long term position trading -primarily etf's-
- Thread starter sowterdad
- Start date
Ok! , Thanks Both Xandman and Swift for your honest inputs- and feedback.
My wife says the same thing about me BTW-LOL!
Understand that as I now record highlights of my present approach-trades-, but also actively explore different method(s) , and some of the backtesting 'stuff' - It's my way of processing the information- for myself mostly- in ways i have not bothered to learn to apply or do in the past-(laziness-lack of technology skills).Lots of excuses....There is a larger goal -for me- in mind.....And ultimately the reason I am posting on ET and trying to hold myself to a higher standard than I have in the past.....
I intend to take more active control of some substantially larger assets this year- by transferring my IRA accounts for myself and my wife out of the presently held account that is held within the company broker sponsored account with fees for mutual funds-
My initial research simply proves what i expected- I could invest these monies in a low cost ETF through a discount broker- and ultimately gain more return in my account - for me and my family- The task is somewhat daunting- because the responsibility shift is onto my shoulders directly- but i realize i have been paying a commission/expense- for no added benefit.
That's the bigger picture- not in focus yet, but will occur. Ready or Not to step up....
That's part of the reason for the "WHY" I Nuke the subject matter at hand.
I want to 'succeed' in not only protecting what has been worked for- for years- I want to see that it prospers- if possible. Lot's at stake there on a personal level- and not a lot of recovery time if i make too large wrong choices- So much for my psychology; .factors influencing.......
Young traders have time to recover- Us "older Farts" better nail it the first time!
Talk about pressure!!!! LOL!
Perhaps this explains the rationale of the "WHY" do I perhaps go to this extent?
Getting past all of that-
I would like to contribute- to the process - of successful trend trading.
MY DUG position turned lower, while the PJP, HACK, XBI made gains.
These were trades made prior to today's larger moves-
The goal here is not to get a 3% trade profit-
I don't care about a 3% gain- or loss on a trade.
What i hope to find is a 30% gain- just hasn't happened this past 3 months.,....
Let's have a discussion from the readers as to what they are interested in-
I will contribute as time allows me to.
Open forum guys/gals- No reason Not to step up and open a subject you -might be interested in- Swift stepped up and wanted to review Volume-
I did not view volume as he does- but he viewed it in greater depth- in a larger format.
To any readers that may follow this thread, Get involved- Post your questions- or criticisms- Even if you are just passing by ........
Guys- It's about sharing different ideas for the benefit of all- It's not about being right or wrong-
Thanks xandman, Swift-
Correction -
I agreed with Xandman that you are a nice guy willing to share information and insight with us.
Today I missed your detailed monologue very much! ;-)
Questions -
1. Suppose you move your entire retirement fund from your current program and handle it yourself, are you sure you would not fall into some kind of scam when you deal with the third party? You probably won't but your reader might. Going with your company program more or less you have your company and your coworkers as your backup. Is that right?
2. When you handle your retirement fund, are you sure you could be passive and refrain from trading? Is it true that the more you trade the more you put your retirement fund at risk in general? We certainly want to be conservative with our retirement fund, aren't we?
I agreed with Xandman that you are a nice guy willing to share information and insight with us.
Today I missed your detailed monologue very much! ;-)
Questions -
1. Suppose you move your entire retirement fund from your current program and handle it yourself, are you sure you would not fall into some kind of scam when you deal with the third party? You probably won't but your reader might. Going with your company program more or less you have your company and your coworkers as your backup. Is that right?
2. When you handle your retirement fund, are you sure you could be passive and refrain from trading? Is it true that the more you trade the more you put your retirement fund at risk in general? We certainly want to be conservative with our retirement fund, aren't we?
e today- waiting on the Fed tomorrow-
My reply tonight- and monologue- exceeded the 10000 allotment- and it is simply too late to regroup. thanks for your post- i'll respond tomorrow
My reply tonight- and monologue- exceeded the 10000 allotment- and it is simply too late to regroup. thanks for your post- i'll respond tomorrow
Moving assets out of the present company sponsored broker (Edward Jones) - there are a number of low discount brokers that are well established, that are not 'scams'- Vanguard Funds- TDAmeritrade, Scottrade, Schwab- all offer low cost solutions for the self-directed Investor-
What is compelling about Vanguard- They offer a large spectrum of investment options- including low cost managed funds if one wants to as well as low cost ETF's- Target Funds etc.
If you get reports electronically- they dont charge the $20.00 fee for paper reports mailed.
You can open a brokerage account for as little as $3,000.00 with them. If you decide to purchase an ETF they brought to market- there is NO commission charge for the transaction.
I think you're allowed 12 trades within a year in and out of the same ETF- and then they would charge for the additional trading-
TDAmeritrade also offers over a hundred no commission etf's - there is a certain holding period between sales- or a commission charge is applied-
Both of these firms are very IRA-Roth- retirement focused friendly.
I cannot speak about Schwab- -I've seen some TV Ads- I think they will offer some limited trading 'advice'- I don't know anything about their fee structure-
Scottrade- $7 - I find their order screen limited- and - as far as i can tell- your order has to be filled before you can attach a stop-loss - or limit sell- I may have that wrong- and called their support once-regarding this lack .
IB-
IB charges a quarterly fee for IRA, a fee for not making enough active trades- but is ideal for an active trader with commissions $1 /100 shares- higher for some leveraged ETF's- $2
I can use the TWS platform- and see what my positions are , and make new orders on the same page- They offer more complex order choices- I favor- when I place a Buy order-
At the same time I can "Attach" a bracket order- which gives me the opportunity to put in a limit sell at any price i select- and also a stop-loss at any price- or trailing stop if i choose.
I'm not sure what the minimum number of trades are- a month- to eliminate the monthly inactivity fee. But 3-4 trades a month with a broker that charges you $7-9 for each order- it quickly becomes a wash-
Mutual funds do not trade like stocks- They only transact an order at the closing price each day- I cannot put in a stop-loss- or a limit sell order- If i move $5,000.00 out of one fund in a single day, I am locked out of making further trransactions in that fund for 30 days.
"Going with your company program more or less you have your company and your coworkers as your backup. Is that right?"
NO, that is not correct.
Each employee has their own individual account - invested in whatever funds they may choose. There is no back-up per se- The company does match contributions up to a certain % I contribute- and since that is a Free immediate return on each paycheck's investment- I will continue to leave the account open but with a smaller amount & for new contributions- as well . I think the employer contribution is $.50 for each $1.00 I put in- so that's an initial 50% immediate return-
Everyone that has an employer match should take full advantage of investing everything they can up to the point they get the full advantage of what the employer will match. Very shortsighted to not get the full benefit the employer offers- Once that account is opened, It belongs solely to the individual- The employer can contribute- but they have no control over what the individual invests in - and can never take back any of their contributions- If you leave the employer- it is your account-and your's alone.
2. When you handle your retirement fund, are you sure you could be passive and refrain from trading? Is it true that the more you trade the more you put your retirement fund at risk in general? We certainly want to be conservative with our retirement fund, aren't we?
Good questions. Leads into some longer complex answers later on.....
In handling those retirement assets- you have to decide what investments you might select- So - you make a choice- and make some investments- In terms of being 'passive'-
instead of adopting a Buy once and Hold and Hope it does well- Refrain from trading?
No- but perhaps take a different longer view approach- Which- instead of looking at a daily chart and reacting- you would look at the account 1 time a week- Weekly chart perhaps- and have a different mindset. Difficult to separate the trader from the Investor- but necessary IMO.
The average American investor- with a company sponsored plan- get's quarterly statements perhaps- and if the number for that quarter indicates growth of their assets- they are likely happy- The question most fail to ask- or to look at a chart like traders do-
If they are contributing money into Fund XYZ every month- How much of the gain is from their contribution- and how much is from the fund's performance.
YES- The More we trade, the more we Risk underperforming the market because we zig left when the market zigs right- and we are not ready when the market zigs back left-
This is typical Investor mentality- exit after the pain is obvious- and fail to get back in early.
Conservative? YES- When one is close to retirement- one should reduce the Risky side of the assets- but not totally- One still needs growth. One needs more safety- but also diversification.
Consider what one thinks is conservative- and safe. If one buys 10 stocks of US large cap dividend paying companies and decides 'this is my SAFE retirement plan-' You are at a very large Risk because of your limited exposure to just a narrow market segment.
Buy the index with 1 trade commission- Buy the SPY.
Let's think technology- Buy the q's
Let's think small caps- The Russel.
Let's think International exposure- EEmerging MKTS- EEM
Each of these larger indexes reduces the Risk of trying to pick 1 or 2 outperforming stocks in each of the Indexes.
As we often see in what occurs in our present trades- most stocks largely follow the Index as the direction leader-
If we truly want to be conservative- we reduce individual stock exposures and select index exposure-
Which could lead into the discussion of developing a plan for Portfolio Allocation using wide indexes as a 'conservative' & more stable approach......
Another time for that.
Thanks for Posting- Food for thought-
Wed-
The FED spoke today-Took out the word "Patient" from their statement- the market's rallied- The US dollar declined , The Euro rallied -
I just caught Bits and Pieces after hours- It is so much about the FED policy- Do we ever return to a stock Market- rather than a 'Policy Market?"
SCO sold off big today- DUG stopped out-
PJP made a nice higher move- Hack higher- XBI had been higher prior days but was flat at today's close.
Trading Account is gradually getting close to this year's highs- finally- I hate the "give back"
periods- working to reduce those- I don't think i exceeded -4% on the swings though-
That's not to say it won't happen. TAN- nice Cup formation- It's a play on solar- well defined multi day saucer swing low- Stop would be $42.00. Not my trade in the IB account- No freed cash.
BRKB- Warren's value oriented ETF- Why is it not knocking the cover off the ball today? It looks to be making the higher turn off the base- I guess that is like trying to shift the Titanic It doesn't happen immediately.
GLD popped today as the US Dollar declined- The EURO jumped today-
The Fed watches and noted the impact of the us Dollar -
This really seems to be a see-saw swing time- developing- Nimble traders may benefit- the rest of us should be cautious what is around the bend.
I still believe in XBI & PJP as market candidates to outperform- with lower Risk-
Give them a look.
The FED spoke today-Took out the word "Patient" from their statement- the market's rallied- The US dollar declined , The Euro rallied -
I just caught Bits and Pieces after hours- It is so much about the FED policy- Do we ever return to a stock Market- rather than a 'Policy Market?"
SCO sold off big today- DUG stopped out-
PJP made a nice higher move- Hack higher- XBI had been higher prior days but was flat at today's close.
Trading Account is gradually getting close to this year's highs- finally- I hate the "give back"
periods- working to reduce those- I don't think i exceeded -4% on the swings though-
That's not to say it won't happen. TAN- nice Cup formation- It's a play on solar- well defined multi day saucer swing low- Stop would be $42.00. Not my trade in the IB account- No freed cash.
BRKB- Warren's value oriented ETF- Why is it not knocking the cover off the ball today? It looks to be making the higher turn off the base- I guess that is like trying to shift the Titanic It doesn't happen immediately.
GLD popped today as the US Dollar declined- The EURO jumped today-
The Fed watches and noted the impact of the us Dollar -
This really seems to be a see-saw swing time- developing- Nimble traders may benefit- the rest of us should be cautious what is around the bend.
I still believe in XBI & PJP as market candidates to outperform- with lower Risk-
Give them a look.
You are welcome- I hope some of this discussion would prompt others to also get more informed of what is behind the curtain in their company IRA's.
I swung by our main office this AM and mentioned to the accountant/HR person that I would be moving the majority (but not all) of my funds- and explained some of the rationale. I want to be sure to get the full benefit of whatever my employer is matching- As long as i "Rollover' the assets within 60 day into another suitable IRA account- there are no tax consequences- One thing to be cautious about- There is some proposed - or possibly new regulation that an individual can only 'rollover' a single account in each calendar year. I'm not sure about this being in effect yet- But that should be a possible caution to be looked into before rolling over 2 accounts into a different account within the same calendar year....
I think she was surprised when i mentioned the expense ratio differences. The inability to have a stop-loss- the lockout of the account if I move more than $4,999.00 in a single fund in 1 day- If i moved $5,000 out of a fund, I am locked out of being able to add -or sell for 30 days in that specific fund . I suggested she read John Bogle- or go to You Tube to learn a bit more if she was interested.
So, If the investment advisor shows pretty charts and the gain that exceeded the S&P 500 index, request he actually compare it to SPY. One can also go to Morningstar and see their ratings on any funds- Vanguard to get a comparisom of performance vs a similar Vanguard fund etc....
Next post will get back to present trades-
I swung by our main office this AM and mentioned to the accountant/HR person that I would be moving the majority (but not all) of my funds- and explained some of the rationale. I want to be sure to get the full benefit of whatever my employer is matching- As long as i "Rollover' the assets within 60 day into another suitable IRA account- there are no tax consequences- One thing to be cautious about- There is some proposed - or possibly new regulation that an individual can only 'rollover' a single account in each calendar year. I'm not sure about this being in effect yet- But that should be a possible caution to be looked into before rolling over 2 accounts into a different account within the same calendar year....
I think she was surprised when i mentioned the expense ratio differences. The inability to have a stop-loss- the lockout of the account if I move more than $4,999.00 in a single fund in 1 day- If i moved $5,000 out of a fund, I am locked out of being able to add -or sell for 30 days in that specific fund . I suggested she read John Bogle- or go to You Tube to learn a bit more if she was interested.
So, If the investment advisor shows pretty charts and the gain that exceeded the S&P 500 index, request he actually compare it to SPY. One can also go to Morningstar and see their ratings on any funds- Vanguard to get a comparisom of performance vs a similar Vanguard fund etc....
Next post will get back to present trades-
Biotech moved higher today XBI gained +2.75% That would be a 3.25% difference to the way SPY moved- In 1 day .
PJP gained just 1%
Hack +.14% same as q's.
Spy was down -.46%
Q's consolidated at yesterday's bigger move- up + .15%.
Dow -.65%
IWM- Russel 2000 -small caps - gained + 0.19% When small caps move higher- this is generally a good thing- WHY? When the large caps struggle- but small caps gain- it might mean the market sees the environment is beneficial for small business- Domestic companies- Large Caps may be struggling with the high dollar and international exposure on a currency exchange basis.
EEM had a big pop yesterday, dropped back -1.75% today.
How about Europe? VGK is the Vanguard Passive index ETF tracking major companies.
After a huge EOD move yesterday, it dropped back and consolidated -1.38 but still above the fast ema.
What is the point? The point is that sometimes we can focus so selectively on 1 or similarly correlated positions.
I'm guilty of having a very narrowed focus- So i tend to promote what is working in my small universe-
ETF's offer wide sector index exposure and ALSO very narrowed sector exposure-
Slice it and dice it- The wider the exposure- the less RISK compared to the more narrow smaller sectors- The major indexes also hold better volume and tighter Bid-spreads
Hack- as an example- has a volume today of 352,000. The bid-ask spread may be considerably wider than a fund more actively traded.
The QQQ's have 31 M shares trades, SPY 117 M.
XLU- the Utility sector- it is also considered a 'safe haven' sector- showing a bit of a higher move .
I am negligent in focusing on the various sectors in and out of favor- but i have learned finally to go with the sectors showing strength rather than thinking I'd be a value buyer because something got cheaper.
Utilities are considered Dull and Safe- Correct? Dividend payers and all that stuff-
When we breeak the market down into sector rotation- as the big -smart- money looks to roll out of overvalued sectors, and find 'safer' sectors in times of uncertainty, They might rollout of some of their SPY position, and drill down into the sectors that appear to be performing better. This is also the action of the active fund managers- find something to invest in that will do better than the benchmark SPY.
While the QQQ's have the glitz of being new technology- leading edge- allow me to use this example of the strength of sector rotation that surprised me as well.
Look at a 1 YEAR chart of XLU- IT GAINED 23%., but then declined to 15%
SPY has barely touched a 15 gain over the past year-
There may be a bigger story here as to WHY the Safety trade had a period of such outperformance over the growth trade-
More to the trading aspect- going with the sector in favor may provide better opportunities. Finding those sectors gaining strength makes one's trades more likely successful than sticking with a single broad index that is not moving well.
XLU sold off, and is just now trying to regain some traction-
If we divide the market up among the major sectors- we would likely find some different -non-correlated trends.
PJP gained just 1%
Hack +.14% same as q's.
Spy was down -.46%
Q's consolidated at yesterday's bigger move- up + .15%.
Dow -.65%
IWM- Russel 2000 -small caps - gained + 0.19% When small caps move higher- this is generally a good thing- WHY? When the large caps struggle- but small caps gain- it might mean the market sees the environment is beneficial for small business- Domestic companies- Large Caps may be struggling with the high dollar and international exposure on a currency exchange basis.
EEM had a big pop yesterday, dropped back -1.75% today.
How about Europe? VGK is the Vanguard Passive index ETF tracking major companies.
After a huge EOD move yesterday, it dropped back and consolidated -1.38 but still above the fast ema.
What is the point? The point is that sometimes we can focus so selectively on 1 or similarly correlated positions.
I'm guilty of having a very narrowed focus- So i tend to promote what is working in my small universe-
ETF's offer wide sector index exposure and ALSO very narrowed sector exposure-
Slice it and dice it- The wider the exposure- the less RISK compared to the more narrow smaller sectors- The major indexes also hold better volume and tighter Bid-spreads
Hack- as an example- has a volume today of 352,000. The bid-ask spread may be considerably wider than a fund more actively traded.
The QQQ's have 31 M shares trades, SPY 117 M.
XLU- the Utility sector- it is also considered a 'safe haven' sector- showing a bit of a higher move .
I am negligent in focusing on the various sectors in and out of favor- but i have learned finally to go with the sectors showing strength rather than thinking I'd be a value buyer because something got cheaper.
Utilities are considered Dull and Safe- Correct? Dividend payers and all that stuff-
When we breeak the market down into sector rotation- as the big -smart- money looks to roll out of overvalued sectors, and find 'safer' sectors in times of uncertainty, They might rollout of some of their SPY position, and drill down into the sectors that appear to be performing better. This is also the action of the active fund managers- find something to invest in that will do better than the benchmark SPY.
While the QQQ's have the glitz of being new technology- leading edge- allow me to use this example of the strength of sector rotation that surprised me as well.
Look at a 1 YEAR chart of XLU- IT GAINED 23%., but then declined to 15%
SPY has barely touched a 15 gain over the past year-
There may be a bigger story here as to WHY the Safety trade had a period of such outperformance over the growth trade-
More to the trading aspect- going with the sector in favor may provide better opportunities. Finding those sectors gaining strength makes one's trades more likely successful than sticking with a single broad index that is not moving well.
XLU sold off, and is just now trying to regain some traction-
If we divide the market up among the major sectors- we would likely find some different -non-correlated trends.
As i got home before the market closed this pm- Everything was in rally mode-
It seems that the market has taken the FED speak to mean that rates may not be raised too sign, the dollar has given back & some decline- The market likes this scenario.
Let's touch on sector-and segment rotation-
Both the SPY and IWM (small caps) hit a high early in March.
Both declined hand in hand -4% or so, and then turned to move higher - IWM leading SPY off the bottom turn.
Today, Spy is at the prior March high, while IWM has moved above it's prior March high-by several %- outperforming the SPY- which includes large companies-
Interestingly , Biotech gapped higher at the open, but sold off through out the day, closing lower than yesterday's large move higher.
What was interesting is that all of the market pundits - Fast Money & Cramer- ALL spoke about how far the sector has moved. and perhaps the sector is overheated./overvalued.
When the overall market goes higher, but your group is not the leader- but a losing laggard-
it suggests it's time to tighten the stops if your position is not flowing higher WITH the strong market tide-. Or outperforming and leading the market.....
PJP - was weak- only gained .5% -but I added to the position regardless-
I watched the market for an hour or so- and going into the close- Tech looked strong- didn't give back the entire gap up move- - I elected to go long Tech- but should have waited into
the last 1 minute- as sell programs locked in gains on the higher move and the closing price dropped in the last 5 minutes-
HACK was also weak, declining hard at the close- My raised stop-loss should protect my entry.
I think this is sector rotation- and smart money repositioning .
If the market moves higher next week, TNA may be a good short term play- the leveraged
small cap ETF. but one has to be careful- 3x up is also 3x down- and any Gap is 3x as wide.
Tech sector- Nasdaq- trying to hold those 15 years - get back to old highs -This is a 2nd
push from the earlier high made at the beginning of the Month.
We had a gap higher open back to the recent highs- and price held that gap.
Today's close feels as though the market got a breath of fresh air from the dollar, the FED- and it's sails are filled momentarily-
I think everyone goes home this weekend feeling good and complacent- and the market finds reasons to go higher next week. I actiually put some Investment monies back to work on small cap world growth, I think the dollar decline will give strength there as well.
As for the Tech sector- I bought the TQQQ going into the close- which is the leveraged etf. It's a gamble- It's discretionary.
For next week, I am also going to tighten stops on my positions - I don't care for the weakness in XBI - and PJP didn't lead the Spy, it trailed-
Consumer discretionary is being talked up some on CNBC- and watch how the utilities perform- The transports used to be the go-to indicator of large trends in the markets- Goods being sold and needing to be delivered... Signs of growth when that occurs.
Amazon may derail the transports with their proposed use of Drones?
Next post will be discussing a possible site for asset allocation
It seems that the market has taken the FED speak to mean that rates may not be raised too sign, the dollar has given back & some decline- The market likes this scenario.
Let's touch on sector-and segment rotation-
Both the SPY and IWM (small caps) hit a high early in March.
Both declined hand in hand -4% or so, and then turned to move higher - IWM leading SPY off the bottom turn.
Today, Spy is at the prior March high, while IWM has moved above it's prior March high-by several %- outperforming the SPY- which includes large companies-
Interestingly , Biotech gapped higher at the open, but sold off through out the day, closing lower than yesterday's large move higher.
What was interesting is that all of the market pundits - Fast Money & Cramer- ALL spoke about how far the sector has moved. and perhaps the sector is overheated./overvalued.
When the overall market goes higher, but your group is not the leader- but a losing laggard-
it suggests it's time to tighten the stops if your position is not flowing higher WITH the strong market tide-. Or outperforming and leading the market.....
PJP - was weak- only gained .5% -but I added to the position regardless-
I watched the market for an hour or so- and going into the close- Tech looked strong- didn't give back the entire gap up move- - I elected to go long Tech- but should have waited into
the last 1 minute- as sell programs locked in gains on the higher move and the closing price dropped in the last 5 minutes-
HACK was also weak, declining hard at the close- My raised stop-loss should protect my entry.
I think this is sector rotation- and smart money repositioning .
If the market moves higher next week, TNA may be a good short term play- the leveraged
small cap ETF. but one has to be careful- 3x up is also 3x down- and any Gap is 3x as wide.
Tech sector- Nasdaq- trying to hold those 15 years - get back to old highs -This is a 2nd
push from the earlier high made at the beginning of the Month.
We had a gap higher open back to the recent highs- and price held that gap.
Today's close feels as though the market got a breath of fresh air from the dollar, the FED- and it's sails are filled momentarily-
I think everyone goes home this weekend feeling good and complacent- and the market finds reasons to go higher next week. I actiually put some Investment monies back to work on small cap world growth, I think the dollar decline will give strength there as well.
As for the Tech sector- I bought the TQQQ going into the close- which is the leveraged etf. It's a gamble- It's discretionary.
For next week, I am also going to tighten stops on my positions - I don't care for the weakness in XBI - and PJP didn't lead the Spy, it trailed-
Consumer discretionary is being talked up some on CNBC- and watch how the utilities perform- The transports used to be the go-to indicator of large trends in the markets- Goods being sold and needing to be delivered... Signs of growth when that occurs.
Amazon may derail the transports with their proposed use of Drones?
Next post will be discussing a possible site for asset allocation