced off of the S1. I don't mind holding this one through some pullbacks as the price difference is slow and not large, having said that the exit just before 1130h is mainly due to the swings and failure to get any closer to the nearing 200sma. I may have jumped on the previous pullback but it is hard to say without being there live. Second trade is pretty standard but deviates from a pure PP200 a bit. Trade three is right on the money and as the price cleared the 200sma so well it would be worth holding for at least the PP target. Again the price is not that volatile so it is OK to risk holding it through some of these pullbacks.

Buy $12.46 Sell $12.60 Gain 14 cents ps Return 1.1%
Buy $12.50 Sell $12.62 Gain 12 cents ps Return 1%
Buy $12.47 Sell $12.72 Gain 25 cents ps Return 2%

$0.51 gain per share or 3.1% overall return on trades

300 shares traded for $153

Now to HED for the "short" action

Based on the Capped Energy chart this was really the only decent trade as this entry corresponded with Energy falling through it's PP...as the PPs more or less line up with this fund it makes the trades fairly easy. With Energy leading this the trade is worth holding through the small pullbacks.

Buy $16.45 Sell $17.00 Gain 55 cents ps Return 3.3%

$0.55 gain per share or 3.3% overall return on trades

200 shares traded for $110

SU can only be traded for 100 shares per trade so it will not be prime on my list anymore but is worth watching yet at least to keep it in my list for some time when I can trade multiple lots.



Long positions were hard to find on this one. I may not have even made these trades at all if I were only watching SU or I may have tried and lost on a couple of trades before giving up. Only trading 100 shares makes this a tougher one to make any real headway on as the volatility is not that great.

Buy $28.05 Sell $28.40 Gain 35 cents ps Return 1.2%
Buy $27.60 Sell $27.76 Gain 16 cents ps Return 0.6%

$0.51 gain per share or 1.8% overall return on trades

100 shares traded for $51

Jeff.