Is it the economy or my MA swing strategy?

[dholliday]

Price goes up ..... and price goes down. Go long the former, go short the latter.

Hard to argue with that.

 

[murray t turtle]

So I started live trading at the end of December, which has not exactly gone to plan.

My basic plan has been to buy stocks whose EMA(7) crosses the EMA (20). To ensure the stock is REALLY in a trend I've added the SMA(50) and SMA(200) to charts. The price has to be above both the SMA(50) and SMA(200) and I want their slopes to elevating.

I've been toggling between EMA cross under and a 3xATR(22) chandelier stop as an exit.

Since the New Year I've lost about 8% of my account already. I was so certain that my setup was so selective that I would find winning stocks, albeit scarce. The crossovers I choose seem to U turn pretty quickly.

Is my strategy crap or will this work in a better economy?

%%
MOVING AVERAGES lag+ that one of several reasons i like them, DU2.
SURE its hindsight, but that's helpful.
WITH max hindsight, a dip below50 week moving average = no problem, good uptrend.
OOPS!! What we have now = Since early Jan , SPY benchmark dipped \ stayed below50dma , but bear move. So even a medocre use of ma in this ternd =loss many times.
WELL plenty of times 200dma is a good buy\ not now \maybe in MAR or May. Thats what the market is dong\ OOPS.
AS far as the economy; many auto dealers are making + fortune now + more power to them/but look @ major car co\ stocks=not good .
Some sectors are uptrending /SH,SDS is also. Cut a loss on SPYG, smaller profit in SPXS,SPXU, SH.

 

[DublAK2]

Besides the stacking MA setup (7ema/20ema/50sma/200sma), the other things I scan for are avg. volume >200k and ATR >0.5. I don't include any fundamentals since I'm not trying to buy and hold for long periods.

At this point I do not feel confident enough to attempt shorts even though I understand that's what the current overall market calls for.

 

[DublAK2]

Okay, $FDL bought on 2/1 would be an example. I'm about 1 more day away from the 7ema crossing under the 20ema, selling for a loss

 

[deaddog]

Okay, $FDL bought on 2/1 would be an example. I'm about 1 more day away from the 7ema crossing under the 20ema, selling for a loss

That's how you wrote up the plan. Good trade.
Your strategy requires a trending market. We don't got one right now. Stop trading or scale back in size.

 

[DublAK2]

Thanks for the encouragement. I started this adventure at a terrible time for the market. It is hard to know if I'm to blame or it's the state of the economy. I have no real money experience before the new year.

 

[deaddog]

Thanks for the encouragement. I started this adventure at a terrible time for the market. It is hard to know if I'm to blame or it's the state of the economy. I have no real money experience before the new year.

If you trade your plan with discipline you'll find out if the problem lies with the plan or the trader. Then you can adjust one or the other. Preserve your capital. Size back or sim trade until you figure it out.

 

[smallfil]

Okay, $FDL bought on 2/1 would be an example. I'm about 1 more day away from the 7ema crossing under the 20ema, selling for a loss

You bought after FDL has run up some. Actually, near the top if you were just swing trading. Try to buy on the pullbacks. Your trading results will improve. Do not use moving averages unless, you are trading for the longer term, like trend following. In that case, you can use the 50 sma to determine the trend of the stock.

 

[taowave]

have you read any of Oneil/Minervinis books??

Thanks for the encouragement. I started this adventure at a terrible time for the market. It is hard to know if I'm to blame or it's the state of the economy. I have no real money experience before the new year.

 

[DublAK2]

I've not read them. I've read three books, none of which were those authors, in addition to countless youtube videos. I've only had a crack at this for less than two months so I am not the most well read trader, if I can even call myself that.

So according to my little setup. $CPM on 2/18 looks like something I'd typically grab (especially since I work in the same city as Campbell Soup!). The 7EMA crossed the 20EMA with volume. The only thing that I would normally hesitate about is that the 200SMA is still sloping downward, but it looks like the last two earning reports weren't so bad so I would maybe ignore the 200SMA for that reason.

However I feel like everything I touch turns to crap so I left it alone. No trade.