Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Recommended Posts

Hey guys,

 

 

I have been interested in trading for a while. Gave it a shot a year and a bit back, but didn't do so well.

 

 

I've since spent the time in between studying technical analysis and the market in general.

 

 

A bit of back-ground- I generally trade in PM stocks as it is an industry I work in, follow, and understand (more than others). With that in mind, there is often a fundamental aspect to my trading which uses fed reports, gold/silver prices, and a number of other global factors that influence market sentiment towards PM. As anyone who has followed, its been a tough year and a bit.

 

I'm still figuring it out, but my strategy has been fairly simple up until now. If there are clear S/R zones, I will trade it as I see it, with careful stops, especially at the resistance support.

 

Beyond that, I've been trying to trade the pull-back in a trend supported by a clear line or channel, using a combination of MACD and force index to determine periods when a stock is over/undersold. Don't want to open a margin account just yet, so all of my plays have been long, anywhere from 2-10 days.

 

I pay attention to a number of factors like moving averages and volume, but more as confirmation. All sounds fairly text-book, and that because it is. Once again, since most of my trading is done within the PM/mining sector, price of gold/silver and other macro incentives cannot be avoided...or so I feel.

 

So..what have I been trading? Well, I have a handful of stocks I like to trade. I can go a week without a position as, with the stocks I trade, I don't always see a opportunity that I like. The stocks I watch are listed below:

 

-SBB.T , Sabina Gold and Silver

-BTO.T , B2Gold

-BSX , Boston Scientific

-CS.T , Capstone Mining

-K.T , Kinross Gold

 

 

Anyone have any suggestions on how I could hone my strategy. Not exact step-by-step info, but some indicators or oscillators that may work well with what I described above. Thanks.

Share this post


Link to post
Share on other sites
Hey guys,

 

 

I have been interested in trading for a while. Gave it a shot a year and a bit back, but didn't do so well.

 

 

I've since spent the time in between studying technical analysis and the market in general.

 

 

A bit of back-ground- I generally trade in PM stocks as it is an industry I work in, follow, and understand (more than others). With that in mind, there is often a fundamental aspect to my trading which uses fed reports, gold/silver prices, and a number of other global factors that influence market sentiment towards PM. As anyone who has followed, its been a tough year and a bit.

 

I'm still figuring it out, but my strategy has been fairly simple up until now. If there are clear S/R zones, I will trade it as I see it, with careful stops, especially at the resistance support.

 

Beyond that, I've been trying to trade the pull-back in a trend supported by a clear line or channel, using a combination of MACD and force index to determine periods when a stock is over/undersold. Don't want to open a margin account just yet, so all of my plays have been long, anywhere from 2-10 days.

 

I pay attention to a number of factors like moving averages and volume, but more as confirmation. All sounds fairly text-book, and that because it is. Once again, since most of my trading is done within the PM/mining sector, price of gold/silver and other macro incentives cannot be avoided...or so I feel.

 

So..what have I been trading? Well, I have a handful of stocks I like to trade. I can go a week without a position as, with the stocks I trade, I don't always see a opportunity that I like. The stocks I watch are listed below:

 

-SBB.T , Sabina Gold and Silver

-BTO.T , B2Gold

-BSX , Boston Scientific

-CS.T , Capstone Mining

-K.T , Kinross Gold

 

 

Anyone have any suggestions on how I could hone my strategy. Not exact step-by-step info, but some indicators or oscillators that may work well with what I described above. Thanks.

 

hi there,

 

I am sure you will get a lot of good advices here.

 

From what you are describing you are a scalper, even if you are trading for 7-10 days. You didn't mention what makes you to close a profitable trade?

 

That should be interesting in order to have the overall picture.

 

TW

Share this post


Link to post
Share on other sites

Thanks for the reply,

 

 

Well, If I'm trading just straight up S/R zones, I'll sell off at the R zone. If I think the attack is going to break the R zone I'll wait for a 3.5% rise in price above the zone to hold the position. If I don't see the confirmation, or I don't feel it is particularly strong, I'll sell off.

 

 

Otherwise, if trying to trade the pull back, as of now, my exit strategies are not that great. I find that the force index and MACD together are quite good at giving reliable over-sold indicators, which I confirm with visual pull-back in the price action. Unfortunately, I haven't had the same success with using it as an exit strategy....which I don't understand why.

 

 

Typically if I'm up by 15% I'll get out. A few times, the momentum seems to be so strong that I'll only sell of half the position, but I'm pretty disciplined when it comes to 15%.

 

 

As far as stops, I've determined that a 4% loss is my current risk tolerance.

 

 

Not sure if that really answers your question or not.

Share this post


Link to post
Share on other sites

Thanks for the response.

 

 

I don't really see the pattern. My last attempt, I was investing long based on fundamentals. In the long term, it isn't to bad, but short term its a crap shoot.

 

My strategy this time around is different.

 

 

I certainly agree with the sentiment of the passage which you quoted. I don't believe in making predictions based on market sentiment. That being said, those into gold know to follow a couple of things as they will be represented in the POG, the HUI, GDX, GLD and any of the majors, from there it is a trickle down effect. I believe that, in these times, you can make the case the TA was "to late". Of course...I'm no expert at all...

 

 

Clearly, bullish behavior is bullish behavior and although we all have different ways of confirming it, its always being taken at face value. In my opinion, the passage is good, but full of a decent amount of rhetoric. I was looking for advice/discussion on quantitative means of analysis. Granted, I'll still save the passage for future reading, when I find myself getting to caught up in things that don't particularly matter.

Share this post


Link to post
Share on other sites

Hi,

 

What you describe sounds promising, and as long as you don't have unrealistic expectations of performance it ought to work well enough.

 

I would caution you not to get bogged down in the use of too many indicators/oscillators (they're mostly overly complex manipulations of price data that tell you nothing and exhibit serious lag).

 

In terms of the more technical, mechanical aspect to your approach, you only need to do two things:

 

  1. Identify the long term trend. A simple moving average is perfectly adequate for this purpose - I have yet to find anything that clearly beats it. What setting for the moving average? I would recommend that you optimise this (it's just one parameter), and then keep on re-optimising with each new potential trading opportunity. You'll usually underperform the historical optimum, but outperform what you would have achieved with no optimisation at all.
     
  2. Identify the pullbacks in the trend. To do this, you just need to compare aspects of prices over the last couple of bars. Something as simple as "three consecutive down closes in an uptrend" can work, but I recommend a 2 period RSI. If you look at the calculation of this (you'll find the formula on Wikipedia), you'll see that rather than being some complicated nonsense, in the 2 period form it becomes a very simple price comparison.

 

 

For each of the above, you could then apply a discretionary overlay based on your knowledge of the industry. You'd simply want a fundamental (or insider!?!?!) answer to each of the following questions:

 

  1. Is the long term trend really valid, or just a price excursion that you can't find any real fundamental justification for?
     
  2. Is the pullback just a brief and minor correction before the long term trend resumes, or is it the result of something much more significant that may begin a major trend change for that particular stock?

 

Hope that helps!

 

BlueHorseshoe

Share this post


Link to post
Share on other sites

Thanks for the reply.

 

 

I've tried to keep my mind focused on the basics of identifying the trend and trading the pull-backs. Admittedly, its easy to get caught up in indicators/oscillators while trying to figure out what works for you.

 

 

My TA education began with multiple readings of Technical Analysis of Stock Trends by Edwards and Magee. Obviously it is an older work, one of the first, and some of the original writings are out-dated for todays traders but it was a good introduction, especially the chapters on Support/Resistance, Market Psychology, and Dow theory.

 

 

The book doesn't cover any of the fancy oscillators/indicators that have been invented since its initial publication, nor does it deal with Candlestick charting. Does anyone have any recommendations in regards to a good follow up to Edwards and Mcgee? Even if just for a better understanding of the historical development of TA.

 

I would also like to hear peoples opinions on how necessary it is to use Candlestick charts. I admit that it is something I have neglected in my readings, and I only know the basics formations. I normally use the standard line graph, but if I'm missing out on something big, please let know.

 

 

Once again, thank you for the replies. I have enjoyed reading them.

Share this post


Link to post
Share on other sites

Hi there,

 

Candlesticks vs bars? Its just personal preference. Forget about the hype of fancy and cool names candlesticks have. I use both bar and candlestick charts and my preference is to use bars when I want structural charts and candles when I want to do bar by bar analysis. Both are showing the same things its just your preference.

 

Magee book is a classic and still a great book today. I'm sure you'll get heaps of book recommendations from others, but a few that I liked were:

- Trade your way to financial freedom by Van Tharp

- Evidence Based Technical Analysis by Dave Aronson

- The Art and Science of Technical Analysis by Adam Grimes

 

With kind regards,

MK

Share this post


Link to post
Share on other sites
Thanks for the reply.

 

I've tried to keep my mind focused on the basics of identifying the trend and trading the pull-backs. Admittedly, its easy to get caught up in indicators/oscillators while trying to figure out what works for you.

 

 

Attached is a screenshot and 10yr equity curve for pullback trading BSX, hopefully to try and inspire you :)

 

Remember, the MA trend filter is near historic optimal (50 periods), so your actual performance would not have been quite this good. On the other hand, this is long only - if you short rallies in downtrends you can probably double your trading opportunities.

 

Kind regards,

 

BlueHorseshoe

5aa71200b80e9_BSXPullbackTrades.thumb.png.78b04c5f76c6597306232b29924b0db9.png

5aa71200bd8a4_BSXEquityCurve.png.4b4e413ca481b59e959c92590757dac7.png

Share this post


Link to post
Share on other sites
Hi,

 

What you describe sounds promising, and as long as you don't have unrealistic expectations of performance it ought to work well enough.

 

I would caution you not to get bogged down in the use of too many indicators/oscillators (they're mostly overly complex manipulations of price data that tell you nothing and exhibit serious lag).

 

In terms of the more technical, mechanical aspect to your approach, you only need to do two things:

 

  1. Identify the long term trend. A simple moving average is perfectly adequate for this purpose - I have yet to find anything that clearly beats it. What setting for the moving average? I would recommend that you optimise this (it's just one parameter), and then keep on re-optimising with each new potential trading opportunity. You'll usually underperform the historical optimum, but outperform what you would have achieved with no optimisation at all.
     
  2. Identify the pullbacks in the trend. To do this, you just need to compare aspects of prices over the last couple of bars. Something as simple as "three consecutive down closes in an uptrend" can work, but I recommend a 2 period RSI. If you look at the calculation of this (you'll find the formula on Wikipedia), you'll see that rather than being some complicated nonsense, in the 2 period form it becomes a very simple price comparison.

 

 

For each of the above, you could then apply a discretionary overlay based on your knowledge of the industry. You'd simply want a fundamental (or insider!?!?!) answer to each of the following questions:

 

  1. Is the long term trend really valid, or just a price excursion that you can't find any real fundamental justification for?
     
  2. Is the pullback just a brief and minor correction before the long term trend resumes, or is it the result of something much more significant that may begin a major trend change for that particular stock?

 

Hope that helps!

 

BlueHorseshoe

 

 

 

Thanks again.

 

The goal I am trying to reach is to make, on average, $50/day.

 

I'll be trying out a similar strategy (on paper for now) using the MACD and RSI instead of the force index to see which one works better for determining entry points.

 

 

I've been reading a lot of threads/articles here and many people talk about not getting bogged down in using indicators/oscillators to much and trying to pay attention to price action. I find price action to be a fairly general term and includes and number of things, most notably the overall trend. I plan on taking this into consideration.

 

 

Lastly, more or less, how many people actually make $50/day trading. Is this considered a difficult goal to achieve or is it something which many users reached fairly quickly?

Share this post


Link to post
Share on other sites

Good response, thanks.

 

 

I think $50 is a good goal to set. As far as under performing, its not so important as I have other means of income and I currently live in Central America where living in fairly inexpensive.

Share this post


Link to post
Share on other sites
Good response, thanks.

 

 

I think $50 is a good goal to set. As far as under performing, its not so important as I have other means of income and I currently live in Central America where living in fairly inexpensive.

where at In CA. I MOVE around quite abit in CA. BELIZE, HONDURAS, GUATEMALA, EL SALVADOR...

Share this post


Link to post
Share on other sites
Good response, thanks.

 

 

I think $50 is a good goal to set. As far as under performing, its not so important as I have other means of income and I currently live in Central America where living in fairly inexpensive.

50 bucks is one point a day in the ES..easily done scalping the ES. just a few minutes each day...but you better learn scalping good first and practice or the ES will easily take your 50 and a few hundred more from you each day.

Share this post


Link to post
Share on other sites
Currently in Nicaragua, although thinking about making a change as I no longer have any business obligations here which require my physical presence.

 

 

Thinking about trying out SA.

sounds interesting. Got any country in mind?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 29th March 2024. GBPUSD Analysis: The Pound Trades Higher But For How Long? The global Stocks Markets are closed due to Easter Friday (Good Friday). The NASDAQ continued to follow the sideways trend while other indices again rose. The SNP500 reaches an all-time high, but the NASDAQ remains under pressure from Tesla, Meta and Apple. The Euro continues to trade lower against all major currencies including the US Dollar, Euro and Japanese Yen. The British Pound is the best performing currency during this morning’s Asian session. However, investors are largely fixing their attention on this afternoon’s Core PCE Price Index. GBPUSD – The Pound Trades Higher but For How Long? The GBPUSD is slightly higher than the day’s open and is primary due to the Pound’s strong performance. At the moment, the British Pound is increasing in value against all major currencies. However, the US Dollar Index is also trading 0.10% higher and for this reason there is a slight conflict here. If investors wish to avoid this conflict, the EURUSD is a better option. This is because, the Euro depreciating against the whole currency market avoiding the “tug-of-war” scenario. The GBPUSD is trading slightly lower than the 2-month’s average price and is trading at 49.10 on the RSI. For this reason, the price of the exchange is at a “neutral” level and is signalling neither a buy nor a sell. The day’s price action and future signals are possibly likely to be triggered by this afternoon’s Core PCE Price Index. Analysts expect the Core PCE Price Index to read 0.3% which is slightly lower than the previous month but will result in the annual figure remaining at 2.85%. The PCE rate is different to the inflation rate and the Fed aims for a rate between 1.5% to 2.00%. Therefore, even if the annual rate remains at 2.85%, as analysts expect, it would be too high for the Fed. If the rate increases, even if only slightly, the US Dollar can again renew bullish momentum and the stock market can come under pressure. This includes the SNP500. Investors are focused on the publication of data on the UK’s gross domestic product (GDP) for the last quarter of 2023: the quarterly figures decreased by 0.3%, and 0.2% over the past 12-months. This confirms the state of a shallow recession and the need for stimulation. The data, combined with a cooling labor market and a steady decline in inflation, increase the likelihood that the Bank of England will soon begin interest rate cuts. In the latest meeting the Bank of England representatives did not see any members vote for a hike. USA500 – The SNP500 Rises to New Highs, But Cannot Hold Onto Gains! The price of the SNP500 rises to an all-time high, before correcting 0.33% and ending the day slightly lower than the open price. Nonetheless, the index performs better than the NASDAQ which came under pressure from Tesla, Meta and Apple which hold a higher weight compared to the SNP500. For the SNP500, these 3 stocks hold a weight of 9.25%, whereas the 3 stocks make up 14.63% of the NASDAQ. The SNP500 is also supported by ExxonMobil’s gains due to higher energy prices. The market will remain closed on Friday due to Easter. However, the market will reopen on Monday for the US and investors can expect high volatility. Investors will also need to take into consideration how the PCE Price Index and the changed value of the US Dollar is likely to affect the stock market next week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • MT4 is good and will be good until their parent company keep updating the software, later mt4 users will have to switch to mt5.
    • $SOUN SoundHound AI stock at 5.91 support area , see https://stockconsultant.com/?SOUN
    • $ELEV Elevation Oncology stock bull flag breakout watch , see https://stockconsultant.com/?ELEV
    • $AVDX AvidXchange stock narrow range breakout watch above 13.32 , see https://stockconsultant.com/?AVDX
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.