Market Close August 11th, 2020

This blog is a theoretical trading exercise that started in my mammoth best seller: Basic Trading: ‘ A Beginner’s Guide to Trading and Investing…PROFITABLY!’

Available by clicking here: https://abeginnersguidetotradingandinvesting.gr8.com/offer_page.html

And has been continued on this page.

I only report trades during the week: whether we are buying or selling, position size, stops, profit or loss and revised portfolio balance.

We have one today as we were stopped out of our gold position. The other three open positions all took a hit, but none of them enough to stop us out.

Let’s look at the chart…

UGL

UGL is the stock market proxy for gold (UP). We were triggered into our trade at the yellow box: $65.37. At the time we placed a trailing-stop just under support at $8.48 under the trade price.

A trailing stop follows the price up like a faithful Sherpa. If the price falls back, the stop is anchored in place, as in the case of UGL at $8.48 under the highest price achieved after purchase.

The highest price was $83.85 – stop of $8.48 = stop out at $75.37. I am no Jethro, but when I finished ciphering I reckoned the profit equalled exactly $10 profit for each of the 200 shares we purchased which equals a total profit on this trade of $2,000.

Our portfolio which started January 1st, 2020 at $100,000 now stands at: $140,720.10.

Our next step is to wait and see what happens. If UGL turns and crosses back across the blue EMA (21), we would look to get back in again. Our problem is overhead supply. This is created by the folks that bought on the way up and are currently holding losing positions.

They will want to get out as the price reaches (if) their buy-in price. This is called resistance. We would want that selling pressure to dissipate before we buy again. That price would be somewhere around $83.

That does it for now. Drop me a line if you have any questions about the foregoing, or the trading world at all.

TTFN,

Charles

Weekly Round UP to August 7th, 2020

Well, here we are again my fine feathered friends, the Weekly Round Up…Welcome!

As you both know, this blog is a continuation of a theoretical trading exercise started in my mammoth best-seller: Basic Trading: ‘ A Beginner’s Guide to Trading and Investing…PROFITABLY!’

Available here with a series of videos:

https://abeginnersguidetotradingandinvesting.gr8.com/offer_page.html

The portfolio started at $100,000 and traded only five instruments using proxies in the stock market. We employ a very simple moving average cross over system, but adhere strictly to our process. We live in a world of trades as opposed to a trading world.

At the time of writing, the portfolio stands at $138,720.10. A nice return, so far, but as I say repeatedly, we could be still at that level at the end of the year when this blog will cease. The markets move in spurts. We could easily have seen the lot for us for this year. If so, fine. We will not chase anything to make stuff happen, that way lies doom (I may also stop watching Lord of the Rings).

We usually only update this blog when a trade has taken place.

At this time of the week, though, we take a look at all the charts, regardless.

Let’s get started and certain things will be ‘splained as we go along.

S&P 500: SSO = UP, SDS = DOWN. These are two of the ETFs I mentioned. They can be obtained in any account. There is no need to short anything. If you get a signal that the S&P 500 is going to decline, you buy SDS, which will rise like the Dark Knight as the S&P declines.

To the chart, Robin…

SSO

You can see from the chart that our EMAs (exponential moving averages) did their work well. The blue (21) was above the green (55) indicating an uptrend – per our rudimentary system. To trade with the trend, which is almost always the best course of action, we need the red EMA (8) or the price to cross above the blue EMA (21) to enter a trade. We were delayed a little because there was a level of resistance, as represented by the black horizontal line. Once we had a close above that level, we placed a stop-buy just above the high of the brave little candle that did the closing. The market then moved past our stop-buy which changed it to a market buy order and we are in.

A trailing stop (protective) was placed just under support, $8.74 under the trade price.

The latest high is $146.75. If we subtract $8.74 from that number we get $138.01. Our purchase price was $140.56. The trailing stop has already eaten up some of our risk.

Gold: UGL = UP, GLL = DOWN

UGL

It is almost the same scenario. Yep, deja vu all over again. A level of resistance needed to be conquered and it was, a stop-buy was placed just above that close and the yellow box shows you where this trade was triggered.

We bought at: $65.37. The trailing stop was placed $8.48 below the trade price. The latest high was $83.85. This means our worse case on this one if the price collapses is to be stopped out at $75.37. Which at this point is exactly $10.00 per share profit.

Oil: UCO = UP, SCO = DOWN

UCO

Oil has closed above our resistance zone. We have a stop- buy in place at $34.83. If the price for UCO rises above that level, the stop-buy will become a market buy order and we shall be in.

If that happens, details will appear here: position size, stop placement, etc.

20 Year Treasuries: UBT = UP, TBT = DOWN

UBT

The same scenario played out here. We purchased at $135.89. The trailing stop was placed just under support at $16.04 below the trade price. The latest high was $147.30, meaning our stop is anchored at, $131.26. We still have a little risk in this one.

Dollar Index: UUP = UP, UDN = DOWN

UDN

This is getting repetitive, but same thing again. We entered this trade at $20.67 with a stop placed .51 below the trade price. The latest high for this symbol was: $21.24. So, $21.24 – .51 = $20.73. Since we purchased at $20.67, if there was a total collapse of this stock we would be stopped out with a bit of a profit.

Our conclusion for today is that we find ourselves with open trades in four of the five major sectors we cover and a pending trade for the fifth (oil).

If you have any questions about the above or the investing world at all, please drop me a line: charlesgoddard2020@gmail .com.

TTFN,

Charles

Market Close August 6th, 2020

We added a new trade yesterday. That gives us 4 open trades of the five instruments we follow. Oil has also closed above resistance meaning if the price rises above $34.72 (UCO = UP for oil) we will be triggered in.

Before we look at the chart and details for the latest trade to trigger, I want to mention that it may seem unusual to have so many symbols active since there are different economic forces that act on each one. This has occurred because some of our symbols represent the underlying instruments declining.

If all the underlying instruments were going up, we would have to wonder.

Let’s take a look at our newest…

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

SSO

If you remember from the Round up, I mentioned that the price of SSO needed to rise above $140.56 to trigger a trade. This was because there had been a close above a resistance level.

Here are the details of our trade:

$28000 (20% of portfolio)= 199.2, rounded to 200 shares.

Trailing stop is placed at $136.01, which translates to the following risk:

200 shares X $8.74 (140.56-136.01) = $1,748 (< $2,800)

Godspeed, Little Trade…

While we are here, let’s have an update on the open trades:

UGL: stop $8.48 New high $83.85 Trade is RISK FREE

UDN stop $.51 New high $21.24 Trade is RISK FREE

UBT stop $16.04 New high $ 147.30 Trade still in danger zone

As a reminder, the reason trades are risk free is due to the trailing stops following the price up as it climbed. When the price stops climbing, and maybe declines a little, the stop is anchored in place. Risk free means that if the price were to suddenly collapse, there would be no loss, and a little to a lot of profit.

The other question you probably have is why are the position sizes 20% of the portfolio, when we started the rule was 10%. The reason is that we are using trailing stops due to the volatility. Having said that, we are staying with 2% maximum risk per trade.

I think that does it for now. Next instalment will be the weekly round-up. Try to contain yourself.

If you have any questions or concerns, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

Weekly Round up to July 31st, 2020

Wow, it looks like we made it from one Round up to another without anything in between: no new trades, the three under way continue to trundle along.

Obligatory introduction. Briefer than usual because it turns out this is not a time of reading.

I started a theoretical trading exercise in my book: Basic Trading: ‘A Beginner’s Guide to Trading and Investing…PROFITABLY!’

Get it here with some videos and a couple of freebies:

https://abeginnersguidetotradingandinvesting.gr8.com/offer_page.html

You are most welcome!

We started with a portfolio of $100,000, a simple method and process and five market instruments.

It occurred to me that just maybe, there may be some use in continuing the exercise so that one and all can see that the trades were not cherry picked in the book. We follow our process. It is key, otherwise we might as well be in the trading world instead of the world of trades.

It started January 1st, 2020 and continued until April 30th, 2020 when the book went up on Amazon. It shall continue until 2020 expires.

The portfolio at this time stands at: $138,720.10

We could look at this and pat ourselves on the back and extrapolate the gains to the end of the year.

That would be foolish. The current balance could easily be the same one at the end of the year. The market does not move in nice averages the way it is portrayed in the tables. It moves in spurts.

Regardless, we shall not force things, if this is our lot – so be it. We let the market come to us. Patience is a big part of trading.

Our five instruments are: S&P 500, Gold, Oil, 20 year treasuries, Dollar Index. These things in their raw form are typically not allowed in certain accounts, especially if we are shorting.

To solve this we use ETFs (exchange traded funds) as proxies. You will see as we go how they work. Since we have covered a large section of the market with our symbols, you could easily use this structure indefinitely, which is kind of the point of the book.

Enough jawing, let’s start…

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

Yep, you heard. SSO mimics the market going up, and SDS – wait for it – rises like the Dark Knight when the market goes down. You don’t have to short anything and these symbols are eligible in any type of account – how good is that?

SSO

The moving averages: 8 EMA red, 21 EMA blue, 55 EMA green decide our trades for us. We are the weakest links in the trading process, especially if we are allowed to make any decisions.

Our process does it for us. It is objective. We take every trade our process kicks out for us as we review our symbols every day, after market close. If we don’t take EVERY trade, we just became subjective. We might as well get the monkey and his dartboard back.

The blue and the green determine the trend. Blue above green = uptrend, and the opposite = downtrend. We always go with the trend.

The chart above shows us uptrend. Now we look to our trigger: the price, and or, the red EMA. EMA, by the way, is exponential moving average. We need them to cross above the blue line to trigger a trade.

We should have been good to go, but a level of resistance got in our way. In this case we need a CLOSE above that horizontal black line. Once we get that, we will place a stop-buy just above the high of the candle that did the closing. We place a lot of importance on closing. Just crossing above and then back below does not cut it for us.

That has happened. We have a stop-buy placed at $140.56, the red horizontal line in the chart. If the price rises to that level, we will be triggered in. At the same time a trailing stop will be placed. All details are reported here on these fearless pages.

Gold: UGL = UP, GLL = DOWN

UGL

We have had an open trade in UGL for a little while now. You can see how the moving averages did their job. You can also see a level of resistance on this chart as well. We got a close above that level and then at the yellow box we were triggered in at $65.37.

We placed our trailing stop just below support which was $8.48 under the purchase price. Our most recent high is $77.35. The trailing stop has followed the price up, remaining at a respectful $8.48 behind. $77.35 – $8.48 = $68.87. This is above our trade price of $65.37. Translation: even if the price collapses, we have made a modest profit…we are risk free. It is a beautiful thing!

Oil: UCO = UP, SCO = DOWN

UCO

Oil has been a slippery crittur for some time now. Most of our portfolio gains were made on the short side of this pair (SCO). You can see a zone of resistance on the chart created by what is called a “falling window” in the Japanese candle world. If we get a CLOSE above the zone, we will place a stop-buy just above the brave little candle that did the closing.

In the meantime, we sit on our hands. Just your own hands, ok, anything else would be weird.

20 Year Treasuries: UBT = UP, TBT = DOWN

UBT

UBT is another open trade. You can see its unfolding in the chart above. We got in on a close above resistance at $135.89. The trailing stop was placed just under support at $16.04 behind the trade price. The most recent high of $145.60 has anchored our trailing stop at $129.56. We still have a little risk in this one. We are always on pins and needles until we become risk free.

Once we are risk free, we can look to pyramid, or add to our position. We will discuss this when and if it occurs.

Adding to our position becomes a possibility in any symbol once the initial trade is risk free.

Dollar Index: UUP = UP, UDN = DOWN

UDN

Also an open trade. This is a slightly different cat. UP means the U.S. dollar is gaining strength against a basket of global currencies; UDN means the opposite.

You can see once again the moving averages carrying out their job and alerting us to a trade. Once more a level of resistance needed to be vanquished. It was and we put in a stop-buy at $20.67, just above the candle that CLOSED above the evil line.

Our trailing stop was placed .51 cents below the trade price, which was just below support.

The most recent high was $21.16. Therefore, our stop out level is $20.65. We still have 2 cents of risk in this trade. We are almost at the promised land. On Friday we had quite a strong down candle. We shall see where that takes us.

That is all the newts from me this week. If you have any questions or concerns, please drop me a line: charlesgoddard2020@gmail.com. This could be anything in the investment world whatsoever. If I don’t know the answer, I will make one up (winking emoji).

TTFN,

Charles

Weekly Round Up to July 24th, 2020

Welcome to this week’s Round Up. It is the time of the week that we review the charts for the five instruments we are following and trading.

I also like to reset what we are doing here. It all started with a gem of a book by me that details all that is needed to take control of some or all of your money – a worthy goal if ever there was one!

Anyway, in that book I set out to prove a point and to teach something, of course. We took a theoretical amount of $100,000 and using 5 market instruments and a simple method that anyone can understand and operate, set sail.

That exercise took us to April 30th, 2020 when the book went up on Amazon. But I had a brilliant idea (it happens!). I thought maybe it would be useful to continue the exercise to help any one working with my book to see trades unfolding.

You can get a look at things here: https://abeginnersguidetotradingandinvesting.gr8.com/offer_page.html

As of writing (as in, today), the portfolio stands at $138,720.10. Not bad, but before we get carried away, this could be the same balance when this exercise and the year expires.

It is one of the lessons you traders need to make sure you understand. We see average returns all the time. Those returns can be had in flashes of strength. Just because we are at this point halfway through the year does not mean we will be double that by year’s end.

We will take what the market gives us by following our process and not forcing things in some misguided attempt to make things happen. Patience is a virtue in a trader.

Our five instruments cover a large swathe of the market place in big picture terms. You can just stay with these forever more – up to you. Their basis lies in the futures market which doesn’t help most of you. Sometimes we need to short something. There are restrictions on certain types of accounts as to what can be held in them.

To solve this we use symbols that trade on the stock market as proxies. That means if we want to short gold, we can buy GLL as a regular stock and it will rise as gold declines – how good is that?

More splainin’ as we go, Lucy…

Let’s take a look at the charts.

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

The two symbols above are directional ETFs. If you have a set up and trigger telling you that the market is about to go down, you can buy SDS long and it will rise as the stock market declines.

SSO

We use a simple method to determine our trades. The coloured lines on the chart are Exponential Moving Averages: 8, 21, 55.

The trend is revealed to us by the relationship between the blue line (21) and the green (55). In the chart above, the blue is above the green, therefore our set up is an uptrend. Our trigger is either the price or the red (8) crossing the blue. In the case of an uptrend we want them to cross above the blue, which we get.

The reason we are not in a trade is because there was a level of resistance just above our trade point. We needed to have a close above that to act. Not just a rise above the line, a CLOSE. It is a very important distinction.

We shall sit on our hands and wait.

Gold: UP = UGL, GLL = DOWN

UGL

We have an open trade for this symbol which represents the rise of gold.

Take a good look at the chart. You can see we again had a pesky level of resistance to deal with, but we had our CLOSE above it. We then placed a STOP-BUY just above the high of the closing-above candle.

We were triggered in. We placed a trailing stop just below support $8.44 below the trade entry point.

The high on Friday of $72.39 has anchored our stop-loss at $63.95. If the price continues to rise, so will the trailing stop.

This trade, as with the others in this round-up, were entered as events unfolded. You can scroll down to previous editions of this blog to verify if you wish. This is not a case of looking back and cherry picking trades. We are taking everything our process kicks out. This is an objective process that has taken us out of the decision making. As soon as you start deciding whether or not to take trades, you are now in the subjective trading world. If you want success, you take ALL trades and remain with us in the world of trades.

Oil: UCO = UP, SCO = DOWN

UCO

Oil has been struggling to break out of a basing pattern. We need it to close above the zone of resistance you can see on the chart.

If that happens we may be in even though the blue is below the green. We have an exceptional case card we can play. As with all trades, they are detailed here if triggered. Including position size stop, risk level, etc.

This is another sit on your hands instrument.

20 year treasuries: UBT = UP, TBT = DOWN

UBT

This is another open trade. You can see in the chart all the components: 21 EMA (blue) above the 55 EMA (green) and the 8 EMA (red) has crossed above the blue to trigger our trade. You can see the level of resistance that existed for a previous trade that was stopped out after a mysterious price movement. It is why we use STOPS for ALL our trades – without fail!

The trailing stop is $16.04 behind the market price. The high Friday of $143.38 anchored the stop at $127.34.

Dollar Index: UDN = DOWN, UUP = UP

The Dollar index is a battle between the U.S. dollar and a basket of global currencies. When the price rises it is because the U.S. dollar is gaining strength against the basket, when it goes down, the opposite.

To the chart, Robin…

UDN

Since this is the down symbol, it means that the U.S. dollar is struggling.

You can see that the moving averages did their work well as did the resistance line. We entered this trade and our sherpa-like trailing stop made base camp .51 behind the trade entry price.

As the price climbed, so did our trailing stop. The high established at $20.88 anchored our stop at $20.37.

In summary, our three open trades are trundling along nicely.

We don’t need our prices to rise much more before the stops are carried above our entry point, which means our trades are risk free. That is a wonderful place to be. Risk free means that if the price falls off of Everest, the worst we can do is break even – always our initial goal.

As it stands the rises in price and the trailing stops have reduced our initial risk amount considerably.

So, once more, all this is described in great detail in my book. Take a look. I have included three videos with the purchase price. The worse you can do is come away with two free books just for taking the time to look.

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

TTFN,

Charles

Market Close July 22nd, 2020

Welcome to a Wednesday – Wodin’s Day – edition of this trading exercise.

As both of you know I only interrupt your watching of Game of Thrones or Breaking Bad if a trade has actually taken place.

At the weekend we look at everything.

As mentioned we were waiting for UDN to close above resistance and then the price to pass by that high.

To the chart, Robin…

Dollar Index: UP = UUP, DOWN = UDN

UDN

As you can see from the chart above, the exponential moving averages have done their jobs admirably.

The resistance level has been CLOSED above by a brave little candle at position 1. We set a stop-buy at $20.67 and waited for our trap to be sprung. And sprung it was…here are the details.

$26,000/$20.67 = 1257.86, rounded to 1200 shares

The stop was placed just under support at $20.16.

$20.67 – $20.16 = .51 X 1200 shares = Risk $612 (<$2,800).

God Speed, little trade…

Any comments, questions, regarding the above or trading in general, drop me a line at: charlesgoddard2020@gmail.com.

TTFN,

Charles

Weekly Round Up to July 17th, 2020

Welcome to the Weekly Round Up!

At this time of the week I like to review the charts for the five symbols we trade and in general reset matters for you pokey puppies who are just getting here.

I have a book out, Basic Trading: “A Beginner’s Guide to Trading and Investing…PROFITABLY!” In that book I began a theoretical exercise trading a portfolio of $100,000 using five market instruments and a simple method. The exercise in the book started January 1st, 2020 and ended April 30th, 2020 when the book went up on Amazon. It then occurred to me that it might be useful for beginning or struggling traders, or, for that matter, financial professionals who wanted to do a better job for their clients, to watch the trades continue to unfold.

This blog is the continuation of that exercise. It is as close to real as I can make it. Since the powers that oversee the financial industry have rules about investment advice, I want to remind everyone that this is a teaching exercise only. It should not be construed as investment advice. This exercise will expire with the year 2020 and we shall see how we do.

At time of writing the portfolio is at $138,920.10. Which is not bad considering we are only half way through the year. As I have said the markets move in spurts. We could easily still be at this level when December 31st, 2020 dawns.

One thing we won’t be doing is try to force things because nothing is happening. We will allow the market to come to us, and accept whatever it gives us according to our process. To do anything else is to invite doom (I should stop watching Lord of the Rings).

Let’s take a look at our charts…

S&P 500: SSO = UP, SDS = DOWN. We use stock market proxies for the underlying futures so that the trade can take place in a retirement account, or an account with restrictions. For example, you can buy SDS long. It will rise if the S&P 500 declines. You don’t need to short anything…how good is that?

SSO

As you will see our five symbols represent the major components of the investment market place.

We use exponential moving averages for our set up and trigger. If the 21 EMA (blue) is above the 55 EMA (green), we call it an uptrend. In this case we only want to go long since we want to increase our chances of success by going with the tide, not swimming against it. The we use the price or the 8 EMA (red) as a trigger. If either CLOSE above the blue line we place a stop-buy just above the high of the candle that closed across the blue line.

All systems should be a go, but we have an impediment. There is resistance at the upper horizontal line. When resistance is that close to the trade, I need the close to be above resistance not just the blue line.

As a trade triggers I detail the position size, risk management, including stop placement.

We are sitting on our hands with respect to SSO at the moment.

Gold: UGL = UP, GLL = DOWN

UGL

You can see on the chart that the resistance line was CLOSED above and that the green candle in the yellow box went by the high of the closing candle and triggered us into the trade. Our stop is a trailing stop that started just below support, $8.44 below the trade price.

We are using trailing stops at this point in time because of the volatility in the marketplace.

When a trade gets stopped out, the details are recorded here and the portfolio balance updated.

This trade is still open.

Oil: SCO = DOWN, UCO = UP

UCO

Oil is an interesting case. The biggest part of our return was on the short side of oil with SCO. As you can see oil has been consolidating, wondering what to do next. We could have bought in based on our rules, but there is a zone of resistance created by what Japanese traders term a “falling window”. Once we get a close above the upper horizontal line we will place a stop-buy for UCO just above the high of the candle that CLOSED above resistance.

An aside here. It is the Roundup and I like to repeat messages at this time. One of the problems that beginners and experienced traders have is that you can have a substantial return on your money from just five good trades a year. The secret is patience: making sure we get all we can from nice trends and getting out quickly from losing positions.

We keep probing (and not in an X-files kinda way), taking small winners and small losers until that nice trending position reveals itself. That’s when we make our returns. It is easy to say, tougher to do. Sticking to our process is paramount!

20 year Treasuries: UBT = UP, TBT = DOWN

UBT

UBT is actually an open trade. You can see the moving averages doing their job and a CLOSE above resistance that caused us to be triggered into this trade. The trailing stop was positioned just below support at $16.94 below the trade price.

Dollar Index: UUP = UP, UDN = DOWN

The Dollar Index is a bit different. It represents a balance or struggle between the U.S. Dollar and a basket of global currencies. When the price rises, because the US dollar is the base in the pair, it means the U.S. dollar is appreciating against the basket. When the price declines, it mean the basket is gaining strength against the U.S. dollar.

UDN

UDN, as you can see from the chart is close to triggering a trade. The moving averages have done their job and we have a close above resistance. A stop-buy has been placed at $20.67. Should the price rise above that level, we would have a brand new trade on our hands. Details will be revealed should that occur.

Well, that is all for this week. I update during the week as trades open or close and then recap everything at the weekend.

I look forward to seeing you again.

If you have any burning questions, please see a doctor, or if they are related to anything you have seen here or, for that matter, anywhere in the investment world, please drop me a line: charlesgoddard2020@gmail.com.

TTFN,

Charles

Market Close July 15th, 2020

To make sure your interest stays jacked up, I limit my comments to actual trades.

I like to accompany these pearls with a chart.

Dollar Index: UDN = DOWN, UUP = UP

The dollar index is actual a struggle between the U.S. Dollar and a weighted basket of select global currencies.

When the price rises it means the U.S. dollar is stronger than the basket. When it declines, the opposite.

Since we use proxies in the stock market so that you can use this strategy in any type of account, UDN represents the price declining. Therefore the basket of currencies is rising against the U.S. Dollar.

Let’s take a look at the chart…

UDN

As you can see the 21 EMA (blue) is above the 55 EMA (green), this our quick and dirty definition of trend which in this case is up.

Set up is for a long trade, the trigger, the 8 EMA (red) or the price itself has closed above the blue line.

We could have gone ahead with the trade, but we had resistance just above at the black horizontal line. I needed a CLOSE above that line to act. Even though it was a down candle, the close was still just above the black line. Our next step is to put a stop-buy just above the high of the candle that did the closing. Our trade is at $20.67. If the price goes above that price we will be triggered in to the trade.

Should that excitement occur, the details of the trade and risk management will be recorded here.

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

TTFN,

Charles

Weekly Roundup to July 10th, 2020

Here we are at the weekend once again, a time when you lucky types get a looksee at all the charts whether there was action or not.

Background: This exercise is a continuation of the trading exercise that was started in my Basic Trading book using only 5 symbols and a simple trading method. This exercise will continue until 2020 expires. The portfolio started at $100,000. It currently sits at $138,720.10. Trading a theoretical portfolio as opposed to real money will of course draw some catcalls as not being realistic. Since I use “stop-buys” and usually indicate here ahead of time, it does not deserve criticism. I would deduct maybe 5% for slippage that can occur in real life just to silence the critics. I will do this at the end of the year.

I go through the trades as they occur to demonstrate our simple system. You can always look at previous dates if you are keen.

Let’s start with the S&P 500: SSO = UP SDS = DOWN

The symbols are ETFs(exchange traded funds) that act as proxies in the stock market. I do this so that everyone, regardless of what kind of account they have, can use them.

We look at the symbol that looks closest to a trade. If the one we look at looks like it is heading down, then we look at its inverse, that way you are always buying long and never shorting. By the same token if the S&P 500 is going down, we get a buy signal in the SDS, we will make money as the S&P goes down – how good is that.

SSO

We have no trade here. You can see that our moving averages are saying, ” what are you waiting for”, I am saying that we are waiting for a CLOSE above the resistance level represented by the black horizontal line. When and if that happens, we shall spring panther-like into action.

Gold: UGL = UP, GLL = DOWN

UGL

We do have an open position in UGL. You can see where we had a close above resistance and then we placed a stop-buy just above the high of the candle that did the closing. As with all our trades we have a protective stop-loss in place. Due to the volatility in the market place we are using trailing stops.

Oil: UCO = UP, SCO = DOWN

UCO

We are not quite there as far as the moving averages go, but we do have an exception that we have used before and if that occurs again, it will be explained here.

For now our biggest impediment is a zone of resistance created by a “rising window”. If we get a CLOSE above the upper line we will put in a stop-buy just above the high of the candle that did the closing – assuming our exception is in play.

20 year treasuries: UBT = UP, TBT = DOWN

UBT

We have an open trade in UBT. You can see that the price and the red trigger line (8 exponential moving average) were in position above the other moving averages and the resistance line was vanquished per our process.

The trade is with the markets now.

Dollar Index: UUP = UP, UDN = DOWN

UDN

The Dollar Index represents a battle between the U.S. dollar and a basket of global currencies.

If the price rises it means the U.S. dollar is gaining strength and if the price goes down, it means the basket is getting the upper hand.

The UDN represents the basket gaining strength. It has quite a way to go before we believe that an up trend is in place.

That is everything for our Round UP. If you have any questions, etc, please drop me a line: charlesgoddard2020@gmail.com

TTFN,

Charles

Market Close July 8th, 2020

Yesterday UGL was triggered into a trade. We reviewed the position and the risk position. Today I wanted to take a slightly closer look at the trailing stop we employed to mitigate our losses should this trade go against us.

One of our ironclad rules is that we never place a trade without a protective stop – NEVER!

Due to the volatility in the markets, we are employing a trailing stop with all of our trades. Let’s take a look at the chart.

UGL

As you recall we use proxies for our underlying futures instruments. We have used only 5 in my book and we continue doing that as we keep going with that THEORETICAL exercise.

In the case of Gold, the ETF (exchange traded fund) we use is UGL.

You can see in the chart above that we were triggered in at the candle in the yellow box.

At the same time a trailing stop was placed at $56.93, just under support. This is the most likely place we are wrong. We have given the trade room to breathe, but if support is broken, we need to accept the warning that the trend maybe changing.

$65.37 (trade price) – $56.93 (trailing stop) = $8.44

The trailing stop is $8.44 below the purchase price. If the price moves up so will the stop. If the price goes down, the stop will stay where it is and stop us out if called for.

Today, if you look at the chart, the price had a high of $67.11. This means the stop price followed the market price up and was anchored at $58.67 ($67.11 – $8.44).

This means that we just reduced the risk on this trade. It started as $1,688 (200 shares X $8.44). Because the price went up a little and anchored the stop at $58.67, we reduced our position risk from $1,688 to $1340. You have everything you need to figure out how I came to that number.

We are the happiest of campers when our trade attains risk free status. It is the first goal of any trade.

That is it for today. If you have any questions or concerns, make sure you voice them by dropping me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles