long term position trading -primarily etf's-

sowterdad · Nov 8, 2014

As having 'traded' EOD since 1999 as a hobby-
(Hobby definition- something one enjoys although it costs them more than it returns) and a periodic visitor to ET - I have not taken the time to apply myself - and have allowed this trading to simply be a past time- because it does not fit into my limited time frame.
While i have had a trading account since 1999- it has truly struggled since the dot-com bust gave it a whack- A LOT OF MONIES EASILY GAINED- A LOT GAVE BACK.
I think i have a decade or so of intermittent interest and involvement inthe on-again-off again market cycles.

The chart i have is an actual active trade I have a position in- a swing trade that covers weeks-
It is the exception to the rule, but - by taking this trade- I stepped out of my comfort zone- and got rewarded- Can I duplicate this again? This was a trade I felt i could enter as a more speculative entry- smaller position size- turned out to be my largest % gain- although every entry I took in this bull bounce is a winner-

MY Core trading account does not Risk a higher % on leveraged trades- When i do, it is a smaller position size than normal- In the case of CURE- the gains have been substantial % wise in a relatively short period-

jsmacksem · Nov 9, 2014

SD. Amazing that you started your own thread! I'm excited to see where this takes you, and I'm following it.

What's special about Renko? I'm not familiar with that chart analysis.

I wish you continued success in your trades.

-JS

sowterdad · Nov 9, 2014

jsmacksem said:
SD. Amazing that you started your own thread! I'm excited to see where this takes you, and I'm following it.

What's special about Renko? I'm not familiar with that chart analysis.

I wish you continued success in your trades.

-JS

Among the reasons I lhave given as to Why Not a Thread- Lack of Time- Lack of Consistency- Lack of commitment-- I recognize that Time can be allocated & prioritized- consistency only comes with commitment. Why use any number of excuses ........They are-just excuses. Easier to make a comment
on other's than dealing with your own limitations.

Starting this thread is taking 1 very important step to committing to myself- to improve my consistency -
to make better analysis of what type of trades work best for my style of EOD trading-. For a considerable time I've allowed this "trading " account to qualify as 'recreational' - Why not give it the effort to become my part-time "business" ? Why not commit- win or lose-learn to adapt- Step up my game -

RENKO CHARTS-
Not special-No guarantees- not better- but a different way of smoothing (hiding) price action.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:renko

A Renko chart is about blinding one's self to the volatility or potential signals that a PA trader uses in his arsenal- For someone like myself- Not a good PA student- It gives me a perspective on whether the market is trending, in consolidation.
Renko charts are continuous- so what looks like a very obvious entry or exit condition is anything but that on real time charts- Renko charts do not show gaps-
Looking back over longer term trends (Weeks, Months, Years) Renko charts at first appear to be the "way to go" They are price based on the current ATR - of the time frame you are viewing them.
If I trade a strongly trending stock- whose price is $100.00 today and the ATR is $5.00- (5%) -
Each box moves only when the price exceeds the current box- If price does not move-or exceed the current box in either direction by more than a box value- a new box will not form. This perspective can be useful for someone trying to hold on to a longer term swing trade- as minor movements are irrelevant.

One of the downsides of the Renko chart is that it makes things look better or more obvious- One of the issues is that when I look back at the $100. stock today that was $50.00 a year ago-Today's Renko may show me a steady uptrend occurred from 50 to 100- but the ATR value- based on a $100 stock price-
at 5%, as it goes back over time, the current ATR value- becames larger progressively- from 5% ATR @ 100 to a 10% value as it goes back to the lower $50. year earlier price- Perhaps a charting program could actually adjust the Renko look back - Stockcharts is limited- I'm still on video 1 on Ninja-

However- it serves to give a perspective in a current situation- but I also look at the candlesticks-
My end goal is to be able to "sit" on a trade until the trade tells me it has failed- Cure looks like it is ready to fail- but I don't know that- My stop is 1 ATR value below th4e current box- or PSAR
It also aids to understand graphically what is the "Normal" averaged volatility swing over any period.

Other elements of the chart that smooth price action are useful on both Renko and candlesticks-
some moving averages- give perspective as to trend direction or consolidation- 2 moving averages show price momentum as the averages widen or come together-
PSAR -http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators

arabolic_sar
often does a great job in a trending condition -
For me, price below a declining PSAR on a 2 hr chart often keeps me out of what turns out to be a
failure by the bulls-

I will be trying to refine and analyze my present methods- and post that process here-
It helps to have a bull market to think one has a "method"- but can one adapt when the condition changes?
Thanks for the comment- Success to you as well.

sowterdad · Nov 9, 2014

sowterdad said:
Among the reasons I lhave given as to Why Not a Thread- Lack of Time- Lack of Consistency- Lack of commitment-- I recognize that Time can be allocated & prioritized- consistency only comes with commitment. Why use any number of excuses ........They are-just excuses. Easier to make a comment
on other's than dealing with your own limitations.

Starting this thread is taking 1 very important step to committing to myself- to improve my consistency -
to make better analysis of what type of trades work best for my style of EOD trading-. For a considerable time I've allowed this "trading " account to qualify as 'recreational' - Why not give it the effort to become my part-time "business" ? Why not commit- win or lose-learn to adapt- Step up my game -

RENKO CHARTS-
Not special-No guarantees- not better- but a different way of smoothing (hiding) price action.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:renko

A Renko chart is about blinding one's self to the volatility or potential signals that a PA trader uses in his arsenal- For someone like myself- Not a good PA student- It gives me a perspective on whether the market is trending, in consolidation.
Renko charts are continuous- so what looks like a very obvious entry or exit condition is anything but that on real time charts- Renko charts do not show gaps-
Looking back over longer term trends (Weeks, Months, Years) Renko charts at first appear to be the "way to go" They are price based on the current ATR - of the time frame you are viewing them.
If I trade a strongly trending stock- whose price is $100.00 today and the ATR is $5.00- (5%) -
Each box moves only when the price exceeds the current box- If price does not move-or exceed the current box in either direction by more than a box value- a new box will not form. This perspective can be useful for someone trying to hold on to a longer term swing trade- as minor movements are irrelevant.

One of the downsides of the Renko chart is that it makes things look better or more obvious- One of the issues is that when I look back at the $100. stock today that was $50.00 a year ago-Today's Renko may show me a steady uptrend occurred from 50 to 100- but the ATR value- based on a $100 stock price-
at 5%, as it goes back over time, the current ATR value- becames larger progressively- from 5% ATR @ 100 to a 10% value as it goes back to the lower $50. year earlier price- Perhaps a charting program could actually adjust the Renko look back - Stockcharts is limited- I'm still on video 1 on Ninja-

However- it serves to give a perspective in a current situation- but I also look at the candlesticks-
My end goal is to be able to "sit" on a trade until the trade tells me it has failed- Cure looks like it is ready to fail- but I don't know that- My stop is 1 ATR value below th4e current box- or PSAR
It also aids to understand graphically what is the "Normal" averaged volatility swing over any period.

Other elements of the chart that smooth price action are useful on both Renko and candlesticks-
some moving averages- give perspective as to trend direction or consolidation- 2 moving averages show price momentum as the averages widen or come together-
PSAR -http://stockcharts.com/school/doku.php?id=chart_school:technical_indicatorsarabolic_sar
often does a great job in a trending condition -
For me, price below a declining PSAR on a 2 hr chart often keeps me out of what turns out to be a
failure by the bulls-

I will be trying to refine and analyze my present methods- and post that process here-
It helps to have a bull market to think one has a "method"- but can one adapt when the condition changes?
Thanks for the comment- Success to you as well.

sowterdad · Nov 9, 2014

My trading account has generally declined over the years- attrition- while my investing account has done relatively well-in comparisom
My investing account -I meddle with on occaision- and aside from having been too conservative and despite my meddling it has continued to grow steadily-
If I had simply bought SPY with the trading account off it's lows in 2009- I'd have had a nice gain over the past 4 years- Simple in looking back-hindsight is always 20-20 is it not? -This trend cannot continue- Historical run- Fed policy is a disaster.....etc-
Yes, I'd make some good trades on occaision , but then couldn't adapt when the market swung, or traded my bias- Yes indeed- the desire to be right.....and discretion /bias causes us to not be objective- Just human nature -
Even last year -
I took some larger trades based on my negative market BIAS-a couple of leveraged ETF's positions quickly confident that the market would see it my way-and so on .
But The prevailing trend would rule- I ignored the position sizing that had saved me from myself- I've done it wrong- repeatedly. Lack of discipline- impulsive trades
I got FED up with myself- Why not just Buy and Hold?
- I did just that- closed my eyes, and let the dice roll- No stops- Never looked at charts for months- HELD through the August decline because i never saw it- Mid summer - In a separate account, I took 5 equal diverse ETF positions across some different sector exposures- and the Bull market saved my lack of lack of having a plan, having no stops- WTF- one of the positions was down 10% offset by the others-and the account had gained- How can I keep the gains? Not give it all back-I wanted to get a better focus and explore a better strategy- a Friend just loves his dividend investments- OK- I'll try a fund that appears "Safe" - meaning trend is going up- pays dividends- and then stay with the trend - as long as it continues- But can I tactically trade - to my advantage - the swings - DTN is the single position in that account- I got some dividends- exited with profits and reentered after the recent market pullback- bought more for less with the entire position- good strategy-
Going forward, I will be posting my past and present tracking- Nice 4% move from the decline-
Other similar but smaller position is TDIV- in the trading account-
Can I employ a faster time frame chart effectively to swing trade around these and other positions?
Swing trading with stops-reduces Risk- The faster the time frame view makes what is an insignificant move on a higher time frame look much more substantial- How do I put it in perspective?
I Took the Cure trade because I had a prior focus -positions using PJP & PBE- faster chart got me out with gains & good reentry signals- I think the healthcare / biotech will continue to be a leading sector- unless the new administration puts a stop to it- That's a Bias- I'll let the chart tell me-
The downside of jumping in and out of a position is that if it fakes one way, you're out- Wait 3 days to clear- It has jumped out in front and is now higher-
If I'm able to discipline myself and define a method to get in, get out and repeat- and focus on learning just a few positions- - That's the goal , that's the commitment to myself-

sowterdad · Nov 9, 2014

sowterdad said:
My trading account has generally declined over the years- attrition- while my investing account has done relatively well-in comparisom
My investing account -I meddle with on occaision- and aside from having been too conservative and despite my meddling it has continued to grow steadily-
If I had simply bought SPY with the trading account off it's lows in 2009- I'd have had a nice gain over the past 4 years- Simple in looking back-hindsight is always 20-20 is it not? -This trend cannot continue- Historical run- Fed policy is a disaster.....etc-
Yes, I'd make some good trades on occaision , but then couldn't adapt when the market swung, or traded my bias- Yes indeed- the desire to be right.....and discretion /bias causes us to not be objective- Just human nature -
Even last year -
I took some larger trades based on my negative market BIAS-a couple of leveraged ETF's positions quickly confident that the market would see it my way-and so on .
But The prevailing trend would rule- I ignored the position sizing that had saved me from myself- I've done it wrong- repeatedly. Lack of discipline- impulsive trades
I got FED up with myself- Why not just Buy and Hold?
- I did just that- closed my eyes, and let the dice roll- No stops- Never looked at charts for months- HELD through the August decline because i never saw it- Mid summer - In a separate account, I took 5 equal diverse ETF positions across some different sector exposures- and the Bull market saved my lack of lack of having a plan, having no stops- WTF- one of the positions was down 10% offset by the others-and the account had gained- How can I keep the gains? Not give it all back-I wanted to get a better focus and explore a better strategy- a Friend just loves his dividend investments- OK- I'll try a fund that appears "Safe" - meaning trend is going up- pays dividends- and then stay with the trend - as long as it continues- But can I tactically trade - to my advantage - the swings - DTN is the single position in that account- I got some dividends- exited with profits and reentered after the recent market pullback- bought more for less with the entire position- good strategy-
Going forward, I will be posting my past and present tracking- Nice 4% move from the decline-
Other similar but smaller position is TDIV- in the trading account-
Can I employ a faster time frame chart effectively to swing trade around these and other positions?
Swing trading with stops-reduces Risk- The faster the time frame view makes what is an insignificant move on a higher time frame look much more substantial- How do I put it in perspective?
I Took the Cure trade because I had a prior focus -positions using PJP & PBE- faster chart got me out with gains & good reentry signals- I think the healthcare / biotech will continue to be a leading sector- unless the new administration puts a stop to it- That's a Bias- I'll let the chart tell me-
The downside of jumping in and out of a position is that if it fakes one way, you're out- Wait 3 days to clear- It has jumped out in front and is now higher-
If I'm able to discipline myself and define a method to get in, get out and repeat- and focus on learning just a few positions- - That's the goal , that's the commitment to myself-

sowterdad · Nov 9, 2014

What is an entry, what is an exit signal?
An entry is looking at the Weekly & daily to understand trend & position on those higher time frames-
Then I like to drop down to a 2 hr chart and get an idea of what the intraday price actionb looks like-
Since I'm not good at PA - I'll also rely on some EMAs for perspective and PSar.
the 2 hr chart of cure shows how choppy and false signals from psar were in the sideways range-
As price trended down, a 'rule' is to not enter when price is below the declining ema and below the declining psar value- a PA trader would have discerned the bottom early- Still- price moves above the declining ema- and closes above PSAR- The psar value is too wide usually on entry - I look at price for a stop initially.

played around with different psar values- PSAR closes in on price over time- too close sometimes- There was no reason to use psar as long as price did not make a close below the fast ema-
Price rolls over- momentum slows- consolidation- emas sideways- where is support?- nothing close- looks ready to drop lower-allow a small amount of room- compare renko-
will try to post a candlestick chart- computer hanging up-

Turveyd · Nov 9, 2014

I keep looking at PSAR, looks good after the fact but when it switches direction your a lot of pts away from the current PSAR line so need to get a pull back maybe, so no guarantee of a safe entry.

I used to swing stocks about 15years back in a similar manner, made and spent a lot of money till silly SEC rules ruined the game, don't try this on Index's which is what me and JS Trade, haven't got the time or money to get back into stocks again.

sowterdad · Nov 9, 2014

Turveyd said:
I keep looking at PSAR, looks good after the fact but when it switches direction your a lot of pts away from the current PSAR line so need to get a pull back maybe, so no guarantee of a safe entry.

I used to swing stocks about 15years back in a similar manner, made and spent a lot of money till silly SEC rules ruined the game, don't try this on Index's which is what me and JS Trade, haven't got the time or money to get back into stocks again.

LOL! 15 years back I also made what was a lot of money for me-Had visions of quitting the day job! WHEW!
Never saw that train wreck coming!!! Glad I kept the nose to the grindstone with the day job. Never had a clue what I didn't know! Slowly recovering. and learning-
I certainly agree- PSAR- like most indicators- can not serve as a stand alone method-Indicators are generated after price and Lag - For me- I use it more as a caution- and entry qualifier- You initially wonder why it is so wide as price is declining- and more often than not- it closes in after saving several failed bullish fake-out bounces- Bounces i would have jumped in at because of a single bullish candle or two- Bull trap set ups. In this example- PSAR serves to remind the trader that his potential entry may be early- and to adjust accordingly.
. I also don't care for the wide berth PSAR gives initially-for a stop-loss- so if i take a reversal entry- I watch price action more closely than psar-after the entry- I usually will apply a typical stop below the low of the reversal bar - or slightly wider to not get whipsawed- but closely watch how the next EOD bars close-If they appear weak- I'd rather lose a little on the entry- and get ready to take another reentry
If you notice in the prior chart- PSAR kept one out of any long entries during the major downtrend-turn- and generated an excellent buy signal- A V recovery is not the norm - and usually the first psar signal to buy would often see a pullback- Had I been focused on Cure earlier- I likely would have been whipsawed on the October retracement lower and then the move higher. The PSAR stop there would have been a loser- but the price weakness would have been enough to tighten the stop for a smaller loss than psar suggested.
I very much agree that indicators cannot be what one becomes reliant upon- They lag-
i think I improve on that - when I step down to a faster chart- and assess it there- 2 hr- then view both PA and how it relates- typically to the ema #1- and are the ema's getting wider or narrower.

In the final summary- reviewing PA- I would likely have raised a stop to the Friday low - since this trade has some profits- I choose the wider stop Renko suggests- Just the Optimist in me.
Thanks for posting- SD

sowterdad · Nov 9, 2014

sowterdad said:
LOL! 15 years back I also made what was a lot of money for me-Had visions of quitting the day job! WHEW!
Never saw that train wreck coming!!! Glad I kept the nose to the grindstone with the day job. Never had a clue what I didn't know! Slowly recovering. and learning-
I certainly agree- PSAR- like most indicators- can not serve as a stand alone method-Indicators are generated after price and Lag - For me- I use it more as a caution- and entry qualifier- You initially wonder why it is so wide as price is declining- and more often than not- it closes in after saving several failed bullish fake-out bounces- Bounces i would have jumped in at because of a single bullish candle or two- Bull trap set ups. In this example- PSAR serves to remind the trader that his potential entry may be early- and to adjust accordingly.
. I also don't care for the wide berth PSAR gives initially-for a stop-loss- so if i take a reversal entry- I watch price action more closely than psar-after the entry- I usually will apply a typical stop below the low of the reversal bar - or slightly wider to not get whipsawed- but closely watch how the next EOD bars close-If they appear weak- I'd rather lose a little on the entry- and get ready to take another reentry
If you notice in the prior chart- PSAR kept one out of any long entries during the major downtrend-turn- and generated an excellent buy signal- A V recovery is not the norm - and usually the first psar signal to buy would often see a pullback- Had I been focused on Cure earlier- I likely would have been whipsawed on the October retracement lower and then the move higher. The PSAR stop there would have been a loser- but the price weakness would have been enough to tighten the stop for a smaller loss than psar suggested.
I very much agree that indicators cannot be what one becomes reliant upon- They lag-
i think I improve on that - when I step down to a faster chart- and assess it there- 2 hr- then view both PA and how it relates- typically to the ema #1- and are the ema's getting wider or narrower.

In the final summary- reviewing PA- I would likely have raised a stop to the Friday low - since this trade has some profits- I choose the wider stop Renko suggests- Just the Optimist in me.
Thanks for posting- SD