Ok @Quillnpenn teach me. I just bought uber. I am sure I bought it 2 days late, but on the regular chart, it is finally above the 50dma so I thought I would pick up some here. What would the master have done?
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Re: UBER
When you mention 50dma, are you using 50 EMA or 50 SMA? Big difference. Most swing traders use EMA which is closest to the vest.
re: UBER : I would have picked up UBER on 6/5/24 per the rules ( buy on the first green bar after the smiley face). However using OHLC charts, UBER would have been picked up on 5/31/24 per the rules again at around 3:30 pm.
Quill
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Re: IGV
Charts donât lie people do.
Per the rules (buy the first green bar after the smiley face) June 5th was the day to purchase IGV. My OHLC charts are showing caution on Friday.
Quill
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Quill,
My rules wouldnât let me get into IVG on the 5th. The 6th? Yes, but not the 5th. Thatâs a day later than you. But also, Iâd have been out of IVG on 5/22, probably a day or two earlier than you.
Hey Quill, Iâm no IBD aficionado but from my exposure a while ago to Leaderboard, I had tracked that down that they mean a 50 SMA
My pet peeve with IBD, make up your own terminology to keep folks connected and subscribing to you. To most OCD technical analysts, DMA refers to âDisplaced moving averageâ which by convention is a displaced SMA; however, ANY moving average (Exp, Weighted, Triangular, Hull, etc) can be displaced. Why do we have to make it so, so hard!?! Keep it simple (or should I say exponential 
) please.
Lakedog
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I searched that article for SMA, EMA, Simple, Expo and none of those terms were there. The following screen shot is what Mike Webster says to use, all EMAâŚ
I donât know why I donât have the Monthly MAs selected, I will have to go back to the video and see. I have not used the Monthly chart much.
So use Quillâs rules to get in and yours to get out 
Pete,
But the rules Quill says he uses arenât the rules he actually uses.
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I was wondering how you keep this simple enough for a 10 year old, but then also say to look at the OHLC charts for âsomethingâ
The second and third paragraph from the IBD article:
To refresh your memories, the 50-day moving average is calculated by taking the closing prices from the last 50 trading days, adding them together, then dividing by 50. Plotting this alongside a stockâs daily movement helps to smooth out the action and give you a better idea where a stock is in a current run.
Letâs take a step back, switch your chart from daily to weekly and you can smooth the action even further. Your 50-day moving average has been replaced by the 10-week moving average. It covers the same amount of time but is calculated using 10 data points instead of 50.
The definition of Simple Moving Average is exactly that above. Itâs just the average of whatever length of the close for the selected period.
SMA=Sum(Close1, Close2âŚClose-n)/n
My posting use of some of those terms was in reference to that when using standard nomenclature, Displaced Moving Averages can be calculated for every type of moving average and I listed those as example.
When you follow the instructions given by Mike Webster and use exponential moving averages, how does it appear in your chart legend?? As dma or Exponential? I seem to recall Leaderboard listing daily moving average and daily exponential moving average. One hopes that they at least list them differently.
Lakedog
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It appears like thisâŚ
I fully trust IBD uses the settings that I choose: SMA vs EMA. It would be absurd to think they were too lazy to care what I or Mike Webster chose. But yes, the article seems to indicate the default is SMA.
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From what I understand the only one that is EMA is the 21 day and everything else is SMA.
Andy
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If you look at the bottom of the graphs you all post, at the left hand side, it often reads: âChart Legendâ However, thatâs the bottom of what you post. What Iâm asking is simply what is actually below that, it should read what type of indicators are on the chart. Thatâs what I was asking.
Iâm not arguing about IBD and you certainly should trust them. Iâm just arguing for a standard description of whatâs being used. The goal is to share and learn. Speaking different languages makes it difficult and prone for mistakes and misunderstandings.
That jogs my mind. I am sure from my days with Leaderboard, they listed a 10 SMA, 21 EMA and 50 SMA. I donât think in LB they let you change the graphs much.
Lakedog
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You canât change them much but this is the Weekly chart and if you look at it, it came with 10 SMA and 40 SMA already. You canât change those, I added the 30 SMA. On the daily chart it comes with the 50 SMA and 200 SMA you canât change those either. The way to tell what they are using is to click on the chart for price and it will pop up with the SMA readings.
Andy
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OK, they do not show what you have chosen for the price moving averages or for the RS moving averages. They expect you to remember what you set them to. Like I showed, here are my settingsâŚ
I checked of Exponential. I set the values to 13 and 21 (though 21 might have been the default.
Also, you are right about the 50 and 200dma. They come as defaults and they donât say if they are SMA or EMA. I will have to call up and see what they say. Good catch.
Pete,
In its simplest version, Quillâs system really is simple, and it amounts to âBuy low. Sell highâ as signaled by watching for the Hi/Lo flags and following the 'Wait One" rule. Thatâs clear cut. That has a users taking only unarguable signals.
What Quill in fact does --from decades of doing thousands of trades-- is use âfeel and finesseâ that gets him into trades sooner than the âofficialâ rules would permit. And he can so do, because of those decades of experience.
I canât keep track of all the Simon Sez versions. But pick one, any one, and write down the rules. Then apply those rules to a couple dozen charts from widely divergent industries and asset classes, marking up a yearâs worth of data for each of the test candidates.
What I predict youâll find is that his system nails the moves, in and out, the majority of the time. But Iâll also predict that youâll find yourselves arguing with the rules sometimes and saying, âThatâs not how Iâd have traded that situationâ.
Can a âRed Light, Green lightâ decision system be given to a kid that will make him or her money? For sure. Itâs called âsystems tradingâ, and it can be done. In fact, I had a friend who developed such a system for himself, put in on auto-pilot, and retired on it The boys over at the Mechanical Board offer dozens of similar systems.
Charlie
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But if we are using 2-month HA charts, you canât look at a 1-year chart and mark it up. The smiley and frowny faces change and go away as you change time periods or if you slide the chart backwards on Barcharts. Right?
Pete,
A 2-month chart be scrolled back in time a full year and then walked forward one day at a time, placing an âupâ arrow every time a âBuyâ is signaled and a âdownâ arrow when a âSellâ is signaled. There are going to be some whipsaws. But following the rules should give a net-positive result.
The reason for looking at at least a full year of time and at many different tradables is to ensure that the rules perform well enough under all market conditions, not just when the bulls are running and anything works. Whatâs wanted in a trading system meant to be easy to use isnât the best profits, but the least grief, which calls to mind further rules that needed to be added to Quillâs system(s).
(1) Never force a trade. If the chart is a mess and the signals arenât crystal clear, stand aside and wait for a better opportunity. (Quill calls this âBeing the Spiderâ)
(2) Make your all of your openings equally-sized and small, because you can never predict when prices will reverse on you. In fact, more often than not, they will retest the low youâre coming off of, and maybe multiple times.
(3) Average up, never down.
Charlie
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So if you are trading a 3x ETF should you only invest 1/3 of ânormalâ stocks and ETFs?
Pete,
I havenât yet decided --for myself-- a âproperâ way to manage leveraged ETFs, which is ja sub-set of the problem of how to manage tradables that are highly volatile. The solution you mention would probably be my inclination, as it was when I was trading bonds. Everything was put into one of four categories and position sizes were scaled accordingly: 4x, 3x, 2x, 1x. That made me good money, yet kept me out of trouble.
- Cash & Equivalents
- Defensive
- Enterprising
- Speculative
What anyone else does is up to them. Chefâs Choice.
Charlie
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