At the top right you will find a link to November/December Trade List. I just added 16 Inverse ETFs. Tomorrow throughout the day, I'll be adding more trades that are not ETF based, approximately another 15. Be careful of correlation with these trades, I've tried to cover several different areas that all have nice 3C and technical patterns. I usually enter limit trades whenever they trigger, which is why I encourage you to put the watchlist limit $ on an alert system like Telechart provides or www.FreeStockcharts.com I usually will use my stop out level only at the close ( a few minutes before the close, not intraday unless something gets too far out of control).
As seems to be the pattern, this week's FX market saw the Euro gap up and within an hour and a half, it has come back down to lose the entire gap.
I'm a bit suspicious of all the afterhours activity last Friday, it feels like something big is coming down and there may be some traps along the way. It is unusual for the big players to show their hand unless there is something that has changed radically.
Back to the list, entries, stocks and stops are all just my take, you have to make them your own according to your risk management and style, but I like all of them and will add more. Remember that you lose the ability to use profits on inverse short ETF's unlike real shorts where you can re-invest part of the profits-it's just a function of long vs short and these inverse ETFs are actually long positions, but give you short exposure. All of them are leveraged. I prefer to maximize profits with leveraged positions and mitigate losses with risk management, but there are less leveraged or no leverage options for those of you not comfortable with the leverage these trades provide.
If you have questions, feel free to email me any time.
We have a lot on the world stage right now and not much of it looks as if it will provide bullish surprises, in fact the exact opposite, but I would not swing for the fences just yet and make sure all trades fall within reasonable risk management. I prefer never to let a losing trade take more then 1-2% of my total portfolio. If you haven't already, please read my risk management article linked at the top right of the site.
Have a great week.
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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
3 comments:
This is a good information on silver:
http://news.silverseek.com/SilverSeek/1290625106.php
Brandt,
I've read many times that leveraged ETF's should only be held for a day to a max of 1 week due to daily rebalancing. Trend can be in your direction but you can still lose money.
Please comment.
ETFs have seen a lot of controversy/lawsuits. It is true that they are meant to reproduce a 1-day return. In a choppy market with high volatility, the compounding in these ETFs can lead to losses when they have barely moved. I've done fairly well with them when treated as a swing trade, if they trend then that's fine (that's how I treat most trades anyway). I personally like them for the big picture exposure to an industry, but I wouldn't use them exclusively. While what you say above is true, I've traded them for years on a swing basis-unless they trend well, and haven't experienced any major problems, I've read about the problems a lot more then I've seen them. Like I said though, I like to just use them for the leverage and the broad exposure rather then trying to find the right stock in the group, which has it's own problems with specific stock news, earnings, etc. I also like them to get quick exposure to a fast turn in the market. After that, as the industry group starts to trend, I have a better idea of which stocks in the group I may want to replace them with, especially in a short situation as being short offers advantages you can't get being long, even in an inverse ETF.
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