There's not much to update, thus far it's a pretty boring rangebound session.
We did get the insider selling vs buying ratio today, it came in at 1169 shares sold for every 1 share bought. ORCL was leading the pack on sales again.
The Euro has given up it's opening gap, there's a lot of news out on Greece this morning, not so favorable.
So when something happens, I'll let you know. For now you might as well just go back to bed.
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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
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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
7 comments:
Gap down on the vix points to investor complacency below 20. That is prob the biggest and most important thing to notice this morning.
And early US Dollar strength
We broke to the downside on the Euro wedge, now forming another in the 1 min time frame. Their is alot of profit sitting on the table that traders at some point won't want to risk. If they start to feel that the risk is starting to go against them, they might flee to the exits to be the first.
The 1 min also broke to the downside and now it is forming a rising wedge on the 1 min. Another bearish pattern...the market hasn't followed the dollar trade yet, but we may be seeing the start of some weakness. The big boys might just be sitting in the weeds allowing retail to buy some shares thinking everything is ok. The euro/usd trade seems to indicate all might not be. Let's see where it goes.
It seems that the market is able to go up when the EURO tries to bounce but does not give the same respect to any downside pressure. Obvious market manipulator of HFT's at work here. We should be trading well below Friday's close based on the dollar. Again, Obama was speaking today. We'll see if the market follow the normal course and goes up because he was on TV
Little reminder of the Fall session of 2008:
2008
Sep 15 Falls 504.48 to close at 10,917.51 on news of the collapse of Lehman Brothers and Merrill Lynch
Sep 17 Falls 684.81 to close at 8,920.70 on fears of AIG rescue failure
Sep 18 Rises 410.3 to close at 11,016.69 on news of world wide central banks injecting billions and billions into the credit markets
Sep 19 Rises 368.75 to close at 11,388.44 on news of government bail out plan
Sep 29 Falls 777.68 to close at 10,365.45, down 6.98%, largest point loss in history
Sep 30 Rises 485.21 to close at 10,850.66, up 4.68%
Oct 09 Falls 678.91 to close at 8,579.19, down 7.33%
The DJIA has fallen 5,585.34, or 39% in one year
Oct 13 Rises 936.42 to close at 9,389.61, up 11.08%, largest point gain in history, fourth largest % gain in history
Oct 15 Falls 733.08 to close at 8,577.91, down 7.87%, second largest point loss in history
Oct 16 Rises 401.35 to close at 8,879.26, up 4.02%
Oct 20 Rises 413.21 to close at 9,265.43, up 4.67%
Oct 22 Falls 514.45 to close at 8,519.21, down 5.69%
Oct 25 Falls 312.3 to close at 8,378.95, the DJIA has fallen 5,785.58, or 41% since Oct 9, 2007
Oct 28 Rises 889.35 to close at 9,069.12, up 10.88%, second largest point gain and fifth largest % gain in history
The euro has been consolidating sideways after breaking out of it's bear flag, now it appears to be breaking down.
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