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.