Closing it out for 2020

December 20th, 2020

We are closing all trades for this blog as we come to the end of our trading year and what has been a diabolical year for many.

Our portfolio is sitting at: $142,130.90

Let’s close our trades first…

S&P 500: SSO = UP, SDS = DOWN

SSO

SSO is the ETF that mimics the rise of the S&P 500. We exited our trade at the close of the market December 18th, 2020. Here are the details.

$89.32 (sell) – $85.63 (buy) = $3.69 X 165 shares = $608.85 gain

Gold: UGL = UP, GLL = DOWN

GLL

GLL is the ETF that rises as gold declines. We actually were stopped out of this one on December 17th, 2020.

$35.15 (buy) – $31.51 (stop sell) = $3.64 X 400 shares = ($1456) loss

Oil: UCO = UP, SCO = DOWN

UCO

UCO is the ETF that mimics the rise of oil.

$37.40 (sell) – $35.53 (buy) = $1.87 X 400 shares = $748 gain

Dollar Index: UUP = UP, UDN = DOWN

UDN

UDN is the ETF that mimics the decline of the U.S. Dollar against a basket of global currencies.

$21.77 (sell) – $21.41 (buy) = .36 X 650 shares = $234 gain

The portfolio ended the year at: $142,265.75

We started this theoretical exercise January 1st, 2020 at $100,000, ended it December 18th, 2020 at $142,265.75 representing a gain of 42.26%.

I think we have proven the point that a simple method followed in a process oriented manner can produce more than decent returns. Please keep in mind that we only used 5 market instruments.

In other words, anyone can do it!!

“Yes, you in the back…what’s next you ask”.

A new exercise. We continue with this balance, but we will expand our methods to encompass those used in a course I have available. We will be scanning the S&P 500 for divergences, commodities for patterns and currency pairs for moving average crossovers.

All of this will be laid out at the top of each post. You can get started by clicking:

https://tradingmadeeasy.gr8.com

You will be whisked to a sign in page, input your email and you shall have a link to a Webinar that you can watch at any old time you please.

I would like to wish you all a “Merry Christmas and a Happy New Year!”

TTFN,

Charles

charlesgoddard2020@gmail.com

December 16th, 2020

Today we have to take the good with the bad. We were triggered into a trade, but as I looked at it I realised I had made a mistake.

It happens. There have been at least two so far this year.

Let’s take a look at the missed opportunity.

UCO

On the right hand side you can see that in the clever yellow box we cleared resistance (a candle CLOSED above the resistance level). A stop-buy was put in just above that level at $35.53. We were then triggered in as the price touched that level. We then put in a trailing stop at $30.05. $5.48 below the trade price.

The details of the trade are as follows:

$14,000 (10% of the portfolio)/ $35.53 = 394.03, rounded to 400 shares.

Risk = $5.48 X 400 shares = $2192 (<$2,800 (2% of the portfolio))

Therefore based on our process we are in the trade and wishing it well.

The mistake: the look back period for resistance is usually 60 days. I have placed black vertical lines 60 days apart. The level of resistance we could have used was $30.26.

This means based on our process we could have gotten in $2.20 cheaper than we did.

We could be half way to breakeven by now.

These things happen. All we can do is emulate Taylor Swift and “Shake it off”.

Any questions, drop me a line: charlesgoddard2020@gmail.com

For a webinar that features this method in detail, click the following: https://tradingmadeeasy.gr8.com/

TTFN,

Charles

Double Up ETFs!

December 15th, 2020

Given that there will be a shift in direction for this blog come the end of the year, I thought I would make sure you had some idea about the ETFs we have been using in this theoretical exercise.

This is not a geek out, I am just giving you some basics.

ETFs are “Exchange Traded Funds”. The big advantage they have over mutual funds is their low management fees. That is because of the low management. Typically they are position based, or represent things such as gold or oil or some segment of the market.

They trade like stocks. This means that for the average person you can have a “stock” that has the diversification of, say, the S&P 500.

You can also have exposure to the main commodities without the need for a futures account. This is handy because most people are trying to improve their retirement accounts. That type of account typically has limitations depending which jurisdiction is in charge of your money.

There can also be a philosophical problem for many regarding “shorting” anything. I have never understood this, but it is a problem for lots of you.

ETFs can solve that for you. One will rise as whatever rises and its inverse will rise as whatever declines.

No, that was not a Jedi mind trick. Let’s take a look using the magic of charts.

S&P 500:

S&P 500

The S&P 500 is an index of arguably the 500 largest companies on the planet. Actually, let’s just take a moment to clarify the difference between the indices and the stock market.

We hear on the newts that the stock market was in free-fall and then you they tell you that the Dow Jones fell by whatever. You need to understand that the Dow is only 30 stocks. Maybe they are the largest companies, but it is NOT the stock market.

Many of my clients were surprised to find out this oft-quoted index was only 30 stocks.

There are agencies out there who assemble these indices: stocks, bonds, currencies and commodities. There are many more, but I think you get the picture.

The S&P 500 is a great representative of the stock market. Many like the diversity of the Russell 2000 or the Wiltshire 5000. I like the S&P because it has stringent requirements to be included. It says something about a company that is listed on an index such as the S&P 500.

It is enough market excitement for most traders/investors, esp. those working on their own accounts without resorting to the risk of individual stocks.

The financial industry is built in such a way that you won’t find many ETFs in the accounts held and being managed for you by professionals or banks. This is because there is no room in the fee structure of ETFs to pay the advisor.

To be fair, they need to make a living. Their advice is worth something. It has been proven – whether you like it or not – that people do far worse on their own than with someone helping them, even taking the fees into account.

I am not saying that if you are motivated that you can’t do better – you absolutely can. But if you think you can go all millennial and just hit a bunch of buttons, you will have your head handed to you at some point or other.

There is some work involved. Not a lot, but some. I seem to have wandered from our topic de jour.

Back to it…

SSO

SSO

The SSO is an ETF I use in this trading exercise to represent the S&P 500 rising.

If you take the time and make the effort to scroll back up to the chart of the S&P 500 – I told you there would be some work – you will see that it almost mimics the S&P exactly.

SDS

SDS

The SDS, on the other hand, does the exact opposite.

This means if the S&P 500 is falling, the SDS will give us a buy signal so that we can benefit from the decline without having to short anything. How good is that?!

This year long exercise has involved 5 market instruments only. The property these particular ETFS have (4 of them, actually) is that they are double up. This means that if the S&P rises by 5 %, the SSO rises by 10%. This also means that if you owned the SDS as the S&P rose your position would decline by 10%.

This is why we control position size and use stops religiously. It is also why we did so well with the decline of oil. That one trade was a major part of the 42% made to date on this portfolio.

It is why I keep banging on about the BIG MOVE and that we just need to probe (not in an X-files kinda way) with controlled trades until the big move presents itself as it surely will, and then beat it like a rented mule.

In the New Year we shall expand our methods and fishing pond as we continue on with this exercise.

I will show you how to scan for trades, use indicators to trigger trades and calculate targets.

You can get a head start by taking a look at my little webinar/class. Click and sign up, a link will be sent to you and you can watch it any old time.

https://tradingmadeeasy.gr8.com/

Any questions above the foregoing or anything at all from your trading/investing world, drop me a line: charlesgoddard2020@gmail.com.

TTFN,

Charles

Weekly Round – Up to December 11th, 2020

There is no book link, but there is a link to a sign up page for a 1 hour webinar/class on basic trading. If you are serious about this endeavour, you need to do this thing…

Click: https://tradingmadeeasy.gr8.com/

To the Round – Up, easily second only to Christmas for excitement.

Our $100,000 starting portfolio now sits at: $142,130.90

This theoretical exercise will continue until this confounded year has stopped breathing and then there will be some changes around here. We shall continue this exercise, but with expanded methods.

The first phase of my course is ready to go (get started with the sign up above), the Private Facebook Group is also set. A forum for people enrolled or involved with the Alpha and Omega in a monetary way can ask questions, AND have them answered.

For you curmudgeons out there for whom every pound/dollar/euro is a prisoner, you will still be able to read the questions and answers, but like Marley you won’t be able to interfere, though you could have (and still can).

To the Round-Up…

We had three open positions as the weekend arrived at our door, so let’s take a look at those charts first.

S&P 500: SSO = UP, SDS = DOWN

SSO

We got into this trade about 10 trading days ago per our process. We immediately set a trailing stop to protect ourselves. The stop follows the price up and, in this case, is anchored by the highest price you can see on the right hand side of the chart.

If the price falls back and touches our stop, shown by the red line, at $84.29, we are automatically taken out of this trade.

Gold: UGL = UP, GLL = DOWN

GLL

GLL is the stock market proxy we use for gold declining. As it goes down GLL rises. We got into this position around seven trading days ago.

You can see that the high has anchored our trailing stop at $31.51. If this price is touched we are out automatically.

You can scroll down to previous posts if you wish to see the process demonstrated that got us into these trades.

Dollar Index: UUP = UP, UDN = DOWN

UDN

UDN represents the U.S. Dollar declining against a basket of global currencies, by rising. We have also been in this trade for about seven trading days. A high at $21.66 and a stop set at the time of the trade .25 under the trade price means our stop out is at $21.41.

This, coincidentally, is the trade price. This also means that should the price decline and we get stopped out, it is at breakeven.

When we are at breakeven with a trade in this manner, where we are out of the danger zone, it is also known as, “Happy Days are here again!” Honestly, it is a thing.

Oil: UCO = UP, SCO = DOWN

UCO

UCO is our, “oil is rising” proxy. The problem with oil, while it has made some gains in the futures, there hasn’t been a trade per our process in quite some time. You can see that the moving averages are all lined up politely, but the resistance level (black horizontal line) is still an impediment.

We need a CLOSE above that line to spring panther-like into action. You will note that I used capital letters for CLOSE. It is important that it is a close and not a cross, and scurry back)

20 year Treasuries: UBT = UP, TBT = DOWN

TBT

This TBT, it represents 20 year treasuries declining. You can see on the right hand side of the chart that our moving averages had done their job per our process, but once again the resistance line prevented a completion of our trade.

We were tantalisingly close as we did get a CLOSE above resistance and that caused us to place a stop-buy just above the brave little candle that had stuck its head above the line and held it there.

The price immediately fell back. This why our process is shaped the way it is. We take precautions around support and resistance levels and try not to get too silly about it.

You can see how the price did as the Japanese Candle Traders term it, “fell off a wall”.

I really dislike the no-man’s zone that can be created by a resistance or support level. The price can bounce around in there for a long time. If that zone was big enough it could be traded at the top and bottom.

We shall look at doing that as the New Year opens and we expand the trading methods we use for this exercise.

That’s about it for me. Please click this link and sign up, you will receive a link to the class that you can watch at any time.

https://tradingmadeeasy.gr8.com/

It is time to get serious!

If you have, ever have, any questions about the foregoing or anything in your trading world, please drop me a line:

charlesgoddard2020@gmail.com

TTFN,

Charles

Weekly Round – Up to December 4th, 2020

I need to amend the Legend above. There will not be a link to a book and video package, instead it is a link to a sign up for a webinar that goes through the trading method used here in detail.

https://tradingmadeeasy.gr8.com/

Let’s get to the reason we are here at the moment: The Round – Up.

It is that most excellent time of the week when we look at all five instruments we follow for this trading exercise.

I cannot believe I have been at this for almost a year. I shall be continuing in the New Year, but as me. I will use trading methods I enjoy and instruments that I also like.

Let’s finish the task before us…

The portfolio currently sits at: $142,130.90

We have at this moment three open trades, so let’s start with those.

S&P 500: SSO = UP, SDS = DOWN

SSO

The SSO is our stock market proxy for the S&P 500. You can see that the moving averages did their job on the right hand side of the chart. A CLOSE took place above the resistance level and following that a stop-buy was placed just above the high of the candle that did the closing. Details of the trade were posted here in the last week of November. You can see the details by scrolling down.

The trailing stop was set at $4.56 below the trade price and has followed the price up. Each new high set by the price has anchored the stop a little bit higher.

The trade is almost risk free: the stop is almost at the buy-in level.

Gold: UGL = UP, GLL = DOWN

GLL

Gll is our stock market proxy for gold that rises as gold declines. Are we expressing our opinion about gold with this trade? Absolutely not! We take all signals based on our method.

You can see how our method got us into the trade with our trailing stop $4.63 under the trade price.

The high you see has anchored the stop out at $31.81. If the price touches this level, we are stopped out automatically.

Dollar Index: UUP = UP, UDN = DOWN

We had reported that a pending trade was set up, that we were just waiting for the final conditions of the method to be fulfilled.

UDN

This trade has been triggered. You can see that all conditions were met on the right hand side of the chart.

We had not yet reported the details. We shall do that now.

10% of the portfolio = $14,000; 2% = $2,800

$14,000/$21.41 = 653.90, rounded to 650 shares

Stop = .25 X 650 shares = $162.50 (<$2,800).

Oil: UCO = UP, SCO = DOWN

UCO

UCO represents that slippery customer oil on the stock market for us. We have no trade here as you can see. It has been consolidating for some time now. Does it return to its former glory or remain wallowing in ignominy? We don’t know and don’t really give a toss. If we get a signal on the rising of oil or on the decline of oil, we shall respond with a trade per our process.

20 year Treasuries: UBT = UP, TBT = DOWN

TBT

TBT is the short end of the stick. If 20 year treasuries decline TBT rises. You can see on the right hand side that the moving averages have done their job and a brave little candle has CLOSED above resistance. We shall now put in a stop-buy just above that level. If the market touches that price we will have a trade and will report all details here.

That is a wrap for the week. If there are any trades during the week, we shall post details here. If not, we will be back next week for the Round – Up.

There maybe some information posts during this week. Starting the New Year may not see the same symbols being used. I want those of you who will continue using them to understand how they work a bit better.

As mentioned, click: https://tradingmadeeasy.gr8.com/

To sign up for and then receive a webinar link that may fill in some info for you.

In the meantime, if you have any questions, please drop me a line: charlesgoddard2020@gmail.com.

TTFN,

Charles

Trade Update

December 2nd, 2020

We had established in a previous post that the symbol UDN – our stock market proxy for the Dollar Index – needed just one more hurdle to jump and we would be into a trade.

Let’s start with a chart.

UDN

You can see on the right hand side of the chart that the moving averages have done their jobs: blue EMA (21) is above the green EMA (55) confirming that our uptrend set-up is in place; the trigger, the red EMA (8) and the price have closed above the blue EMA.

We should be all set to go. Our only impediment is a level of resistance marked by a black horizontal line. In order to vanquish this foe we needed a CLOSE above it.

You can see that took place just to the left of the large red candle.

The stop-buy was placed just above the green candle that did all the hard work closing above resistance at $21.41

Once the price touched that level we were triggered into a trade. A stop was then placed just under support at $21.16.

As a trailing stop, it is .25 below the purchase price and will stay with the price as it moves up. If the price, however, should fall immediately, the stop would stand still at $21.16.

And should the price immediately drop and touch that price, we would be stopped out, no ifs or buts.

Details:

10% of the portfolio = $14,000; 2% = $2,800

$14,000/$21.41 = 653.90, rounded to 650 shares

Risk = .25 X 650 = $162.50 (<$2,800)

All our process parameters have been met. We can only wish our trade, “god speed” at this point.

If you have any questions regarding the above, please drop me a line at: charlesgoddard2020@gmail.com

Just a reminder, I have a Masterclass that can be viewed for FREE going over this material.

Sign up here: https://tradingmadeeasy.gr8.com/ and a link to the class will be with you within 24 hours. You can then watch at your leisure.

How good is that? You are most welcome!

TTFN,

Charles

Weekly Round-Up to November 27th, 2020

The Weekly Round-Up…is there anything more exciting?!

I don’t think so, let’s get started.

There is a legend at the top that explains the bulk of what goes on here.

This week we have a couple of trades to confirm and provide details of at least one of them.

Gold: UGL = UP, GLL = DOWN

GLL

If you would cast your peepers to the right hand side of the chart above can see our process has been met.

1 – blue EMA (21) is above the green EMA (55) confirming our set up: the trend; it is UP.

2 – The trigger: the red EMA (8) and/or the price has CROSSED above the blue EMA to confirm we are a go.

3 – We now look to the left for a higher price than the trigger price. It usually represents resistance, which usually means a bit of a roadblock to our trade. That resistance is shown by a black horizontal line at $33.50.

(my book examines why resistance and support are so important as we place our trades)

We need a CLOSE above that line, which we get.

4 – Our stop-buy is placed just above the candle that closed above resistance at $35.15.

5 – That price is passed and consequently we are triggered into the trade, at which time a stop-sell is placed at $30.52 (red horizontal line).

6 – Details: 10% of the portfolio is $14,000; 2% is $2,800

$14,000/$35.15 = 398.29, rounded to 400 shares

Trailing stop starts at: $30.52

Risk = $35.15 – $30.52 = $4.63 X 400 shares = $1,852 (<2%)

All systems are a go. We wish our little trade “god speed”.

S&P 500: SSO = UP, SDS = DOWN

SSO

SSO is our stock market proxy for the S&P 500 rising. A trade was triggered per our process and the details revealed here.

Just to update you. The high to the right hand side of $86.17 has anchored the trailing stop at $81.61. Should the price fall back and touch this level, we will be stopped out automatically.

Oil: UCO = UP, SCO = DOWN

UCO

Not much to report here. Oil has been in a cage fight for a while for a number of reasons we don’t give a toss about.

UCO represents the rise in oil on the stock market. If we get set – up and trigger, we shall enter a trade without giving it a second thought.

Dollar Index: UUP = UP, UDN = DOWN

UDN

UDN represents the weakening of the U.S. Dollar against a basket of global currencies.

As you can see all of our process steps have been met.

A stop-buy is in as we speak just above the top of the candle that closed above resistance at $ 21.41. If the price rises above this level we shall be triggered in. A stop-sell will be placed at $21.16 to protect our rear ends. It will be a tailing stop because these are volatile times.

20 Year treasuries: UBT = UP, TBT = DOWN

TBT

Not much to see here either, we can move along.

As discussed before we examine both sides of the market instrument. The UP and the DOWN. We use the down proxy because many of you do not have accounts that can cope with the short side of the market. We can benefit from something declining by going long in our proxy.

That’s it for me. Any questions, please drop me a line at: charlesgoddard2020@gmail.com.

If you are interested take a look at my training webinar. You can sign up at:

https://tradingmadeeasy.gr8.com/

TTFN,

Charles

Update to November 26th, 2020

This post is to update a trade and while we are at it taking a look at one that is pending.

Let’s take a look at the trade that triggered. First the chart and then the details.

SSO is our ETF stock market proxy for the UP side of the S&P 500

SSO

First of all, a quick review of the process. We have the blue EMA (21) is above the green EMA (55), Uptrend = Set up.

Next the trigger: the price and or the red EMA (8). Based on those things we are set to go. Next step is to look left for levels that are higher since they represent resistance.

There are choices. Resistance at $81.97 or $83.66. I am a cautious fellow, so I am going with the higher level. I need a CLOSE above $81.97. This occurs in the yellow box. At that time I put in a stop-buy just above the high at $85.63.

The trade trigger occurs just to the right.

The trailing – stop is $81.07, just under support.

Details:

$142,200/10% = $14,220/$85.63 = 166.06 rounded to 165 shares

Risk = 165 X $4.56 ($85.63-$81.07) = $752.40 (<$2,844 ($142,200 x 2%).

All our process parameters were met, so the trade is a go.

We will now leave this trade alone until it is stopped out.

We have a pending trade in GLL, our stock market proxy for the downside of gold.

GLL

As you look at the right hand side of the chart above, you can see that the moving averages have done their work admirably: identifying the trend and then triggering. The only pause is caused by a level of resistance as represented by a horizontal black line at $33.50.

The high of the lonely candle is at $34.90. The stop- buy is at $85.63.

If the market moves through that level, we will be triggered in automatically.

Any questions, drop me a line: charlesgoddard2020@gmail.com.

TTFN,

Charles

Market Close November 23rd, 2020

Here we are at last: all that silliness behind us, perhaps we can get back to work.

First up is a trade update. As you may remember we had an open trade in TBT during that pesky election thingy.

Well, no more, sadly we were stopped out.

Here’s how it ended.

The high in TBT got to $17.26. Our trailing stop was $1.13 under the purchase price which means the high anchored the stop at $16.13.

$16.47 (purchase price) – $16.13 (stop out price) = .34 X 850 shares = ($289) Loss.

So our updated portfolio now stands at: $142,130.90

We are now back into our regular routine. If any trades occur, they will be updated here, followed by the weekend round-up when we look at all of our charts – all five of them!

In the meantime if you are looking for some excitement you can take a look at my Trading and Investing Masterclass. Go here to register your email and the link will be sent to you. You can view it any old time you please.

https://tradingmadeeasy.gr8.com/

Any questions about anything at all from your investing world, please drop me a line: charlesgoddard2020@gmail.com.

TTFN,

Charles

Random Brilliant Comments about the Experts and the Markets…

November 17th, 2020

When last we spoke I mentioned that I would have some wise words with respect to the prognostications of experts and headlines in general as they relate to trading.

There have been views – maybe countless – as to which winner of the interminable U.S. election will have what effect on the markets. Honestly, if you are an investor or trader, you shouldn’t care.

One of the arrows in the quiver of a consistent trader ( and I include investors who believe themselves to be different and superior because they are taking a longer view) is process.

It is at times like this that it becomes your saving grace, your anchor. Process keeps you on the straight and narrow. It stops you from doing things that “feels right” at the time.

I can tell you that even the most seasoned trader who should have learned his lesson will still wander into the quagmire of doing something that later he will beat himself up for: indulging his emotions.

Experts have views on the price of this or that because they are experts. When someone asks them where they think the price of gold is going they better have an opinion if they want to retain the title of “expert”.

I learned a bit about experts a number of years ago when an expert expressed a view as to why the price of oil had fallen that day. The very next day he was asked why he thought oil had risen on that day, he expressed the same reason.

The real reason, as a trader, you should not be paying any attention to experts or headlines is that you have no idea how much of that information has already been priced into whatever.

The market is a giant, living, breathing thing (don’t worry, it is not under your bed). It takes information and assimilates it based on all the emotions you can think of and expresses its view in the price – the final arbiter.

Don’t look to logic to help you. It has no place in the markets; no place in trading.

Headline: “Gold is going to $3,000”. What are you going to with that information? Go out and buy gold toute de suite (that’s French for toute de suite). Think of the average person who did so. They are not as lucky as you and are following a process. They see gold doing this or that and don’t whether to stay or go because they got in without reason that made any sense.

Don’t be that trader or investor.

If you want help with your process, drop me a line: charlesgoddard2020@gmail.com.

TTFN,

Charles