Weekly Round – Up to August 27th, 2020

Link to book/video/Free book learning package:

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

To the business at hand. This trading record is updated during the week if there are trades: number of shares, stops, etc.

However, at the weekend, it all kicks off with a review of all charts and an update of the portfolio.

The portfolio that started at $100,000 on January 1st, 2020 now sits at $140,257.10. All trades are recorded in my book or on this blog.

Lets start with the BIG LAD…

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

We currently have an open position in the SSO with a trailing stop currently anchored at $4.37 below the high of $80.48. We purchased this symbol at $70.28 which means that even if the price were to collapse, we would make a profit ($80.48 – $4.37 = $76.11 stop out price, $76.11 – $70.28 = $5.83 profit per share).

To the chart Robin…

SSO

There is nothing more to do here except watch and cheer the trade on.

Gold: UGL = UP, GLL = DOWN

We were in UGL and then stopped out. We are now watching for the price to rise and mop up the overhead supply that represents resistance. These are sturdy traders/investors who bought all the way up and could be now vowing to get out as soon as the price gets back to their buy in price. I want that supply dissipated before entering a trade.

UGL

I have left the markings from the trade we did have. You see the high just before we were stopped out. I like to look to the left as we fulfil our trade conditions. If there is a higher price within the last two months, my buy goes just above the high of the candle that closes above that level.

Other conditions have been met. The blue EMA is above the green EMA. The price has dropped below the blue and then gone back. This is enough for us to buy. It looks like our price will be in the low eighties by the time that resistance level is cleared.

Oil: UCO = UP, SCO = DOWN

UCO

The UP ETF for oil has been flirting with trade. We had a level of resistance to clear thanks to the zone of resistance created by the falling window to the left.

We have our conditions met with a close above resistance and even though blue is below green, our ROC is above zero.

We currently have a stop-buy in at $34.83

20 Year Treasuries: UBT = UP, TBT = DOWN

I did a blog post yesterday because it demonstrated the routine you should be following. The UBT was being watched because we had a trade that was stopped out. There is always the possibility that a new trigger will develop.

UBT added another down candle that caused us to take a look at the inverse: TBT.

TBT

You can see that around position 1, the moving averages have done their work. We have a level of resistance at $16.27 within our two month look back window.

I jumped the gun a little in my last post. We still need a close above $16.27. We would then place a stop-buy just above the brave little candle that CLOSED above resistance.

Dollar Index: UUP = UP, UDN = DOWN

UDN

UDN represents the U.S. Dollar struggling against a basket of global currencies. As the dollar weakens, UDN rises. If the dollar strengthened against the basket, we would be looking at UUP.

We have an open trade in UDN. You can see around position 1 that all conditions were met: blue (21 EMA) above green (55 EMA) = uptrend (one definition) and the red (8 EMA) and the price rose above the blue and resistance. We bought in at $20.67. We have a .51 trailing stop which has been anchored by the high of $21.32 at $20.81. Since our purchase price was $20.67, this trade is also risk free if the price were to collapse. Look at us.

I want to repeat that we take all trades that our process kicks out in these five instruments. If we did not, we are no longer objective. We have inserted ourselves into the decision making. This is not a good thing because over and over again, we have proven to be the weakest link.

Also, it bears repeating that we are in the world of trades. The temptation is to try and figure out why 20 year treasuries are weakening or the dollar is struggling. This would put us back into the trading world.

Since our success is more likely in the world of trades, we don’t give a toss. The reasons are immaterial to us, let others feel better figuring it out.

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

My email address: charlesgoddard2020@gmail.com. I will be most happy to answer any trading questions you may have.

TTFN,

Charles

Market Close August 27th, 2020

As both of you know this is a theoretical trading exercise that commenced in my Basic Trading blockbuster of a book. We use only one simple method and five underlying instruments that cover a broad sweep of the market place. This exercise started with $100,000 and now sits a little over $140,000.

It will continue until 2020 mercifully expires.

Those underlying instruments are typically futures which most of you cannot see except as prices. We use ETFs (exchange traded funds) as proxies in the market. There are ten of them. For each instrument there is one that will rise as the futures rise and one that will rise as the futures decline. This means that they can be used in retirement accounts, or accounts that have some restrictions on them.

I wanted to demonstrate today how this works. We had a position in UBT – the ETF for 20 year treasuries rising. We were stopped out. We keep an eye on this chart, as we do the others, but there is a chance that the stop-out could have been a mere correction: we may see a new trade trigger. In this case, well, let’s look at the chart.

UBT

On the right hand side of this chart you can see that rather than heading back up, this symbol seems to be headed down.

This, then, becomes the time we look at the inverse which is TBT.

TBT

As you can see the price on TBT – the ETF that rises as the underlying instrument declines – is at a trade stage. Before we review that I want to point out that investors in the “trading world” are at this moment trying to figure what could declining 20 treasuries possibly mean. They will listen to “experts” wax on, spouting nonsense because as an expert they are supposed to know. And, dammit, they will have an opinion. I have actually heard an expert give a reason for oil prices rising and then the very next day, give the same reason for oil prices declining.

We do not live in the magical-thinking trading world, we reside in the world of trades. If we get a trade signal based on our process, we place it. What it all means, we leave to others.

To our trade. We have the moving averages doing their work. We can see that the price and the red (8 EMA) have crossed above the blue (21 EMA). Our rules allow for us to look at the ROC as the decider if the blue has not yet crossed above the green (55 EMA), we are ok if the ROC is above the 0 line. It is. We now want to clear the level of resistance that halted the upward price move.

Our stop-buy is placed at $16.33. This is a few pennies above the $16.27 resistance level. (We don’t place trades at even numbers).

OK, make sure you come back Monday to take a look at the “Weekly Round-Up” – could be a scorcher.

Any questions: charlesgoddard2020@gmail.com

TTFN,

Charles

Weekly Round-Up to August 21, 2020

I am trying my hand at a video weekly round-up.

For those of you new to this blog, it is a continuation of a theoretical trading exercise started in my blockbuster book:

Basic Trading: ‘ A Beginner’s Guide to Trading and Investing…PROFITABLY!’

We started at the beginning of January, 2020 and continued until April 30th, 2020 when the book went up on Amazon.

I thought it might be helpful to continue the exercise on this blog until 2020 expires.

For those of you working with the book seeing the trades unfold here might be helpful.

We started with $100,000 and now as of writing, we find ourselves with a balance of: $140,257.10.

All trades are listed in the book or on this blog.

You can take a look at my offer by clicking the following link:

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

It is a book/video combo…

Onto to my self-directed video ( James Cameron was busy)…

Well, I think that is all from me.

TTFN,

Charles

Weekly Round-Up to August 14th, 2020

Welcome to the Weekend Round-UP!

It is that time of the week when we take a look at at least one chart per instrument we are following.

This is a theoretical exercise that continues on from my mammoth best-seller: Basic Trading: ‘A Beginner’s Guide to Trading and Investing…PROFITABLY!’ Luckily for you, available here:

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

In that gem of writing and information we started with a theoretical portfolio of $100,000 on January 1st, 2020 and traded five market instruments until the book was published at the end of April. To prove a point and to let any who need it see the trades unfold, we will continue until 2020 expires.

We use 5 major market sectors that cover a lot of the market and then we use ETFs (exchange traded funds) as proxy. This allows the average person to buy and sell in retirement accounts, etc.

Our method is one of elegant simplicity which will be splained as we go along.

Trades are reported here in detail as they occur between these weekly updates.

At the tail end of the week we were stopped out of one of our trades, so we shall start there.

Portfolio Balance at the start of the week: $140,720.10.

20 Year Treasuries: UP = UBT, Down = TBT

UBT

UBT is the ETF that represents the long side of 20 year treasuries. Our trade opened per our process at $135.89. The trailing stop was $16.04 under that trade price. As you can see the price rose to a high of $147.30. This anchored the trailing stop, that followed the price up, at $131.26. Once the price fell away, we were stopped out at that price.

The net result was:

$135.89 – $131.26 = $4.63 X 100 shares = ($463 loss).

Subtracted from our portfolio, the balance is: $140,257.10

I want to mention as some of you see the 40% gain to date on our portfolio, and maybe extrapolate to the end of the year – don’t do that. The market moves in spurts. This maybe all we see for the year, or maybe we fall back a little.

Bottom line is we stick to our objective process and don’t try to force matters. We let the instruments we are trading come to us.

We will look at gold next.

Gold: UGL = UP, GLL = DOWN

UGL

UGL mimics the rise in gold. GLL the decline. This means that if gold declines, GLL will rise like the Dark Knight.

This chart has markings from a trade we were in and then stopped out of at a profit.

Let’s go through the steps:

In the large yellow box you can see that the blue line (21 exponential moving average) is above the green line (55 EMA). This means uptrend in our simple world. You can guess what the opposite means.

Our trigger is the red line (8 EMA) or the price crossing above the blue line.

So, we have a trigger. We look to the left for about two months (don’t stay where you are for two months – I meant in chart time), is there a higher price than the one that CLOSED above the blue line. Note, it is important that the price CLOSE above the 21, not just cross and scamper back. There is at $64.39. That is resistance. We need a close above that line. We get it and place a stop-buy in just above that close. We are triggered in the smaller yellow box. A trailing stop is immediately placed just under support at $8.48 under the trade price.

The price has a nice little run to the upside and then falls away and we are stopped out at $10 per share profit. Well done us!

The next question is what are we watching for to get back in? You in the back, any ideas?

Yes, very good, that high that you see represents resistance or in this case overhead supply. Some people bought on the way up and then stayed with it as it pulled back. They are cursing their stupidity and have vowed to get out if that price should rise again.

We need that selling pressure to be dissipated before we go back.

We shall sit on our hands in the case of gold until that happens – if it does.

Onward…

Oil: UCO = UP, SCO = DOWN

UCO

Oil has a very flammable character (see what I did there?). It dropped like the proverbial rock (which gave us most of this year’s return). It has been consolidating for quite a while. Our initial roadblocks to a trade are still in place, though an exception may kick in in this case. We will examine it if that is what occurs. This exception is in our process in the book.

We were waiting for a close above the zone of resistance you can see on the chart, which UCO kindly provided.

We have a stop-buy in at $34.83 for UCO

Dollar Index: UDN = DOWN, UUP = UP

The dollar index represents a slightly different battle. If it rises, it means the U.S. Dollar is rising against a basket of global currencies and we would want UUP. If it declines, it means the global currencies are strengthening against the dollar and we would want UDN.

To the chart, Robin…

UDN

The chart shows where we entered the trade after our moving averages lined up and the resistance line was vanquished. Don’t use the high of a random spike that you see near the start of the resistance line. There is no telling what trader craziness caused that. Where possible, I try not to use the break down of the price as my high. I try for the high of an UP candle.

Our trailing stop is .51 behind the price and we are still in this trade. The recent high was $21.24. Subtract the stop and we get $20.73. This is above the trade price of $20.67. This means that even if the price collapses we are risk free at this point.

As we have talked about, we are aiming for the risk-free zone and celebrate when we get to it for obvious reasons. It also means if we get enough push back i.e. the price goes back across the 21, but we don’t get stopped out, then the price heads back up, we begin to quiver. Not because we have seen a spider, but rather because we may have a chance to pyramid: add to the existing position without taking on more risk.

This is what we are doing with our initial trades: probing, but not in an X-files kinda way, until we get on a trend that we can ride.

We want to be in place should a Big Move occur, and occur they do. That is why we are patient and take every trade our process kicks out. It is a little tougher using trailing stops to pyramid, but things are so volatile at the moment and likely to remain that way for awhile, we shall remain that way for awhile.

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

SSO

Not much to say here. We have an open trade. You can see the moving averages line up after a push back and then the price closes back across the blue line (21 EMA). Looking to the left we see a higher price at the horizontal black line. We got in at the red line just above the close above resistance. This trade is still in place.

I think that is enough for this week. If you have anything you want to ask me about the foregoing, or anything in the investment world, drop me a line. If I don’t know the answer, I shall make something up.

charlesgoddard2020@gmail.com

TTFN,

Charles

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