long term position trading -primarily etf's-

[sowterdad]

time enough today to post a chart-
Trend is generally up since January- we had a bit of a market rally , pullback, rally higher- and a recent pullback- close to the recent prior swing low.
The 2 hr chart gives me- EOD -a good view of what occurred- a pause in the pullback near $56- led to a 1st reversal higher attempt-over several days. It seems that a good percentage of these initial attempted up moves fail to hold - but it indicates some demand is stepping in- slowing the momentum of the decline
A second attempt - off a lower price level would seem to be a higher probability trade-particularly if it coincides with a prior level that one could consider as a possible support range. In this example, SKF looked close enough to the P.O.F - that it appeared to be a reasonable DEFINED - Risk - a break of the prior swing low would certainly appear to mean the trade has failed. I set my initial stop just below that- trying to give some room for volatility.
Another aspect of taking the trades towards the short side - despite the recent rally- Oil is still an unknown and affecting the world markets- If Europe is weak, the US is weak, reflected by market action, The financials and small caps seemed logical places to take short trades in.
Rewarded today by seeing the markets gap lower favoring my 2 entries-made yesterday-
Europe was weak overnight & selling off- Oil selling off- and that was reflected in the US open.
Positions had gapped higher by the open -If you weren't in the trade yesterday, you looked at the gap move today and had to make a choice how to position
QID attempted trade- opened up almost 3% above yesterday- I nudged my entry limit a bit higher-$35.52 - price went over $36 -but may pullback some later . (Qid filled 11:45)
SKF moved up +3% and TWM 2%.

Ideally, I would like to see these positions sustain a multi-day move higher- but the market may find reasons overnight to see a glimmer of optimism- such as the Cnbc news report a few minutes ago that Oil reserves are not as high as initially reported-Bizarre that
Higher oil prices would make the markets rally-
To balance the desire for retaining some profits, yet allow trades room to run is indeed a balancing act- Adapting a trading approach to suit changing market conditions /volatility seems to support acting more on shorter term holding periods.
I'll likely look to take some partial profits, perhaps today- and ensure stops are raised on remaining positions.View attachment 162276

I hadn't had a chance to catch up fully on the lesson i was served by the market this week-
A little bit of hubris deserves a smack down -
Too late for any charts- and today was flat out busy- and no time for reflection earlier.
Summing up the 3 trades i made this week-
I took an early entry near :support" on TWM, SKF- good entry and next day gap higher move on 2 positions-and felt that the move was going to continue across most sectors- I also decided the tech sector looked like it was going to sell-off as well- but it gapped higher than the buy-stop limit- While i had some time that morning- i felt reasonably confident these would develop into multi-day moves- Later am- some oil related news that inventories were not as strong as initially reported caused a market reversal-
Fortunately, I was able to access the trades some intraday and elected to modify the trades with raised split stops- Normally, my daytime schedule doesn't allow that much freedom-
Had i been able to watch further intraday, perhaps i would have micro managed all 3 trades better- As it ended, My raised stops locked in some reduced profits in SKF & TWM- but these were largely offset by the fill on my buy-stop limit on Qid, which then declined and took out my initial attached order stop-loss-
i think the lesson i can come away with - is that with this kind of quick market volatility reversing direction- One has to be prepared to target smaller duration moves, tighten stops- and not expect the expected to occur. Just as one thinks this is the way to adapt one's trading, we will get a week long rally.
There's very little one can do about a surprise news announcement moving the markets-
Other than to try to find a balance in staying with a trade for more than a few hours-
Wider volatility swings make holding a position for a longer period of days-weeks -a real challenge to one's Risk parameters- because- as they say- the market can remain irrational longer than a trader can remain solvent-and perhaps for myself - the best defense is to sit on the sidelines- try to identify an early swing - and just try for bunts and not triples.'
More tactical trading requires more intraday market access- Not likely I will find that available any time soon .
i did get the last 7 or so pieces of ceramic tile cut and laid tonight-
Almost forgot-got to test out the tornado shelter last night as severe weather came across NC- 4 killed in VA. The storm shelter is analogous to a stop-loss-
Better to have one ready and not need it- Than on the rare occasion one needed it but it was not in place.

 

[sowterdad]

time enough today to post a chart-
Trend is generally up since January- we had a bit of a market rally , pullback, rally higher- and a recent pullback- close to the recent prior swing low.
The 2 hr chart gives me- EOD -a good view of what occurred- a pause in the pullback near $56- led to a 1st reversal higher attempt-over several days. It seems that a good percentage of these initial attempted up moves fail to hold - but it indicates some demand is stepping in- slowing the momentum of the decline
A second attempt - off a lower price level would seem to be a higher probability trade-particularly if it coincides with a prior level that one could consider as a possible support range. In this example, SKF looked close enough to the P.O.F - that it appeared to be a reasonable DEFINED - Risk - a break of the prior swing low would certainly appear to mean the trade has failed. I set my initial stop just below that- trying to give some room for volatility.
Another aspect of taking the trades towards the short side - despite the recent rally- Oil is still an unknown and affecting the world markets- If Europe is weak, the US is weak, reflected by market action, The financials and small caps seemed logical places to take short trades in.
Rewarded today by seeing the markets gap lower favoring my 2 entries-made yesterday-
Europe was weak overnight & selling off- Oil selling off- and that was reflected in the US open.
Positions had gapped higher by the open -If you weren't in the trade yesterday, you looked at the gap move today and had to make a choice how to position
QID attempted trade- opened up almost 3% above yesterday- I nudged my entry limit a bit higher-$35.52 - price went over $36 -but may pullback some later . (Qid filled 11:45)
SKF moved up +3% and TWM 2%.

Ideally, I would like to see these positions sustain a multi-day move higher- but the market may find reasons overnight to see a glimmer of optimism- such as the Cnbc news report a few minutes ago that Oil reserves are not as high as initially reported-Bizarre that
Higher oil prices would make the markets rally-
To balance the desire for retaining some profits, yet allow trades room to run is indeed a balancing act- Adapting a trading approach to suit changing market conditions /volatility seems to support acting more on shorter term holding periods.
I'll likely look to take some partial profits, perhaps today- and ensure stops are raised on remaining positions.View attachment 162276

Doing a post-mortem of the TWM & SKF trades-
Entry was good- reason for the entry was valid- and close to support- allowing a defined Point of Failure. Started off nicely with a gap move higher on the following open- which i had the unusual opportunity to view in real time - i had a lot of confidence (Hubris) in my timely earlier entry - some oil news was released mid morning that the markets took as bullish- and the trade momentum promptly reversed against my positions.
I was able to catch a portion of the market reaction initially to the news and elected to raise my stop on a split stop to protect some of the initial gain- and a smaller portion to withstand a bit more volatility - but intending to try to maintain a short financial position- albeit in profitable territory.
After the fact, and another day has closed, price has since moved below what would have been the prior swing low- and also would have taken my initial EOD entry stop out for a 3% or so loss, had i not adjusted the stops higher.
TWM bought at $47.33 and stopped out at $48.00 (Had gapped higher and moved up to about $49.25- and then started to sell-off.

On both of those trades- reacting to the change in market direction & sentiment was only possible by "being there"- Both of those trades locked in gains- where the initial EOD orders i normally have to rely on would have allowed the profits to evaporate and both become losing trades. The price of trying to trade in the midst of non-trending volatility.
Where i lost was on the QID trade- essentially wiping out the reduced gains .
The Qid trade was valid at the time I entered it the prior evening- and even after the next day open- QID was a buy-stop entry- and price exceeded my limit order - I adjusted the limit order slightly higher after the open, but did not chase to get a fill- I anticipated that there might be a pullback following the open - and left the adjusted order -
The order filled as the entire market sold off all short positions and went long-
QID entry $35.52 at my limit- and sold at my stop of $34.80
QID closed today at $33.68.
SKF closed at $54.50
TWM closed at $45.38

Market is putting in a rally to end the week-
What did i learn from the few trades I made this week?
Short term reacting made the week a wash as for trading profits-
Short term reacting to changing market conditions/news- saved the week from becoming a losing week.
i do not usually have time to access the market's action intraday-Those trades would have all been losing trades as EOD set ups.
Problematic. The ability to hold greater control of a trade outcome by being able to
monitor the trade and adjust the stop makes sense-

 

[sowterdad]

...............deleted the earlier part of this rant..........prosperity as baby boomers reach the age of entitlement, our once stable manufacturing industry has long since gone overseas-
and Americans- while still a world economic powerhouse- lag in adapting to the powerful forces that cause these economic shifts - Perhaps a very good example of the disruption is that through new technology- we have suddenly become a huge energy producer- and we are now the Saudi Arabia of huge supplies of natural Gas- and Oil-
Good for US! No more dependency on Arabs that despise the US.....

Instead of This new found energy access liberating & igniting a decades long period of growth within the US- The laws of global supply and demand quickly impacted the US employees in this industry- with substantial cut backs and lay-offs-and reduced oil/energy prices.

Too late to continue on this little rant- but it pays to look out ahead in traffic a number of cars ahead- and not just at the tail lights directly in front of you-

If the market does not like uncertainty- it looks like this election cycle may prove to be a catalyst . At some point- Fed policy, Global policies, and a brand new political change in the US will make for an interesting political -and economic -year- Why should the Market be immune to that type of indecision?

Got some baseboard done tonight!

 

[Swift5]

What is the deleted earlier part of this rant? Would be interest to read.

"Wider volatility swings make holding a position for a longer period of days-weeks -a real challenge to one's Risk parameters- because- as they say- the market can remain irrational longer than a trader can remain solvent-and perhaps for myself - the best defense is to sit on the sidelines- try to identify an early swing - and just try for bunts and not triples."

- How true this is for all traders in this market! -

Almost forgot-got to test out the tornado shelter last night as severe weather came across NC- 4 killed in VA. The storm shelter is analogous to a stop-loss-
Better to have one ready and not need it- Than on the rare occasion one needed it but it was not in place." [/QUOTE]

- A vivid analogy to remind those who have not yet acquired the good discipline to put in a stop-loss once a stock is purchased. -
- Thanks for posting! -

 

[sowterdad]

The delay in responding: I have been off-line for weeks-intentionally allocating my time to those things that carry a higher priority ; taking a leave from trading, investing, the financial news channel, etc.
My time and interests have been fragmented for some time due to demands at work and in my personal life with ongoing projects -and more time spent involved with Family- a greater priority.
My edited segment was a complaint and projection that world we live in today is seeing the natural force of an economic shift - that ultimately is a pendulum swing of the economic balancing of the populations-
Some issues: We balance our household income- and live according to our means.
The US Gov't doesn't do that.
The US Gov't -while spending more than any prior Administration- and pushing our debt level
out to extremes, seeks to mitigate the excess by talking about reducing "entitlements"
The US gov't -if these statistics I have heard repeated are correct- has 94 million Americans
off the defined labor statistics and are not counted as among the unemployed.
If it's true that all of these folks are unemployed, their benefits expired, how do they survive?
"New jobs " are often lower paying service sector jobs- And people seeking full time employment are often held to just part time employment so the Employer does not have to pay benefits.
Companies -that can- exit the US for production facilities outside of this country- leaving behind American workers- like Carrier Corp in Michigan(?) going to relocate totally to Mexico

It's perhaps simply "Supply and Demand"- As companies seek to reduce their input costs and stay competitive- because most consumers have a limited budget- and "Costs" are an important part of the decision when making a purchase-Companies that sell a product - Like AAPL- find it an advantage to have their corporate offices outside of the Over Taxed arm of the US of A.

Healthcare- For those that have decent jobs (Myself included there) -
We may have affordable group plans . What about the remainder?
It's a big political football that Republicans claim they will repeal Obamacare -and I've heard a few say they will replace it with something else- But what is that?
How can you have such a big segment of the population that is uninsured and then goes to the Emergency room for the most expensive approach for access to healthcare?

When you hear the expression that the middle class is disappearing and that 1% of the population has 90% of the wealth- That the wealth gap is ever widening-
That we have the lowest work force participation in decades,
That over 50% of American workers have NOTHING saved for their retirement-
And of that 50% -realize there is a wave of retiring Baby Boomers that will live on only Social Security- No pensions-No IRA...... and many will be below the poverty level with their earned monthly income payments.
And- I heard this last week- 22 Veterans commit suicide every Day? Is that possibly true?

And YES- There should be a legal process to enter and work in this country. and Vetted.
Americans are generous, and we seek to help those in times of need-
Workers should be required to have background checks to ensure they have complied with the legal entry requirements. I don't want to take anything away from those that seek to improve their lives for themselves and their family, but it should not result in an American worker not able to find a job. This is not being a racist- It is just the economic reality that a constant influx of illegal immigrants- the majority who are decent hard working peoples, end up being a constant supply of workers able to take those jobs that many unemployed Americans would fill. Sorry- it's a reality.
Import quotas have been used in the past and should be implemented and enforced today. Work Visas should be issued depending on why the demand has not been met by workers already here. Supply and Demand should be respected here in the US to benefit those that have worked here, pay taxes here, and have raised their families here.

And we could talk about Gov't- How it is an ever growing larger entity-

That was part of my little Rant- Seemingly not connected directly to Trading- and perhaps not appropriate for this site- But the structure of our economic environment is indeed relevant to Wall Street-
What happens over time as resources get stretched- tighter, and a larger proportion of the citizenry feels they have been ignored & disenfranchised -

Those that are in the "Have" decent jobs category- naturally feel that the others should have done something else- made better choices- planned better in their lives etc
Personal responsibility is Important- Because you are born in this country does not mean you get to Live the American Dream
Some astute economics professor - can't remember his name- pointed out that politicians and the like may highlight what they want us to see, but the real cause and effect is often not what they want us to focus on-They simply want to direct and divert the attention of the masses .
Enough of my political,social commentary .

A final Note-related to Trading - and this thread-
I have found that I am not as disciplined as needed- or willing to make the effort required to succeed in trading as a part time half-assed endeavor.
When I decide to do some future trades, I trust i will be more demanding of myself .

Good Luck- and don't forget- Have a Plan B , just in case......

 

[Swift5]

Thank you for sharing your political and economical viewpoints. They are not only valid but also interesting. The area I often have trouble to believe are statistics throwing out by all sort of parties. As you know numbers could be manipulated by leaving out conditions, intentionally or unintentionally.
Thanks also for reminding us to have a plan B. Good Luck to your Plan B as well.
Wish you a great life outside of the trading world!

 

[sowterdad]

You are welcome Swift.
Points well made -we each choose to interpret what we want to think is valid-through our own perspective.
This would seem to also be true in trading -we favor what we choose to believe= or to see.

Plan B was a poor choice of words- - We should have a substantial financial life plan in place first that is Plan A- and should be a prerequisite that is funded prior to taking one's savings and choosing to trade- based on the popular statistics of
under performance & likely failure to meet market returns of the majority of us would-be traders/market timers.
Plan A should not be -I will achieve financial success by trading" Plan A should max out our financial obligations in a responsible manner within our present income. particularly if we have a family to support.
Plan B-Life takes us down many paths, and we may believe that $Money will be the primary solution to a better life- Where we meet all of our financial obligations for ourselves and our families- First- and plan B is secondary- where we have met our primary obligations, we can then apply excess funds in our trading venture-Funds that we felt we could afford to lose- that would not affect the quality of life of our first obligations-

As a final note this pm, Everything comes at a cost-
Sometimes that cost is well defined and calculated- sometimes it is hard to quantify - like time missed with Family because of work- or on screen time.....What is the benefit of the time spent vs the actual net gain?
I think that if we all track our time involved in pursuit of financial gains, we would be surprised at the hours we have consumed - At what Cost?
Good luck!SD