Lesson learned quickly - 11.16.15 UVXY sold 25 shares right at the open $37.25 as I was on line at the open- I watched as prices declined further and chose to raise my stop-loss- which immediately got filled much lower than I expected as price was dropping quickly. $34.70 for a net loss of $-74 on the trade. I see as I'm writing this entry,10:00 am; UVXY is moving up from where i sold- but no time for seller's remorse- I was content to have reduced my exposure from the wider stop-loss I would have initially set, seeing my expectations for where the trade would go were moving against me.
11.16.15 EOD tHE FINAL CHART OF THE DAY TELLS THE STORY. Also -stopped out as i raised the stop on SDS. It turns out that I was correct to raise the stops and to reduce the potential loss. I typically would not have real time access - and would have had to allow an EOD trade decision made pre market open to work it's course. The opportunity to adjust the trade as it developed against my position in real time was a positive for the net results-yielding lesser losses. I also raised the stop on the SDS position in real time and was taken out for a lesser loss on the trade. The question as to WHY I would select to enter these trades is one for debate- after the fact-and in Hind sight- Managing and adapting the trade in real time was a different experience- I'm glad i made the choices I did.
Still holding UUP - moved higher- Posting a weekly chart with Volume . I confess i find it difficult to categorize Volume as a telling component of when a trade will become an extended winner- and a qualifier as a necessary ingredient for a substantial up move- notice in UUP -Weekly- there was a quiet time prior to the move (breakout) higher- which occurs on low volume -gradually increasing over the following weeks. I think the tell is in the quiet period leading up to the breakout- the tighter compression of the price exchange between buyers and sellers. It is difficult to asses in hindsight from a single chart what the environment in the markets was during this period- Trading normally slows going into the summer months. Looking at the most recent few weeks, There was a potential breakout of the prior range, some minor selling over a week on High volume- but little price decline - and this week's move higher- If i look at volume - I must look at how the price reacted to that volume- and in this recent example, Large sell volume did not yield to further selling- nor did it move price to a large extent- I would say this favors UUP going higher - and a $25.50 stop plenty generous for a long position. Large Volume on a single day - or a single week- do not always telegraph what will be the future outcome for days or weeks later- but in this chart - a high sell volume was typically followed by a lower week following- but did not always confirm a major decline- I will continue to include Volume as a component of the chart- but it is clearly not a guarantee of foretelling -or guaranteeing the probability of a trend working or failing is my assumption- The substantial upmove on UUP occurs on small volume gradually increasing as more buyers jumped onto the trend- The HERD climbing on board as the train was leaving the station., I think if one wants to include an indicator -or oscillator as a component necessary to make a trading decision to enter or to wait on a trade- that would require a lot of objective study to ensure one does not simply see what one hopes to find- ending up giving that indicator more substance and probability than is actually deserved. That is not to discount that indicators -as such- cannot give a smoothed evaluation of what is occurring in the exchange of price bars- i.e. divergences in the indicator and the price action may be appearing to say one thing- while the indicator- is registering something different alltogether- from what price appears to be doing- At this point- I think Volume is worth including because of what price does in relation to that volume-Worth considering further Consider it this way- A big volume move but small price move may be a tell that the move in that direction is about to reverse. A big volume move on a failed move higher- shooting star- top has formed- Well worth noting. It is not just volume- but the price movement along with volume that needs the combined anal;ysis-interpretation- and what the following bars 'confirm' And then you find that you are becoming a Price Action Trader- Congratulations- Should probably start there to begin with, and save a lot of time spent on trying to discover second tier confirming indicators while ignoring the 1st indicator as the primary one. I believe Price needs to be taken in context of the larger picture- Trend and the relationship to the moving averages are a simplistic way to get a graphic view. I like the UUP trade- as it has recently moved above recent resistance- This provides a 'support' level to exit on a penetration into-
Just a quick comment- Since Monday -virtually all is in rally mode- and i have not had time for a market focus- so a missed opportunity- i don't think I'd trust the financials in this rally-(XLF) = as the prior up move quickly weakened on 11-6. I heard one commentator point out that the XLF also has a lot of Reit exposure- sensitive to higher rates- Go figure- choose your poison.... Pharma is up -and biotech trying to gain some ground. XLU is coming off a hard slam bottom- while xli is climbing- AAPL- Quite the decline and now a recovery..... a 10% decline & recovery 123-111.0-- Flip back and forth between SPY and AAPL- Hand in hand Highs- Nov 4- Lows nov 16- Wish I had more time to learn this stock market stuff....
11.19.15 UUP pulled back and stopped out today-$25.75 On the flip side TLT gapped higher after recently making a dbl bottom going back to September. i'll look to get long if price moves higher tomorrow with a buy-stop entry-$121.20 I did a chart- but will increase my limit a bit wider to 121.50- 20 share position size- Stop-loss is at $120.00- So I'm depending on the price moving higher to get filled initially.The 120 stop would require price to retest the gap. Potential trade Risk is 20 x $1.50 =$30.00 I'm looking at an initial target for upper resistance at the 124 level- so I have a sell order 123.80 which I intend to be for 1/2 the position-ideally allowing the remaining 1/2 to make a larger gain- but with a higher stop trailing. In a prior post, I was correct in finding the XLF not reacting well- to the bullish reports- but after it declined for a week +, it has since rallied back -testing the recent high- It's almost like the market is telling the FED to go ahead and actually confirm the rate hike in December- We are ready and can take it!. I think the XLF looks well suited to test a move higher- so a Buy-stop entry $24.70 -limit $24.75 with $24.40 as a stop-loss will be my trade-Risk is $.35 I will confess i don't really understand WHY this sold off- but here we are- back at the precipice again. A note on taking on too much Risk- Short sellers getting blown out on a $2 Biotech- Read the news on IB and a thread here on ET- How can you actually end up owing the brokerage monies once your account value is wiped out? this is similar to being caught in a flash crash- One never expects the asteroid to really strike home- Earth- But it happens........ The ET thread : http://www.elitetrader.com/et/index.php?threads/one-for-the-ages-i-owe-etrade-106k-ouch.296031/ HMMM, Charts suggest that the market is not Afraid to test going higher-All turned higher on the 16 th- Tidal change in major indexes started higher that date. When All the major indexes are in accord- it usually bodes well. Worth watching. Tomorrow is Friday and i hope to get some screen time mid afternoon- perhaps make another trade or two-
TLT failed to move higher on Friday- had a small pullback and my buy-stop was not filled- Market continues to move higher- XLF trade did fill. This is in spite of- or because of- the expected rate Hike in December- With all of the indexes rising from recent declines- and in direct rebuff to the terrorists attempt to throw France and the world into withdrawal- and fear- The markets appear to be finding strength- trying to end the year with a gain? That may be optimistic and premature- but I'll go with the flow- but I'm not allowing a lot of leeway of trades that go against the entry . qqq, Hack, ITA, pjp, xlf added positions.
11.23.15 markets flat- Minor moves-mostly lower.stops in place- Short week due to the Holiday- Terrorism search is still on top of the news- Taking a wait and see approach.
Apparently the market was lower today in the AM and managed a recovery of sorts. Terrorism still a focus- Russians lost a plane over Turkey- Oil gained. French and US agreeing to fight ISIS- Saw a slight gain in PJP- & defense ITA- almost 1% in Hack but decline in XLF, and q's flat. Did not make any changes in stops- Vxx trending lower-One trading day left-
Market stayed relatively flat again today- pre Thanksgiving Wednesday. Probably also a light volume week overall. A number of things could have shook the markets this week, but did not - Turkey shot down a Russian Jet and that continues to be a focus of concerns- possibly will increase tensions in the area. and is OIL a big concern from Turkey? Putin didn't level Turkey-yet. I was pleased to hear that a large number of ISIS troops laid down their weapons when Obama announced the agreement with France to combat global warming together. Heard that this am on the ride in - GlobaL Warming -international accord- go figure. I would certainly hope that this President came up with something more substantial than what the radio host I was listening to presented. End of the political commentary- On a more realistic note-Pharma had some upside gains (PJP position) and I saw the momentum up move in AGN today Nice breakout higher above the recent consolidation- The "news" about this possible merger came out days earlier- - Today's price action is a positive, and the lower channel gives a well defined support So, I decided to take a small stock position- Haven't considered an individual stock position in quite some time- $320.04 entry on AGN ; Added 40 HACK ($27.14) to the existing position, 40 uup $27.97 as the dollar increases. This leaves me ALL-in Long . Why take a position in a single stock? A single stock carries an inordinate amount of Risk compared to the multiple positions held in an ETF. Potentially, it also brings an inordinate amount of gain. I don't know that AGN will be a position that outperforms the index. The decision to add an individual stock that had potentially momentum news gives a larger exposure to potential gain and loss. I chose to take a position here- because it was chart appropriate in an index that is showing strength. It will be interesting to see if this breakout move outperforms the index.
I had some time to view AGN on different charts today- I have been including volume as a chart component - and I am not a fan of volume-in terms of making a trade decision- I am still inclined to believe that the concept of waiting to enter a trade only once it has been confirmed by large volume is coming late to the party. Everybody else is already there- and are already celebrating when you decide to step through the door with your belated position.-waiting to see that confirming large volume. I think the essence of building Volume as an asset in one's trading occurs only by viewing the potential signals of positive volume when it is ahead of a move- I think a good study of volume is indicated by using faster time frame charts- Because the essence of the charts- across all time frames- needs to hold 'true' (But does it? - another question for another day) As a proponent of TA, I believe charts and the information of the past can be useful in suggesting an approach to the future price action. Essentially- a trend in effect is still likey to continue- Until the time it is violated- Lower high, lower low- break of support etc. interpreting indicators is more subjective- but worthy of additional study- only if it improves one's results- Since indicators interpret a lagging price action- They are not predictive. In the couple of charts i am posting of AGN- One a candlestick, one a Renko- I have included Volume - Volume needs to be viewed in context with Price action- I read on another post Volume Price Analysis - by Anna Coulley (?) and i intend to get the kindle version to read- I hate to complicate a simple trading approach with unnecessary indicators- The more complications that are added- the more removed one becomes from what is the real story- Where price has been and where it is headed. Candlesticks and moving averages are a good starting point- IMO. Since i am an EOD trader- I could look only to the daily chart but prefer to look deeper inside to see some of the interaction that occurs on a faster time frame- In the charts i am posting- a candlestick- and a renko- both of these still support to have taken the entry i chose. Note the volume sequence that occurs preceding the day of the actual gap higher- This becomes more obvious as one employs a faster chart broken into smaller intervals of time. This initial review of the chart shows a price pullback, tighter consolidation, and then a higher volume move up, then a pullback, followed by a higher volume move higher- pullback- I think that those that seek confirmation employing Volume- need to explore this chart dynamic further- I - even as a skeptic- 'think' I see the somewhat subtle higher volume buy side vs the sell side preceding the breakout. I'm not becoming a volume advocate- but i am willing to include it as an object of study-in a chart- Ahead of a move. This 1st chart illustrates AGN with a Renko Close chart- meaning it disregards price projections that do not exceed the price bar ATR vaLUE. sIMPLY LOOK AT THE CHART - Renko is devious in that it fills gap spaces of price with bars. Renko "close' settings disregards higher or lower price penetrations unless an entir Renko value is exceeded. If you can sit back and look at this price chart- Notice from the large gap higher move- All of the volumes decline over a period of days- until a swing low is reacted to with a higher move- followed by a higher sell volume but price manages to not go as low- and makes a higher low- small rally higher- pullback with a peak sell volume- followed by a move higher- and a pullback on even higher sell volume- that fades into a strong buy move higher- I think this fast chart demonstrates a series of higher lows, an attempt at a high volume sell-off that fails to gain traction- that leads into a strong move higher and breakout of the the prior range. This supports my rationale to take a long position on the breakout move.