Today we had several trades trigger and several more add to nice gains. Thank you for the emails today from members that traded the update of the breakouts and made good money-options aren't my thing, but if the updates helped you make money, I'm very happy.
3C was clearly correct in calling the strength early, however, the distribution isn't done and I believe I know why the SPY is sitting right in a zone of resistance between a closing breakout and and intraday high breakout. IT seems to be wasting time, setting bull traps and distributing short term trades.
All of the information which I really want you to read carefully, is at Trade Guild as this is a defining market moment. I'm pretty sure after you read and see what I posted, you will be of the same opinion-the market is waiting for the jobs report on Friday and it appears, as we have been able to see the institutional movement in earnings, we are seeing a leaked jobs number and if 3C is correct, it won't be good. Keep that in mind when you are setting stops for long trades.
Tomorrow, as you will see, I have every reason to believe we will see downward price pressure, the divergence I used last night to call for early and mid afternoon strength is even bigger tonight, but in the opposite direction.
You will see how the dollar is gaining momentum which is bad for the bulls in the market. UUP is a good looking trade right now, I'll put it up in the a.m. but I would consider it a buy now.
Again, the highest probability trades, until we get the start if a reversal are on the list with limit orders-3 triggered today-all for upside gains and GOOG added more for those who bought it earlier in the month when it first appeared-actually in July. We should see more breakout-limit triggers tomorrow, I think specifically in the cheaper stocks so make sure you have alerts set and I'll update as they trigger. If you get a trade that makes a decent profit in the cats and dogs, I'd consider taking some profits before Friday's jobs report. I think we have one more day of the same old or decline but close to the resistance zone. The trades I have setup are pretty safe as they are on limits. Once Friday hits, you'll start seeing the "AT market open trades" which are a bit riskier, actually in a clear directional move they are not, we just aren't there with Friday's report, but these trades are the ones where we can make some serious money and if the report is as I think, then the core positions on the short side will start making some serious money.
I'm going out on a limb and saying this-I believe from what I have seen, the traders on Wall Street have been setting up small trades and using the momentum to make retail traders chase prices as Wall Street sells and goes net short. The 1 min negative divergence you will see at EOD at Trade Guild is extreme and the position it occurred at suggests short selling in large quantities.
The GDP was bad, a bad jobs number and I am saying right now that I believe preliminaries have been leaked, will sink this market. Read the post at Trade guild, if you have questions email me. Get familiar with the shorts, even ones that have stopped out as tomorrow I will revise the entries and stops during the day.
There-I said it-leaked numbers, disappointing jobs report-market reversal and shorts will rule the day.
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Risk Management
Get the Most Out of Your Experience
- * Understanding the Head-Fake Move Part 1
- * Understanding the Head-Fake Move Part 2
- * The Holy Grail of Investing and Trading-MUST READ-MUST UNDERSTAND IF YOU WANT TO EVER MAKE CONSISTENT MONEY IN THE MARKETS
- * Member's Video-SWING TRADE ONE ENTRY SYSTEM
- * Placing Stops-What you should consider...
- * A Currency Crisis
- * A Currency Crisis Continued...
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My Charting Software
3C Quick Start
Many of the charts you see here at WOWS are my proprietary indicator 3C which reveals underlying institutional money movements and often contradicts price. To understand the annotations made on charts, you must first understand that 3C has no numerical value, it is a pure divergence indicator. Positive divergences represent accumulation by smart money, negative divergences represent distribution by smart money and when 3C trades with price, that is trend confirmation.
The chart annotation system is simple; white arrows represent relative positive divergences, red arrows represent relative negative divergences and green arrows represent trend confirmation. When 3C is in a white or red box, that represents a leading positive or negative divergence, leading divergences are the most powerful.
We analyse 3C in multiple timeframes, the longer the timeframe the stronger the accumulation. 1-2 min timeframes represent intraday moves, a 5 min timeframe can represent a day or two and 15 min timeframes average trends of a swing trade nature. 30 and 60 min charts can move the market for a month or more and daily charts can be over a year.
You'll get use to seeing the charts and understanding how the multiple timeframe analysis works and works well.
Welcome to Wolf on Wall Street.
The trades featured here are meant to maximize returns with the least risk and highest probabilities. Unless otherwise mentioned, all trades are meant to be executed at market. I prefer long-term trending trades which perform well in rising markets, but really stand out in declining markets. However, we get occasional one day gifts 30,40,60% 1-day gains. I'd urge you to consider taking some or all off the table in such cases, the markets don't give gifts like that often or for very long. Most of the returns that make the system outperform so well come in short-entry trades. If you are opposed to short trades, this is not the system for you, unless you are ok with buying an inverse ETF. If you would like more information about the truth about shorting stocks, just email me.
Risk management. I recommend a specific and consistent risk management approach to all positions. In most cases we try for 2% risk money (2% of portfolio) unless such a position size exceeds 15-20% of overall portfolio in actual position size. Each trader is different and each has a different allowance of open trades. I like to keep the overall money in the trade around 10-15% of portfolio per position in case of gaps against you. Stops are generally executed at the end of day and I personally never place a stop order, all my stops are mental; remember, the middle man gets to see everyone's cards. When you are not in tune with the market or opportunities just aren't that spectacular, I take my risk per position down to 1% or even half a percent of portfolio value.
Each trader is different and must determine their own level of comfort with risk. I do have a channel stop which I provide to TeleChart/StockFinder users for automated stops, I appreciate you using my links to sign up if you do. The Trend Channel catches trends and works well as it automatically adjusts for each stock's volatility. Arbitrary exits based on nervousness about the markets WILL decrease the portfolio performance dramatically. This system will not ever get you in at market bottoms or tops. The recent 1 year performance against the Russell 2k buy and hold had the system beating it by 3:1. Ultimately it is up to you as to how you proceed, but I'm always available to help you determine what might work best for you.
Risk management. I recommend a specific and consistent risk management approach to all positions. In most cases we try for 2% risk money (2% of portfolio) unless such a position size exceeds 15-20% of overall portfolio in actual position size. Each trader is different and each has a different allowance of open trades. I like to keep the overall money in the trade around 10-15% of portfolio per position in case of gaps against you. Stops are generally executed at the end of day and I personally never place a stop order, all my stops are mental; remember, the middle man gets to see everyone's cards. When you are not in tune with the market or opportunities just aren't that spectacular, I take my risk per position down to 1% or even half a percent of portfolio value.
Each trader is different and must determine their own level of comfort with risk. I do have a channel stop which I provide to TeleChart/StockFinder users for automated stops, I appreciate you using my links to sign up if you do. The Trend Channel catches trends and works well as it automatically adjusts for each stock's volatility. Arbitrary exits based on nervousness about the markets WILL decrease the portfolio performance dramatically. This system will not ever get you in at market bottoms or tops. The recent 1 year performance against the Russell 2k buy and hold had the system beating it by 3:1. Ultimately it is up to you as to how you proceed, but I'm always available to help you determine what might work best for you.
I do use other scans and systems when market conditions warrant their use and may change strategy with market conditions.
The MOST IMPORTANT tool you have to bring you long term success is RISK MANAGEMENT. There are plenty of articles linked at Trade-Guild.net on Risk Management. We can be wrong 75% of the time and still outperform the market with solid, consistent risk management.
Position Sizing
The position sizes noted in the positions @ 2% risk of portfolio are based on a $20,000 portfolio-adjust as needed. Due to tight stops, there is the possibility, even probability that one position could take up the entire portfolio. You need to decide how many positions you want to trade and reduce the position size according to that. For instance, if you want to trade 5 positions in a $20,000 portfolio, no one position should be valued at more than $4,000-not risk money or 2% rule, but share price entry x shares.
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Futures Update BR-EXIT Edition - So the conventional wisdom couldn't have been more wrong. Those chasing risk and closing hedges couldn't be in a worse place right now. I would still remin...7 years ago
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