Simon Sez 3 Real-Time Tracking and Learning

Given all the discussions going on, I have decided I can best learn and help others learn by posting my “real-time” trades based on the 2 simple rules of Simon Sez 3 and using only price labels on StockCharts web site (SS3-SC). I invite everyone to comment on how I did not follow @Quillnpenn two rules correctly.

I particularly invite everyone to track their real-time trades using this method. We don’t need to know if it is 1 share or 1 million, just a chart showing price and date of the buy. Don’t worry about your ego, let’s just show what we did and discuss if it was right or wrong.

Please don’t pull any past charts to show the ideal thing we should have done last month. Let’s talk about now.

Thanks, Pete

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While going through my lists today, the Saul list showed AXON was a SS3-SC buy and MNDY was waiting for the first green bar to be a buy. Around 3:30PM I bought some AXON (Which I had recently sold based on price labels).

Here are my other current holdings for reference and discussion…

I passed on XLE because I thought the energy area had more downside, so I missed out. The price labels never lie…it seems.
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When Quill saw my posting of SPXS and SH he said something like “Ollie, I think you got it”. He never asked what the HA smoothie charts were saying.

Pete

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Dipped half a toe into NVDA this morning. That answers the question of whether the Stockcharts price labels don’t appear until the following day. There was no price label last night. Now there is. Seeing buy signals on some other charts as well, like COIN.

Dipping is a good way to start. This seems to have the extra positive of finding support at the 20dma (I use 21dma).

I feel much better that I found that blurb on the SC website that says the price labels are “look backs” and don’t get put on until the next day. That explains why they are so accurate :wink: I still wish I knew their algorithm, why aren’t there more, why aren’t there fewer? There is some rule somewhere.

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Yes, that’s exactly why I chose NVDA over others that had buy signals–it’s above the 20dma. I won’t be at a computer this afternoon to execute, but if a reversal happens and the bar turns red, ideally I would sell before today’s close? Is that the rule? I could put a stop below yesterday’s low… I wonder if then the price label would go away.

I’d like to know too, but I suppose as long as it works, we don’t really need to know.

SS3 does not discuss sells beyond the high-price-label print (frowny face). Andy mentions putting a 3% stop loss in the beginning. Quill has mentioned have a “business plan” where you document your own personal rules (position size, stop loss, profit taking, etc.)

If I channel Mike Webster of IBD he might say “now that support has been found at the 21dma, our expectation is that it will not go below it, but will continue up. When our expectations are broken, we need to change course” So, that is a rule of thumb, but useful to think about.

Webby also talks about 50% retracement areas. So, the high was $140.76, low was $118.o4 yesterday. 140-118 = 22, so 50% is 11 or around $129. If it can make it above that, then you start feeling good. If it keeps getting rejected by that, maybe you take quick profits.

Another thing the IBD team talks about is knowing how much you might lose when buying and setting the associated stop. If you stop is the 21dma or the bottom of this 3-day slide, then how much above that price was your purchase price. For portfolio risk, what will that do you your portfolio (because of position size).

I can’t say I am a wizard or great trader, I just try to learn and repeat the wisdom of the IBD team, so that that for what it is worth.

I am just a blind man telling you what someone told me colors look like :wink:

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I am not someone you want to listen to but after all the reading I am doing I would say with SS you want to keep your stops tight. What you are looking for is alot of singles, not big wins. So you are going to go into the trade realizing how much you are willing to lose and also how much you want to gain. When you hit either one out you go and on to the next one. You do not want any trade in SS to be an investment. Keep your rules strictly and keep track of everything. You are not looking to have everyone of your trades to be winners you just want to have your winners be 2:1 your losers. So if your wins are 10 percent your losses can’t be more than 5 percent. If your wins are 4 percent your losses can’t be more than 2 percent. That way you are compounding your money.

Andy

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Ditto!! Agree 100%…I havent documented but with the trading I have been doing - that is my biigest mistake - sell when I see even small profits, but freeze when it goes into a loss…hope I can sell when it recovers a bit more, and that makes it even worse…my loss of a 5% becomes 30 to 40% and then goner!!! I think Mark Minnervini dedicated an entire chapter on this - I read it, but still mighty hard to practice…Yet, that is probably the number 1 thing to do…I need to forget what happened to me in the last 2 to 3 years…and what matters is only what I have in front of me…But yes, if my win % is just 3%, my loss can not be more than 1.5%…All to do with compounding and how much it takes …Or I should become really good at picking right stock, at right entry, and then may be try to allow the profit to hit a higher %…

Andy - I decided to just hold onto NVDA and AVGO. They are at a loss, but it is okay…if the AI theme fails, then the entire QQQ/SPY etc collapses…OTOH, if it is just some proft taking, rotation, market shenanigans doing their thing, then yes, these 2 should come back…They are in the thick of it…If NVDA ever falls into the 50d - which is 100 ish, I will buy lots more…

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I decided to sell all my NVDA Charlie, LOL, that is what makes a market. I am hoping it will come down but who knows. Good luck I hope you hit a homer.

Andy

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This is one place where it would be super helpful to know how Stockcharts is doing its price labels, or at least if they can go away or shift once they are set (like the smiley faces can get shifted).

In the case of NVDA, if tomorrow it were to fall below the current price label of 118.04 from Monday, would that price label go away? I don’t know, but I suspect it would. In Barcharts it would. Presumably the vanishing of the buy signal (price label) would mean you should get out immediately until the next buy signal, if you were strictly doing SS. I wonder what a 10-year-old would do? :slightly_smiling_face:

That looks to be the downside of SS that you don’t see if you just pull up a chart and eyeball the past price labels, like I’ve been doing. You could pile up some losses there.

Interesting discussion of Stockcharts price label methodology on this board in Feb 2023:

Carpian, I have already posted the answer today on one of my many threads here and demonstrated it with CELH. The price labels on SC charts are always perfect because they change them to make them perfect. E.G. CELH had a low price label at the recent price low, then today, the price fell below that and the old price label was removed. If Quill had bought that price label (day 2), he would have been under water and had a losing trade.

They also say there will never be a price label on the right-most candle because they only apply labels to past highs and lows.

This is today’s chart for CELH, the low price with my two redlines is where the price-label was until today. Perfect.

Yes, this is a huge problem for those of us that don’t have our own rules to follow here. At a minimum, I think you’d want to have a stop below the price label that triggered the buy signal, because if the price falls below that, the buy signal/price label will vanish.

For the NVDA that I bought today, it makes sense to me to place a stop under today’s low, because if tomorrow it falls below today’s low, to me that says that the trade isn’t working out as well as planned and it’s time to bail. It would be a loss, but a smaller loss than if it went below the price label.

I look at a chart like GLW, and think "God, I wish I had been doing this and caught much of it’s nice rise from the low label of 30.49 to the current high label of 40.46. But I suspect that in real time, there were some sell signals that popped up along the way that later vanished, and you wouldn’t have been holding the entire time. Maybe not long at all.

I reviewed the Sector ETFs today and came across the XLK and SMH which raise a question about what folks think about the leeway in the rules.


NVDA is almost the same, but today is green for it.
Yesterday was clearly a buy day for these, but for some reason I did not do my scans and missed these. But today, the price is down and below yesterday’s highs. How wrong would it be to buy them today with the rationalization that the price might be below the 3:30PM price I could have got yesterday. And, since the market is now closed, if they are slightly down or flat tomorrow is it ok to buy these?

Technically, the rule is buy out of the gate on day two. I wonder if @Quillnpenn would buy these at today’s close or a few pennies lower tomorrow at 10:30am?

Thanks, just trying to learn the subrules of thumb.

Here is another thing I need to learn to put into a rule, so I am asking for some expert help. The high price bar is being put on at a lower price than the previous day. That really throws me off. This says rule #2 starts today and I sell tomorrow if the bar is red. Does this happen often? What am I missing? @Quillnpenn

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Thanks!

I see no reason not to do this if you can get in at essentially the same price you would have on the original buy signal, and that buy signal still exists.

Here is another interesting “gaslighting” chart. I bought XLB and posted the chart last week or so. Rule#2 forced me to sell it today, which was day 2 after the high price print. But when I look at the chart right now at 7:40 PM, bot the buy and sell price labels are gone. I understand that it does not matter if I am reacting in real time, but if I miss a day and then the sell alert is no longer there, I don’t have a rule to apply. Maybe that is what happened to the XLU chart above and why it is so confusing or at least annoying.

So this was a losing trade for me, down 0.92%

3 of 4 were losers. I have noted a couple things to work on with timing and I really don’t know what happened yesterday, missing the sell requirements.

Thanks for any constructive feedback.

What when wrong? My green buy line does not make it seem like I bought too late. My red sell line may indicate I sold a little late. In swing trading like this, the smallest percentage makes a difference so buy and selling precisely is important. But in this case, I probably would have just lost less.

Here is my XLI trade

It was a loss, but either I missed the daily check or price labels were missing because I should have sold it yesterday for a tiny profit.

XLF was a winning trade for me…

and if I wasn’t in a coma yesterday it would have been more profitable.

AXON was a loser for me. I looks like on the buy day, it went way down after I bought it. And after I sold it today, it went up a bit. (I sold around 3:30 or so).

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It was red most of the day, but closed strong to finish green. That should bode well. From somewhere in my trading past, I remember hearing that the price action at the close is the most important of the day, as opposed to the first hour of the day, which I’ve heard dubbed “amateur hour”. The Naz and S&P also closed the day strong.

For today, I set a stop below the previous day’s low. I thought it might trigger for a while, but it didn’t. I suspect it would be more in keeping with SS, if not the actual (unspoken) rule, to hold until either the price label goes away due to a fall, or you get a Rule #2 sell signal. So I think tomorrow I’ll go with that.

This is where it would be helpful to know how the labels are generated, so you’d have an idea where to set your stop. Presumably the more time that passes, or percentage gain that occurs, decreases the chance that the current low price label will disappear and increases the chance that the next sell signal will be a Rule #2 signal.

Your XLU chart with the Rule #2 label lower than the high from a couple days prior was super interesting. That’s certainly different from what you’d get on Barcharts. I’m not sure what to make of that one either.

Thanks for posting your trades! I’m guessing that this method (at least as we understand/don’t understand it) generates a fair number of small losers.

It may help the batting average to find trades where the buy signal is at or above the 20dma. Those are probably hard to find, since to generate a low price label I suspect there has to be a pretty significant decline. I felt lucky to find that with NVDA, which has gone well so far.

I need to clear that up, I was confused. The current price you see over to the right “68.90” is really the price of that green bar I drew. Price Labels will have a border around them. Sorry about that. But I was pretty sure I once saw a high price bar printed, but apparently I ate the wrong mushrooms from the fridge.

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