The 'Falling Knifes" ETF is itself a “falling knife”.
Doc,
Here’s that same chart template with a good example of what Wade Cook might have called a “rolling stock”. Mind you, he was writing back in '98, years before Quill came onto roughly the same idea with his Simon Sez methods.
In short, there is nothing new. Just constant rediscoveries of what has already been.
Andy,
You might want to get hold of this book. (Haven’t read it, but it looks like what you’re trying to put together.)
Thank you Arindam I appreciate it.
Andy
Andy,
The way I look at buying investing and trading books is the same way my son looks at cook books. (His collection runs to 300 or so. Same-same for me.)
He says if he gets one good idea, then buying the whole book was worth it. I say that one tip from a trading book might easily save me more money than the book cost. So both of us doing a lot of buying (and cooking and trading). LOL
Hi @Arindam,
I have been paper trading some of these based on from you, Andy, Quill and others. I have made a few actual trades and have had only 2 small losses.
I believe I am not correctly identifying a Buy/Sell in the correct time frame.
Here are three charts from tonight. My impression looking at them is I should have bought them today or earlier.
I would really appreciate if you or someone else could list the dates on the charts that you would consider a Buy/Sell.
Gene
All holdings and some statistics on my Fool profile page
https://discussion.fool.com/u/gdett2/activity (Click Expand)
Hi Gene,
I dont have stockcharts, but based on Barchart…For LABU, I would say March 27
I am totally new and learning…so, I put this up to see if I am right - I am sure the others will pitch in!
Charlie
Gene,
Your charts are a cluttered, jumbled mess. You gotta clean them up by getting rid of everything except the bare essentials.
Second, you’re going to get killed trying to trade the 3xs off of EOD charts. Those contracts move way too fast and way too erratically for EOD methods.
Intraday? Not a problem. Yesterday —or maybe the day before - I watched LABU --or maybe it was LABD-- make an 11% move in about 20 minutes. I was plotting it with colored hollow candlesticks on a 2-minute chart --3-minute? I don’t remember-- and the bars were printing green, bam, bam, bam, one after another, no breaks, no hesitation, no stalling. A couple times a session, all of the 3xs print that way. The rest of the session, it’s just chop and stalls. Therefore, as Quill says, you become the spider and wait patiently to pounce.
Hi Gene, Nice you are using the price labels ? How do you like those charts? Let me tell you about trying to trade anything in a sideways movement by doing anything but day trading. You really have to watch them, minute by minute like Arindam said. I tried doing them on a swing trade and it doesn’t work out well. But in an up and down market they would be great for swing trading.
So looking at Labu I would have been in on the 27th, out on the 6th, back in on the back in on the 11th, out on 26th. Quill probably would say the 6th is a head fake but that is how I would hopefully play it.
On SPXS I would have been in on 5/2 that was the low price label. Now earlier I was trying to get in on any low so I probably would have been in on the 16th, but after talking this through with Charlie and Arindam I realized I was doing this wrong. This is all about getting a low on a 2 month chart and trying to ride it up. Get in to early then you have to day trade it, which I have had to do on SPXS. Here is Barchart that I can see more clearly, you want the smiley face on the low and buy next green bar.
On Tecs I would be in on 5/3 Right after the last read bar as shown on this chart.
I notice on your chart it is black so I am not sure if the rules might be a little different for you but I would say the first open body candle? Well hope that helps Gene and hopefully Quill and Arindam will chime in to better help you. Glad to see you here because you have always been a big help to people.
Andy
Hi Gene,
I am new to swing trading, but I’ll tell you my take for whatever it’s worth. I did buy SPXS on 5/2. I’m currently up 1.86%. Prior to that I would say the buy signal was on 4/19 and sell on 4/27. I will say this sideways movement is certainly not the ideal situation for swing trading this one, but I am experimenting and learning. The LABU chart is not anything I would dare tackle at this point! Looking at the TECS chart, I might have bought on 5/2 since the StochRSI showed it coming out of oversold territory. But I also might have waited for more confirmation since 5/2 was a doji, and bought in 5/3. I’m mostly following Quill’s Simon3 rules currently.
Just to give you a heads up, the price label that tells you to buy in will disappear if a lower low occurs soon thereafter. For example, I bought NUGT on 4/25 after a price label showed up on 4/21 followed by a green candle on 4/24. If you look at the chart today, you will see the price label on 4/27 instead of 4/21. I saw that things had changed, but chose to stay in this one because it was just sideways action, no serious drop. Now it’s going up. So this one did not cause any problems, but it is always possible it could really go down. Just something to watch out for.
Lisa, Gene, and Charlie,
You take risks I try to avoid.
Lisa. You got into NUGT on 4/25. But here’s how I’d chart it when 4/24 is at the hard, right-hand edge.
#1, MACD was negative. (Not a good sign.)
#2, Though the Force Indictor had begun to turn up, it was still negative.
#3, Parabolic is printing negatively.
#4 Though prices closed up from the previous day’s close, they still hadn’t yet closed above the 3-period MA (the blue line).
#5 Prices were still pretty far above ‘Support’, the 29 to 33 channel.
Four to five clearly negative conditions and one or two marginal ones? My instincts --not rule set-- would tell me to back away and to look for a better, less risky setup, meaning, a setup that clearly depends on ‘mean-reversion’ rather than regaining ‘momentum’.
In short, I’m a Chicken Little Trader who lives by this rule: “Better a missed opportunity than a realized loss.”
Arindam,
this is the information that really helps us. This post gives us huge insight into how you evaluate a trade. You didn’t even mention a harashi or doji LOL. Thanks so much because this is the meat in evaluating a trade…doc
Arindam
this is MARA on a one month. How would you evaluate this? Buy or watch. There is a green bar just after the arc, but the MACD is red/negative. TSI is crossing over to the positive. Teach please sir…doc
Doc,
No, No, No, No. I’m not here to “teach” anyone. I’m here to learn. My modus operandi is this. If I can expain it to someone else, then I can explain it to me. Hence, I post, post, post, because I’m scrambling --just as everyone is – to make sense of this investing/trading stuff.
If you want to buy MARA, then buy it. I wouldn’t, because its fundamentals suck.
Thanks you oh wise one, I forgot to check SWS. My son wants to learn to trade off charts. I’ll remember to show him SWS. I’ve been screening the CANSLIM stocks for buy signals. What do you think about that? I’m looking for stocks that cycle up and down, have an uptrend and looking for that arc off a low…doc
edit: more from SWS
CANSLIM is a solid method, as is everything O’Neil is involved with. A really solid shop. His book on shorting stocks is very worthwhile.
Arindam,
I’m learning a lot here from everyone that participates. One thing I’ve learned is that instead of day trading UCO SCO, I should have been swing trading it. Looking at the charts, its amazing what could have been made the last month. Lesson learned…doc
Doc,
A bit of follow-up on using SWS.
I haven’t done a careful back-test, but what I think I’m seeing is this. When I can get a “green light” from SWS and a “green light” from my chart setup, I make decent, low-risk, small-worry money.
Quill can scoff at the “funnymentals” all he wants. But they matter, and it will become increasingly important to have the winds of favorable ones at one’s back as we go forward from here toward the deepening recession/depression.
Notable chartist and technical analyst, John Murphy, puts it this way:
TA (Technical Analysis) + FA (Fundamental Analysis) = RA (Rational Analysis)
Yeah, for sure. Anything can be traded on a purely price-action basis: stocks, commodities, currencies, whatever. I’ve done it. We’ve all done it. But that’s a high-stress, high-effort, high-risk gig I don’t want any part of these days. It’s more important to me that I can sleep easily and well at night than that I’ve got a fatter trading account.
In time, if things play out as I expect they will and a true bottom is reached, then I’ll have to get up off my b*tt and go to work. But we’re still a couple months away from that.
Doc,
I hate to pitch commercial products. But SWS is something anyone who’s serious about stock investing should subscribe to for the grief it will save them and the time it will save them. I know my way around a 10Q, and years ago, when I was breaking into the bond market, I went back to school and took the lower division accounting courses. But SWS makes all of that unnecessary. As corny and as brief as their snowflake analysis is, that’s often all that’s needed to reject any further consideration of a stock that’s being touted by the usual suspects.
What does SWS stand for? I want to add that to my resources.
My decision to buy NUGT was based on Simon3 signal, plus Stochastic RSI showed oversold, plus I have a strong sense that gold and gold miners have a very solid future. I don’t have the MACD on my charts currently. Not saying I might not switch to that and try it out. I am trying different things and making notes in a spreadsheet on every trade. How I decided to get in, how I decided to get out, plus what happened in between if I held it long enough. I’m evaluating it all. I will keep what works best for me and drop the rest. Small positions are keeping me out of trouble during this evaluation process. I can look at my spreadsheet and see the patterns in what worked and what didn’t.
On the subject of spreadsheets, if any of you are just beginning like I am, if you track all of your trades and calculate your average percent gain, average days held, and then calculate what that average is in annualized terms, it is pretty exciting!
Lisa,
Here’s the link. https://simplywall.st/ To be useful, you’d need the “unlimited” subscription at $20/month. But demo it first to see if it’s useful to you.
Suggestion: rather than “add” MACD, create a new chart template that incorporates it. You can look up MACD’s formula and use at StockChart’s ‘Chart School’. But here’s a hack. The defaults are (12, 26, 9). Obviously, (12, 27, 9) is close enough. But now this becomes possible: (4x, 7x, 3x), where X= 3 in the default version.
To create versions of MACD that signal slower or faster, just change the value of ‘X’. Also, there’s a cousin of MACD called PPO that you should explore. Also, TSI --which Quill loves-- can be configured to signal about the same as MACD. So, use one, or the other, but not both to avoid “co-linearality” (i.e., indicators that say the same thing).
Thanks Arindam! I will check those out. I appreciate the suggestions!
