Keeping it Simple

Discussion in 'Trading' started by rs7, Aug 13, 2002.

  1. egildone


    Here is a post from another topic by inandlong showing a simple method that seems to work on ES and NQ eminis intraday and short term swing trades and also long term. It looks like it works well on stocks as is evident in the stocks that inandlong gives as examples in his post.

    Here is the post:

    Well okay sunnyskies... even though I haven't an idea about your specifics for a system that works, here is a concept that works. How you manage the trade is up to you, although I have "specifics" that I have developed.

    And of course it is simple. But first, some basic philosophy of my trading. Sigh! I want to ride the wave of money flowing into a stock. I don't need to be first in line. I don't want to trade counter-trend. I want to trade using a signal that the masses use so when I am getting in, they are getting in too, in the same direction. And I want my entry point to be objective so I know I'm right or wrong. Got it?

    Now here it is 'skies - two lines.... a line chart of the stock, and a 40 day simple moving average. I like the daily chart. The long buck is made catching the big trend and adding to a winning position.

    The method: The first day that the stock crosses the 40 sma and closes across the 40 sma, I get in at the close of the day or the open the next day. Example: ABC crosses the 40 sma and closes above it, I'm in long... or inandlong. Same goes for the short side. As examples of stocks that I traded using this simple method, which can be verified in the chat room, I give you GM and EXPE. Plot a daily chart and overlay a 40 day simple moving average. How's that look? Pretty sweet huh?

    #31     Aug 14, 2002
  2. i l@@k forward to actually learning something from you this time. please don't disappoint me.

    ps will you ever bring back your "superego" persona?

    #32     Aug 14, 2002
  3. rs7


    Well well well.....dreams do come true. Fasterpussycat is actually here. And so far hasn't slammed me. I must be doing something right. But it is early yet:(

    Anyway Faster, welcome to the fray. And sadly, as I am sure you well know, SuperEgo was not me. However, I will admit to using another alias lately. Can you figure out which one it is?

    Your Pal and Buddy,
    #33     Aug 14, 2002
  4. Sharp


    LOL:D :D :D

    This is funny. Could Rs7 have been superego???
    #34     Aug 14, 2002


    I thought Mazda made a Rs7 model. I figured that is where you came up with your screen name.
    #35     Aug 14, 2002
  6. rs7


    ON With the show!!!

    I like this quote a lot. It really says a lot about my personal style as well as the guy's who originally wrote it. We both believe in the "trend". And it is absolutely my belief that you do not have to be the first in. As a matter of fact, it makes no sense to be a trendsetter. This is a big factor in my playing the heavy volume stocks as well as the aforementioned reasons. I don't want to be noticed. I don't want to move the market. I want to ride the wave as this guy said. Very similar to what I would have said....which would have had the same meaning. The analogy would have different words, but made the exact same point.

    Today was an interesting day. The market made a 300 point up move without a dip. So this worked against me. I waited and waited and missed a huge move. But still I made money. Here is why I still managed to despite the market not doing what I would have expected:

    If at let's say between 2 and 3 o' clock we would have had the 20% dip I would expect, that would have been my entry point. But it did not happen. So I decided at 3 to "ride the wave". Now I fully expected that the moment I got involved, that would signal the beginning of a MAJOR dip. Which would have been fine with me. Because I used no more than 5% of my buying power (actually it was less, but you get the point) anticipating this dip. Well now I am in really small, and the market keeps going. So my mark is good for the amount of shares I have. Now I can justify buying more. Still being very conservative, because I am still expecting a selloff. To get to the end quickly here, I just added to my positions in small increments right up until the close. My mark was good, so I kept the positions overnight. Only in the morning will I know if this was the right move. But with a 1%+ mark on equity, I feel it is a justifiable gamble. And, still I am in very lightly because I just never was comfortable buying at the highs. I will need at least a 1% gap down before I am negative in the am. And maybe I will get lucky. But no matter what, I am still using less than 20% of what I would have it the day set up better for me.

    So that was today. A most unusual day. This was one of those opportunities that passed me by. But overall, I have saved a lot of money waiting for the dips. They happen way more often than a run like we saw today!

    I hope this explanation was simple enough to justify being a part of this thread. It was an event driven explanation. Not a part of my overall top trading plan. But a fallback plan so to speak for just these occasions.

    Questions? criticisms? Ideas? Feedback?

    And OF UTMOST is my new signature courtesy of the Gifted Publias?

    #36     Aug 14, 2002
  7. Today was an absolute blast!

    rs7, I haven't read your whole thread yet, I'll do it after I eat..but it's interesting to hear you say you let today's rally pass you by. I'm not sure what criteria you use for a pullback, cos the way I look it at, there a few good opportunities to get in today. Personally, I base the kind of pull back I'll accept on how "strong" I feel the initial move was. "STRONG" move, I'll settle for small pullback (like today). Then again, I was looking for an afternoon rally today - i'm not big on prediction, just one of those "feelings" kind of things.
    #37     Aug 14, 2002
  8. profitz


    Which stocks did you buy? Did you take any shorts as a hedge?
    #38     Aug 14, 2002
  9. rs7


    Nope, the Mazda was an RX7. And RS7 is just my initials and the month I was born (Yankee doodle dandy).
    #39     Aug 14, 2002
  10. rs7


    Bought banks, brokers and techs. Liked the drugs, buy they seem not to follow through (at least for me). I did not take shorts as a hedge. I know a lot of guys that take overnights go mixed. It seldom if ever works for me. I just go long or short. My hedge is how light or heavy I am. Today I would have been heavier if I had an entry point. I didn't, so I am light.
    #40     Aug 14, 2002