At the close of the market on Tuesday (18th), there was no change in our positions. Based on our simple moving average system, S&P, Bitcoin, Gold, and EUR/USD remained in an uptrend. Oil remains in a downtrend.
Again, based on our simple system, there are no triggers at this time. Our only open trade – long the S&P 500 – remains in place with a trailing stop.
Our five symbols carry on in their trends: S&P 500, Bitcoin, Gold, Oil and USD/EUR. They are all in an uptrend per our simple definition of trend, the one exception is oil which continues in a down trend. We have one open trade: S&P 500. It continues to be profitable. As mentioned there is a trailing stop. Once we are stopped out, I will dissect the trade and update the portfolio.
The charts below are in the trends as follows based on the positioning of the blue 21 day moving average and the brown 55 day moving average.
Bitcoin, the S&P 500 and Gold are all in an uptrend, Oil is the only one in a down trend.
See previous post for the charts.
February 4th, 2020
As mentioned we are looking first at trend. In this case because the blue EMA (21) is above the brown EMA (55), we will assume we are in an uptrend. We will be going through other ways of determining trend in my training course. You will also learn how to apply a filter to your analysis as an double check.
But, for now, the chart above. The red EMA (8) has crossed above the blue EMA (21) and since we are in an uptrend, this causes us to put in a buy order just above the candle the closed with the above conditions.
Our next task then was to put in a protective stop. You can see a level of support at the red horizontal line. If the price crosses this line, in other words support is broken, we want out of this trade.
I will note the exact details here in my next entry.
February 10th, 2020
There are no changes to report today. The S&P 500, Oil, Gold and Bitcoin continue in their trends.
The S & P 500 trade is still open. When it was placed, it included a trailing stop which I think is the best kind for any beginners out there.
I would also suggest that those of you who trade now, but are inconsistent, use them. If this trade is stopped out, I will expand on the trailing stop and why I placed it where I did.
February 11th, 2020
No changes to our position. The S&P 500 trade is still open and doing well.
Once I am stopped out by way of my trailing stop, I will provide a more detailed explanation of trailing stops.
In the meantime I can clarify position size. I always start with a 10% of the portfolio with my stop set that if the price goes against me, I will be out with an overall maximum loss of 2% of the whole portfolio. More to come on this.
February 13th, 2020
Nothing much to report. Our open trade – long the S&P 500 – is still doing nicely. The only change is that I have added a currency pair USD/EUR to our list of symbols. As soon as a trade triggers on this symbol, I will show you a chart and explain how a currency pair works.
I have created 5 training modules that I would be most happy to sell to you. The problem is whether this is the right course for you, and am I the right guide as we set out into the stock market jungle.
Also, as I looked around I found that you have many choices to be your guide. I felt the need to differentiate myself. This particular blog has one purpose only: as of February 3rd, 2020, I will trade a theoretical portfolio using one basic method that I teach in the training modules. THIS IS NOT TO BE CONSTRUED AS TRADING ADVICE, IT IS TEACHING METHODS ONLY.
I will start with a theoretical $100,000 and trade only four things: S&P 500, Gold, Oil, and Bitcoin. This gives us a bit of variety and demonstrates that you, yes YOU can use the methods and basic tools I teach to trade anything.
At anytime you can drop me a line at: Charles@bluestonetrading.school if you have a question. I would also be most appreciative for any criticisms and/or complaints.
Scroll to this point; the most recent entries start here:
February 15th, 2020
It is time for the weekly wrap-up. First one, actually. I will put up each of the charts I am following and repeat – briefly – the method I am using to trade a theoretical portfolio.
First a recap. The method is a moving crossover system. I use three EMAs: 8, (red) 21,(blue) 55 (brown). We start by establishing the trend. Is the blue above or below the brown? In the chart above, we can see an uptrend. We are now waiting for a trade signal: I want the red to come below the blue and cross back above to trigger a trade. I will go through each trade in a little more detail as they occur. Also, a bit of explanation re: the currency pair and how they work.
You can find this and more by clicking on my preamble. You can get my book and a couple of videos before buying anything.
The chart above of the S&P 500 shows our current trade. You can see the blue EMA is above the brown indicating an uptrend. We bought in just above the candle as the close caused the red EMA to cross above the blue EMA. I looked for recent support and placed my protective stop. To keep things simple and basic I used a trailing stop. The trade is doing quite well. It is the only one triggered since I started this project in early February. I want to also demonstrate that patience is a virtue when it comes to trading. When I am stopped out, I will provide a complete breakdown of the ins and outs of the trade. If we get a chance to pyramid, I will also explain what that is as we are always on the lookout to ride the “big move”.
The chart above is of Bitcoin. We can see that it is in an uptrend. We are waiting for the crossover that will cause us to act. From my description above, you should be able to see the opportunity that occurred had we been trading this earlier.
The chart of Gold above also shows an uptrend. Once again we are happy with the set up – just need a trigger.
The chart above of Oil shows a downtrend. Can you see it. Try to spot why before I tell you.
The blue EMA is below the brown EMA. We are waiting for some kind of trigger for this chart as well to match the trend. As I have mentioned there are other ways to determine trend. They are covered in my course.
The moving averages are wonderful tools. They come in a number of forms. The simple is the one used the most often. The only drawback is that it lags the market. In the charts above I have used the exponential moving average. It is calculated along the same lines as its simple brother (we all have a simple brother). The difference is it gives more weight to recent prices in the math.
February 6th, 2020
Based on our simple trade method, a trade in the S&P 500 was triggered.
I had placed a stop just under resistance and made it a trailing stop. The assorted stops are covered in my books and my course. I will have a link to the first book so that you can receive Book I free of charge.
Why did I use a trailing stop instead of a static stop?
It is because the market place feels quite volatile an jittery. I don’t particularly like language like “feels like” when discussing trades, but in this case it is within my process.
As detailed in my Book and course I am interested in the big move. To that end I make probing trades. The net result, typically, is you get a few winners and a few losers. Then several times a year you are on the back of a juicy winner. The way we convert from a small trade to a much larger trade without taking on any more risk is detailed in the Book and the course.
February 3rd, 2020
Starting today I am trading four items: S&P 500, Gold, Oil and Bitcoin.
We will start with a theoretical portfolio of $100,000. Please note the point of this exercise is to show those who are new and those who are struggling with their trading how I can help them learn/improve.
This chart (above) is of Bitcoin
The chart (above) is of Gold
The chart (above) is of the S&P 500
The chart (above) is of Oil
This is what we are looking for. The set up of the charts above are quite simple. It is the set up I use all the time.
We have three moving averages. As you know, moving averages smooth out the price, making it a little easier to work with.
The Moving Averages in the charts above are as follows:
8 day EMA (exponential moving average) Red
21 day EMA Blue
55 day EMA Brown
Our first consideration is that of the trend. We want to go along with the trend as much as possible. Always at the start of a trade.
There are a number of ways to identify the trend which is going to be up – down – sideways. I teach others in my training.
We are going to use a very simple method for the purposes of this demonstration. When the 21 EMA is above the 55 EMA, we will consider the trend to be UP. When it is below the 55 EMA, we will consider the trend to be DOWN.
Our trades will be instigated by the 8 day moving average crossing the 21 day moving average. So if the red line crosses above the blue line we have what is called a long trade – we will profit if the price of the entity we are trading goes up. But since we only want to go with the trend, the blue line needs to be above the brown when the red crosses the blue for us to act.
Your homework is to identify the trend – up or down – of each chart for tomorrow.