Elite Trader School

deaddog said:
There you've lost me with semantics again. I don't know what a regime change is. I watch price and when it starts to trend down, I exit the trade.

I have a system. I pick stocks that are rising in price on volume (how is that for filter). My robust risk management is not to hold losers.(I don't see any downside to being in cash)

All the system requires is discipline.

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So you don't have capital constraints or position limits? Are you indexing momentum as a factor?
 
longandshort said:
So you don't have capital constraints or position limits? Are you indexing momentum as a factor?
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Of course I have capital restraints. I'm a retail trader. I'd think I'm fairly well capitalized.

I limit my position size by risking 1% or less on anyone position but I have no limit on the position size as a percentage of the total portfolio. At one time before 2020 one position was over 50% of my portfolio. Rarely hold more than 10 positions. Once a position becomes risk free (stop is above break even) I'll let it run as far as it wants.

I don't know what you mean by indexing momentum.
 
deaddog said:
Of course I have capital restraints. I'm a retail trader. I'd think I'm fairly well capitalized.

I limit my position size by risking 1% or less on anyone position but I have no limit on the position size as a percentage of the total portfolio. At one time before 2020 one position was over 50% of my portfolio. Rarely hold more than 10 positions. Once a position becomes risk free (stop is above break even) I'll let it run as far as it wants.

I don't know what you mean by indexing momentum.
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your stop loss is 1% below your entry? what do you mean by risking 1% or less?

Indexing momentum is pretty much buying (selling) all stocks that are going up (down).
 
longandshort said:
your stop loss is 1% below your entry? what do you mean by risking 1% or less?
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No my risk is the difference between the entry and the stop. If the entry is $10 and the stop is calculated to be 9 then I have a risk of one dollar. If my account size is 100K then 1% risk is 1K. my position size would be 1000 shares.

I'm not indexing momentum as I rarely have more than 10 positions.
 
deaddog said:
No my risk is the difference between the entry and the stop. If the entry is $10 and the stop is calculated to be 9 then I have a risk of one dollar. If my account size is 100K then 1% risk is 1K. my position size would be 1000 shares.

I'm not indexing momentum as I rarely have more than 10 positions.
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So how do you get to those 10 stocks? Just the highest price momentum + volume?
 
longandshort said:
Tom doesn’t really trade.

There may have been a time where DeMark was useful, especially given his more thoughtful approach to technical analysis, but this was before computing became cheap enough where anyone can easily run multi-variate analysis in real-time. Using static models and approaches no longer work because the market is constantly adjusting and incorporating information. Signals decay very quickly and firms like RenTech and other quants (which are the modern-day technical traders) are constantly running new tests to find new signals that decay even faster.
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You keep teaching and I'll keep trading {with Tom DeMark's tools} - deal?

"There may have been a time ..." yes and that time was 9:19 ET this morning right before eMini HOD was in. Stop is one tick above HOD @ 4368.25 (Magenta line) representing 2 times the range of highest bar of the setup added to its high, just in case you were wondering. "Was this close".
eMini.png
 
longandshort said:
So how do you get to those 10 stocks? Just the highest price momentum + volume?
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Mainly I scan for stocks in a price & volume range making new highs. I further refine the search looking for breakouts to new highs on above average volume.

A quick look at the chart will tell me where the price has been in the past and what interest there is now.
 
longandshort said:
Where did you learn this from?
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  • Extremely logical thinking.
  • Thinking out of the box, which means throwing away all existing indicators, retracements, support and resistance, stochastics, RSI, candle sticks, Fibonacci, break outs...
  • Strong analytical skills. Needed to "read" the mathematical models.
  • Above average ability to find (hidden or not hidden) links.
  • Years of studying different approaches and improving the models (without optimization), so that they work in all different markets.
I am happy that I never read anything as that would have polluted my way of thinking. My brain did not have any knowledge except for the knowledge that I found myself by studying and experimenting with data.
 
virtusa said:
  • Extremely logical thinking.
  • Thinking out of the box, which means throwing away all existing indicators, retracements, support and resistance, stochastics, RSI, candle sticks, Fibonacci, break outs...
  • Strong analytical skills. Needed to "read" the mathematical models.
  • Above average ability to find (hidden or not hidden) links.
  • Years of studying different approaches and improving the models (without optimization), so that they work in all different markets.
I am happy that I never read anything as that would have polluted my way of thinking. My brain did not have any knowledge except for the knowledge that I found myself by studying and experimenting with data.
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What mathematical models are you talking about?
 
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