I'll try to get more charts out before the close.
In my view the base that was created "looks" strong, but in such a weak market it's not performing anything like what a base like this 5 months ago would perform like. I can sum up intraday "Flat" price action with one word, "VWAP", and it looks very clear that this is exactly what's going on.
VWAP is an institutional standard by which market makers, specialists and those playing the role in HFT land are graded by, you fill a sell order (or short) at or above VWAP and you did good and get extra business, you don't, that's likely all the business you hget.
Market makers and Specialists are in a unique spot to influence intraday price by working the bid/ask stack as any orders that come in at market and don't have a match, get what the middle men post as their bid/ask and in this way and through small intraday support (or distribution), they can hold prices steady which is why we often see the heaviest intraday 3C action during flat periods that "seem" to be boring.
If you've been here for more than a month than you know I always compare these flat areas of price (like today intraday) to "The kids in the room next door being just a little too quiet, YOU KNOW THEY ARE UP TO SOMETHING!".
I'LL GET SOME CHARTS OUT SHOWING YOU WHAT'S GOING ON, IT LOOKS LIKE SECOND VERSE SAME AS THE FIRST, DISTRIBUTION OF ANY STRENGTH.
This doesn't mean I want to enter any particular trade right now as there's a bunch of mud between intraday "steering" divergences (working the bid/ask and tweaking supply/demand) and larger underlying price action which would surprise you considering how flat the market "seems".
Again, I don't enter trades based on what I think will happen, I don't enter them based on the probabilities, I ENTER THEM BASED ON HIGH PROBABILITY/LOW RISK SET-UPS.
In that sense, patience is probably still the best take for the moment, however I will say there are quite a few signs/signals that this is a market unravelling fast, this is why I refuse to let go of position/core shorts even when I know there's going to be a bounce, I keep my core positions in line with the resolution of highest probabilities and in the end, they'll be fine. Until then, I'd still urge patience and waiting for the right trade set up , the one you can't ignore, not just something to keep you busy or because you are afraid you might miss a move. MISS a MOVE! I guarantee it won't cost you anything other than opportunity. It won't kill you, but getting run over on a trade because of bad timing, even when you were right, is something that take s a lot to recover from.
If you lose 50% on a position, it takes a 100% gain just to get back to break even. PATIENCE.
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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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