Market Close October 8th, 2020

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Look at me working my poor little fingers to the bone because there has been a development in our charts.

There is something that I realize I have not mentioned for a while. I can’t help but feel responsible for that oversight, mainly because it is me that didn’t mention it.

Most of the symbols (8 out of 10) that we use for this exercise are double-ups. This means that if the S&P 500 were to rise 1%, the SSO would rise 2%.

If the S&P declines 1%, the SSO would decline 2%.

We use our protective stops with every trade we make, but you can see how that importance is magnified with these symbols.

We are actually taking a look at the SSO this evening.

To the chart Robin…

SSO

As both of you know, SSO is our stock market proxy for the S&P 500 rising.

We did have a trade on the rise and were stopped out. Now we watch both symbols – UP & DOWN – for our next trigger. It could be with SDS as the trend switches to down, or it could be back into SSO as the trend continues up with a correction having taken place.

The blue EMA (21) is above the green EMA (55) telling us the uptrend is still intact. Since we always trade with the trend (this business is already tough enough without swimming against the current), we look to the long side to match.

The price and the red EMA (8) have had a nice little break dipping below the blue EMA. By crossing back above the blue, it has told us to giddyup.

Now that the moving averages have told us to enter a trade, we look to the left for a higher price. There is one at $76.68. This is resistance. We need our price to CLOSE above that level, or we take the risk that our price will bounce off the resistance (it is not just a clever name, after all).

You can see that today we got that CLOSE above the resistance level and we have put in a stop-buy just above the brave little candle that did the closing at $77.41.

If that price is hit we are in. Details will be shared here: position size, stop and risk level.

That’s it for me. Any questions about this (remember I am just giving you what you need to trade, the book and the videos go a little deeper), or your trading world, drop me a line: charlesgoddard2020@gmail.com.

TTFN,

Charles

Market Close October 7th, 2020

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A post during the week can only mean one thing: a trade has been triggered.

Let’s get right to the chart.

TBT

I had previously reported that TBT – our stock market for 20 year Treasuries declining in price – had done all it needed for us to put in a stop-buy.

Let’s review our check list.

  • Blue EMA (21) is above the green EMA (55). This one of our definitions of trend. Blue over green means uptrend.
  • The price and the red EMA (8) which were below the blue, but have now crossed above acts as our trigger.
  • We now look to our left for any price higher than the candle that closed above the blue EMA
  • We have one so that we place our stop-buy just above that “resistance” level at $16.47
  • The price took a little meander across the buy line and as a result – even though it dashed back again – triggered us in.
  • Our trailing stop begins life just under support at $15.34, or $1.13 under the trade price.

Details:

10% of the portfolio = $14,000/$16.47 = 850.03, rounded to 850 shares.

Risk = $16.47 – $15.34 X 850 shares = $960.50 (<$2800 (2% of portfolio))

We have an open trade per our process. All we can do now is wish it, “God Speed, little trade”.

If you have any questions about the trade or anything from your trading world, please drop me a line.

charlesgoddard2020@gmail.com

TTFN,

Charles

Market Close October 5th, 2020

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The close provided us with some fodder. Let’s take a look.

TBT

TBT is our ETF proxy in the stock market for 20 year treasuries declining. Since most of you have accounts that don’t allow shorting, we use this symbol to profit as the treasuries themselves decline.

You can see on the right hand side of the chart a significant jump.

The checklist for our trade process:

Price or red EMA (8) has closed above the blue EMA (21) – check

The blue EMA is above the green EMA (55) uptrend – check

Look to the left. Is there a higher price in the most recent 30 days?

There is a higher price a little more than 30 days, but you have to use you loaf. It is prudent to get a CLOSE above recent resistance.

We have a stop-buy in at $16.47.

If the market obliges and triggers us in, details will appear here.

SSO

SSO is our stock market proxy for the S&P 500 rising. As you can see, the price has crossed above the blue EMA, the blue was above the green EMA – uptrend.

We look to our left and see a recent high at $76.68.

In this case we are waiting for a CLOSE above that level to enter a stop-buy.

Next steps -if any- for both symbols will be detailed here.

Any questions re: the above, or anything in your investing world, drop me a line, charlesgoddard2020@gmail.com

TTFN,

Charles

Weekly Round-Up to October 2nd, 2020

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Let’s get this edition of the Weekly Round-Up under way. The Glastonbury Tor is sitting just above us, so all is well.

The theoretical portfolio that started at $100,000, now sits at: $142,625.10.

From January 1st, 2020 to time of writing is a return of a little over 42%.

This is a nice return considering we are only using 5 instruments and a very basic trading method. It demonstrates what can be done with a process being the most important feature in our trading. We took a probing approach to each trade – limiting our risk. We entered every trade for which we received a signal per our process. Everything documented – for you doubting Thomas’s.

It is important that you understand that to be a consistent trader you must be in the objective world of trades. If the process produces a trade that you decide, “no, wait, I don’t think so, I read something about gold…doing whatever” you have just re-entered the subjective realm of the trading world where all is dark and mysterious. On that path you will meet doom ( I must stop watching Lord of the Rings).

We are happy with our return, even if that is it for the year. We know that the market doesn’t move in nice tidy averages; it is explosive. The main thing is we will not press matters: we will let the market come to us, “here, kitty, kitty…”. Patience is a virtue. Wait for the conditions of your process to be met in totality. Don’t jump because you are impatient and it “looks like”. We don’t do anything based on “looks like” or “feels like”, we jump according to our rules.

I will demonstrate ours as we go.

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

SSO

Here is what we are looking for: we check the trend by the position of the blue EMA (21) versus the green EMA(55). In the case of the SSO, the blue is above the green indicating by this definition of trend that it is up. We now will only enter a long trade (we want to go with the trend). We don’t go short in this exercise for a number of reasons. If the the makings of a short trade are appearing, we would look to the inverse, SDS.

We now take a look at our trigger: the price and or the red EMA (8) crossing above the blue.

If that happens and a trade is commenced, it is reported here in detail. A trade being opened or closed are the only other posts that appear here during the week. Well, if something momentous occurs to me, I have been known to post it up.

Back to the subject at hand, we are sitting on ours for now.

Gold: UGL = UP, GLL = DOWN

UGL

UGL is our ETF proxy for gold rising. We did have a trade until early August. I have left the markings on the chart. If we look to the right, you can seen that the blue and the green EMAs are having a little chat. We shall have to wait and see what they get up to next.

Oil: UCO = UP, SCO = DOWN

SCO

Oil has been a slippery crittur for a while now. We did extremely well shorting it by way of SCO.

I should mention that I tend to look at both sides each day, unless one is in a pronounced trend. In that case the other side is going the other way – not ours, not really necessary to look at it.

You can see that the latest price candle has taken a bit of a jump. We need our moving averages to do their work before we do ours.

20 Year Treasuries: UBT = UP, TBT = DOWN

TBT

I am sure the thought of looking at treasuries has your hearts beating like the proverbial drum.

Treasuries and our next chart of the Dollar Index are with us to round out the line up. It is important to trade instruments that are affected by all market and economic stimuli (or as broad a sweep as possible).

In this way we usually have something making a splash. All the cylinders in an engine are not up at the same time and the same is true of different slices of the market.

As I have mentioned before, you could quite easily trade these symbols indefinitely and not miss a beat.

Alright, alright, to the chart…

As with other charts we need our moving averages to lead the way. They have decided to bunch together. It will be interesting to see which side the red (8) emerges. It is quite often the leader of the pack being the “fastest” i.e. the shortest.

Another sit on our hands chart.

Dollar Index: UUP = UP, UDN = DOWN

UDN

The Dollar index is actually a battle between the U.S. Dollar and a basket of weighted global currencies.

If the price of the Index rises it means that the U.S. dollar is gaining strength and if the price is declining it means the opposite. The UDN rises as the price of the Dollar Index declines. Translation: the U.S. Dollar as been declining against the basket for a while. It began to push back late August. If we looked at the inverse of UDN, which is UUP, we would see the exact opposite.

As you can see from the markings on the chart we had an open position for sometime in this symbol. We have seen a push back where we were stopped out.

The question now is was that a correction of an uptrend or the start of a downtrend?

By other definitions we are seeing the start of a downtrend. For this exercise, however, we will wait for the EMA definition to confirm.

I cover this definition in my book and video package – what a segue, I know!

Find details here: https;//ABEGINNERSGUIDETOTRADINGANDINVESTING.gr8.com/order_form.html

I think that is it for this week. if anything occurs, it will be reported here.

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

It can be anything from your investing world.

TTFN,

Charles

September 28th, 2020

It is a bit unusual to have a post when we don’t have a trade to look at, but there was something I wanted to show you.

I thought you might find it interesting – it could happen!

Let’s take a look at the chart for UUP, which is the ETF for the Dollar Index rising. The Dollar Index is the U.S. Dollar vs. a basket of global currencies. They are in a cage fight. When the index is rising, it means that the U.S. Dollar is gaining strength against the Global Basket. When the index is declining, it means the opposite.

As I have mentioned a number of times, here in the World of Trades, we don’t give a toss for rationale. Let that be the purview of the traders that live in the trading world.

We act on what we see only. In the case of this exercise which is a continuation of the one started in my book. We are up 42% so far this year with just 5 instruments and a very simple trading method.

All the trades have been recorded. Since the end of April, when the book was published, the trades have appeared as they occur.

Go here to buy a copy of the book and video package.

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

To the chart, Robin…

UUP

We had a position in the inverse of UUP (UDN). I failed to notice a divergence that would have gotten us out with a slightly bigger profit than we did.

Not only did I fail to notice the divergence which the ROC as a leading indicator will show us from time to time – in this case that there was a risk the price was about to fall, I also missed the divergence on the inverse.

If you look at the chart above, you will note a vertical black line that runs through the low price candle and then up through the ROC in the upper pane.

You will be excited to see that while the price formed a new low, the ROC did not. Divergence. The ROC as a leading indicator was warning us that the price was about to rise.

This is handy to get out of a short position, if we had one, or prepare us to buy.

I put a trend line on the price and when it was CLOSED above, we could have gone long. Our protective stop would have been placed just under the horizontal line which I have deemed a support level.

For our trading exercise we shall stay faithful to the rules of engagement we laid out and not be distracted by the siren call of a crafty ROC.

(Though we will use the divergence/trend line combo to get us out of trades – provided I see it, that is).

Part of my video package details trading with the ROC. How to use the divergence and the indicator as a trigger. As well as using it to calculate price targets. This trading method has an over 75% success rate. It is being patient that is the tough part.

At least you have something to watch for in your charts, up and down. (Scroll down to look at the divergence at the high I missed).

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

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

TTFN,

Charles

P.S. Saw an amusing line on FB: “Wear your mask, it is not like they are asking you to wear a Toronto Maple Leaf jersey”.

U.K. types, substitute “Manchester United shirt”.

Weekly Round – Up to September 25th, 2020

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The weekly Round – Up: our favourite time of the week when we take a look at a chart of each of the instruments we follow. There are only five, so hang in there.

During the week the only posts – usually – on this site are trades that have taken place, to open or close a position. We do not have any trades open at this time. Which I hope says something to you; that you don’t have to trade all the time. Wait. Patience is a giant aspect to successful trading. Don’t force things.

We have been trading 5 instruments since the start of the year with a basic method. All trades have been recorded.

The portfolio that started at $100,000 is now: $142,625.10.

We are pleased with the return so far. If that is all there is for the year, so be it. The market makes explosive moves. It does not do the nice averages we see in the financial pages.

Let’s get started by taking a look at the S&P 500.

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

SDS

We were stopped out of a trade in SSO. It seemed to be weakening further. For this reason we take a look at its inverse. It stands to reason if the UP symbol for the S&P is declining, there maybe something for us on the other side.

You should be checking both symbols UP and DOWN for while. Of course if one side is trending strongly, there won’t be anything for you on the opposite side.

The SDS is making a move. Not us, though, just yet. The blue EMA (21) is still below the green EMA (55), which to us is a downtrend. To enter a long trade here is going against the trend, something we don’t like to do.

So we shall wait for the blue to cross the green and if the red EMA (8) and or the price is still above the blue, we shall look a little more seriously at a trade.

Gold: UGL = UP, GLL = DOWN

GLL

GLL rises as gold declines. There was a lot of yelling about gold going to moon, but it seems to be sideways to down. We are looking at GLL because its inverse is looking like a short sell.

GLL resembles the SDS. There is some upside looking noises, but our process has not yet been fulfilled.

Oil: UCO = UP, SCO = DOWN

UCO

Oil has been in a trading range for some time. In all likliehood consolidating from its massive fall.

We don’t really care about the why of what it is doing as we live in the world of trades.

We need, the blue EMA to be above the green EMA and then the price or the red EMA to cross above the blue EMA. We look left for a couple of months to check for resistance, if none then we act.

20 Year Treasuries: UBT = UP, TBT = DOWN

TBT

TBT has been sideways for awhile. An interesting feature is that the EMAs all bunched together. Usually where ever the fastest EMA goes (in this case the 8 EMA red), the others follow.

We can see the red sticking its little head out of the group. We will be taking a look at UBT, there maybe something there for us. Stay tuned.

Dollar Index: UUP = UP, UDN = DOWN

UUP

We were stopped out of a trade in the inverse UDN that we held for some time. This may indicate a change in trend for the dollar index. For it to be rising, it means the U.S. Dollar is strengthening against a basket of global currencies after quite a decline.

Why? Who knows. Maybe there is hope that Biden will win the election, maybe that they think Trump will.

It has always been a fascinating thing that people are willing to place trades on such things when they have no idea how much of that news has already been priced into the market. That is the trading world for you. It is tough enough to keep things going in the right direction acting on only what we see as it adheres to our process. It is no wonder 90% of traders don’t make money if they are placing trades in such an imprecise manner. It is the world of trades for us.

That is a wrap. Thanks for stopping by. Drop me a line if you have any questions that have arisen because the the above, or anything in your trading world whatsoever.

TTFN,

Charles

Update September 22, 2020

We had our only trade stopped out yesterday, September 22nd, 2020. In honour of the equinox, my photo is of Stonehenge.

Let’s take a look at a chart…

Dollar Index: UUP = UP, UDN = DOWN

UDN

This is the symbol that I made an error not getting out sooner as detailed yesterday.

Not sure why I did not include the fact that we were stopped out also. As they say, it doesn’t rain without pouring.

The high of $21.37 anchored the trailing stop at $20.86 which was finally reached.

The details are as follows:

$20.86 – $20.67 (trade price) = .19 X 1200 shares = $228.00 profit

The updated portfolio = $142,625.10

The chart shows that the price has continued on down. It will be worth having a look at the chart of UDN’ s inverse, UUP.

That’s it for this evening.

TTFN,

Charles

True Confession September 21st, 2020

I indicated in the last instalment that I had made an error and would be confessing today.

Here it is. The only open trade we have currently is the symbol UDN. This is the stock market proxy for the Dollar Index declining (meaning a basket of global currencies is strengthening against the U.S. Dollar).

In the process that we adhere to like limpets, the exit from a trade is as the result of the trailing stop being hit.

There is one other way, which inexcusably, I missed.

Let’s take a look at the chart.

UDN

Just as a quick aside, the weakness displayed today almost took us out. The stop is anchored at $20.86. Maybe tomorrow – exciting!

The key focal point is a black vertical line. That line runs through the high attained by the price. It also carves through the ROC, WHICH IS NOT AT A HIGH. This is a divergence…a warning.

Traders have different processes for divergences. Some will take profits, others will tighten stops. They don’t close out the trade immediately because it is only a warning. All is well in the world could be restored by the ROC moving back in lock step with the price.

My process is to draw a trend line and get out of the trade if that trend line is closed below (in this case).

You can see where I should have exited if I had had my wits about me.

Since the stop is so close to the low of today, I will leave things as they are and let the trailing stop do its work, if it feels so inclined.

The bottom line is we should have been out at a larger profit than the one we will realize if the stop is triggered.

I’m afraid that is life in the fast lane.

Any questions, please drop them in the comments section.

TTFN,

Charles

Weekly Round – Up to September 18th, 2020

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The Round – Up is upon us. It is the time when we look at charts of all the symbols involved in our exercise as we wend our way to the expiry of 2020.

During the week the only entries to this blog are the actual trades as they take place and their details: position size, risk management, etc.

The portfolio currently sits at $142,917.10. This represents a gain of a little over 42% since January 1st, 2020. This is quite good. Especially since there is always a risk when doing this sort of thing live – so to speak – that you will end up with a lot of egg on your face.

I want to say once more that because the markets move in explosive spurts, we may still be sitting at this level at the end of 2020. We follow the process we set out and let the markets come to us. We don’t force anything.

Our short position in oil represented by SCO was stopped out earlier in the week leaving us with one open position: UDN.

Let’s start there…

Dollar Index: UUP = UP, UDN = DOWN

UDN

UDN rises as the U.S. Dollar weakens against a basket of global currencies.

We have had this trade for some time. Take a look at the resistance line at $20.48. The blue EMA (21) was above the green EMA (55) indicating by one of our definitions of trend that we have an uptrend. We trade with the trend, consequently we are looking for a trigger to the upside. That trigger is either the red EMA (8) or the price crossing above the blue EMA. The price crosses below the blue and then pops back up – our trigger. We have resistance at $20.48 preventing us from placing a trade immediately. We don’t want to enter a trade and then have it bounce off resistance. We wait for a CLOSE above the resistance level and enter a stop-buy just above that. This was at $20.67.

Our trailing stop was placed .51 under the trade price at support. Where, if broken, we are probably wrong and will be automatically taken out of the trade.

The trailing stop has followed the price up and when it created a high at $21.37, our stop was anchored at $20.86. Since we bought in at $20.67, even if the price totally collapses at this point, we are profitable and therefore risk free.

I have made an error with this trade. We should already be out of it. I will confess my sins tomorrow in full gory detail.

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

SSO

The SSO mimics the rise in the S&P 500. We were stopped out and the price by crossing the green EMA looks like it might be heading in the other direction.

This is when we look at the inverse of the SSO, the SDS to see if there is a trade for us there.

To the chart, Robin…

SDS

It is always interesting to compare the charts that represent the opposite or inverse of one another. Take a couple of minutes with them, I am going to grab a coffee.

The SDS rises as the S&P declines. We will keep an eye on both sides of this battle in the coming days. There maybe a trade in there for us at some point.

Gold: UGL = UP, GLL = DOWN

UGL

The markings of a recent trade have been left on the chart in case you find them useful.

For us to enter a new trade in UGL, we need our EMAs to do their work and a CLOSE above resistance at $77.07. The high of $83.85 represented overhead supply at one point. It has been dissipating with the sideways price movement.

There is much noise in the trading world that gold is going to the moon, Alice. Well, we are staying glued right here in the world of trades and actually wait for our process to tell us the moon beckons.

Oil: UCO = UP, SCO = DOWN

UCO

Not much to say here. We are looking at the long side of oil with this chart. We were stopped out of the short side earlier in the week at a small loss thanks to the trailing stop. You can scroll for details.

20 Year Treasuries: UBT = UP, TBT = DOWN

TBT

As you cast your eye on the right hand side of this chart you can see that the EMAs have bunched together – not social distancing at all. We are on the edge of our seats wondering which way the red EMA will go. The red will go first because it is the shortest and therefore most mimics the price itself.

We have a black horizontal line representing resistance and a red horizontal line doing the same for support.

Coming out of a bunching, EMAs generally get right down to work telling us what they think. For that reason I have shown the line that I need a CLOSE above to spring like a panther as is my wont into action.

If the red EMA (or price) crosses the red horizontal line, it would probably behoove us to take a look at the inverse of TBT.

That just about does it for this week.

I have an in-depth trading course launching soon. For an outline, please drop me a line at: charlesgoddard2020@gmail.com.

And, once again, for a deeper look at how we conjure the magic above, click here:

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TTFN,

Charles

Market Close September 16th, 2020

It is with sad tidings that I report to you tonight. Unfortunately we were stopped out of SCO, the ETF that represents oil declining.

Let’s take a look at the chart and then the details…

SCO

We were triggered into a trade based on our rules. The difference was we made use of the exception and got in when the blue was still below the green. The exception being that the ROC is above 0.

I am hereby cancelling that exception.

The high that you see was set at $19.64. Our trailing stop was placed at $3.02 under the purchase price. Consequently the stop was anchored at $16.62, which was triggered today for a loss.

We purchased at $17.27. Our loss is as follows:

$17.27 – $16.62 = .65 X 800 shares = (-$520).

The loss adjusts our portfolio down to: $142, 397.10

That was painful, but you can see how the trailing stop took out some of the sting.

And as you know, if the symbol we are looking at is starting to look like a short sell, we look at the inverse, which in this case is UCO. This is the ETF that mimics oil rising. There is no trade there. We will look at it in the Round-Up if nothing changes there in tomorrow’s session.

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

That’s it from me.

TTFN,

Charles