in times like these, I'm working on some things that will
hopefully help us all in the future. By the way I will be making a
video on the reversion to mean systems, I added some new logic to
that Trend/Pullback which will prevent it from going through that
crap in the future.
However one thing I've noticed from my cycle indicator is when
you see the End of Cycle, it almost always produces a nice short.
Clearly this last one at the highs would have been a monster short
trade but most are not like that but still give decent trades, but
with super tight stops. I've went over about 30 years and I pulled
out tons of examples to get a method. I'll show a few here.
Basically I would consider issuing a short signal if we get an
end of bull cycle on my cycle indicator on the daily SPX chart,
especially if there's some divergence confirmation on other
indicators. After these crazy moves in the market, I think we
all like the idea of being able to have a tight stop. So quite
simply my stop out is a confirmed price over the End of cycle
indicator. For this I have placed the BPT MA Deluxe indicator on
price, you can see it on the charts. If that BPT MA confirms over
the End of Cycle indicator, what I mean by confirm is not just
going over the cycle by a tiny amount, but going over and then a
subsequent candlestick takes out that first candlestick high. So
you have an uber tight stop if you are wrong. Most of these
play out when I look over the history, a couple fail and you would
simply stop out for a tiny loss - I show an example of a stop out.
so this is preliminary but I'm considering adding this as a sub
system. Here's some examples from the daily SPX, again I
could have added 15 more but simply adding a few for now. The last
image shows a trade that would have simply stopped you out for a
small loss
these are thing kind of things I like to work on when I'm not
trading much and on a Friday.
as far as those examples below I gave for end of bull cycle
shorts - the thing about systems, for that the entry and stop is
easy. It's the exit that's difficult to determine, i.e where do you
close the trade how, how long to hold it etc. That's how a lot of
systems are, you might find and entry is easy but the profit exit
conditions are not so easy to determine especially when the trades
are a mix of trades that only produce small or average pullbacks
and ones that produce large pullbacks
Posted by rollerblader on 13th of Mar 2020 at 01:20 pm
Steve/Matt many thanks to both of you for the info and charts
you both post daily, wish I had this info 25 years ago. Under
normal circumstances would you set a stop-limit order or
stop-market order? Reason I'm asking is that in a few past
experiences when I've set a stop-limit order my stock has not
gotten sold as price blew past my order and I wound up re-setting
my order and selling at a much lower price. I guess both types of
orders can have negative impacts. Just my 2 cents and hoping for
input by others. Stay healthy everyone.
examples of end of bull cycle shorts
Posted by matt on 13th of Mar 2020 at 01:01 pm
in times like these, I'm working on some things that will hopefully help us all in the future. By the way I will be making a video on the reversion to mean systems, I added some new logic to that Trend/Pullback which will prevent it from going through that crap in the future.
However one thing I've noticed from my cycle indicator is when you see the End of Cycle, it almost always produces a nice short. Clearly this last one at the highs would have been a monster short trade but most are not like that but still give decent trades, but with super tight stops. I've went over about 30 years and I pulled out tons of examples to get a method. I'll show a few here.
Basically I would consider issuing a short signal if we get an end of bull cycle on my cycle indicator on the daily SPX chart, especially if there's some divergence confirmation on other indicators. After these crazy moves in the market, I think we all like the idea of being able to have a tight stop. So quite simply my stop out is a confirmed price over the End of cycle indicator. For this I have placed the BPT MA Deluxe indicator on price, you can see it on the charts. If that BPT MA confirms over the End of Cycle indicator, what I mean by confirm is not just going over the cycle by a tiny amount, but going over and then a subsequent candlestick takes out that first candlestick high. So you have an uber tight stop if you are wrong. Most of these play out when I look over the history, a couple fail and you would simply stop out for a tiny loss - I show an example of a stop out.
so this is preliminary but I'm considering adding this as a sub system. Here's some examples from the daily SPX, again I could have added 15 more but simply adding a few for now. The last image shows a trade that would have simply stopped you out for a small loss
these are thing kind of things I like to work on when I'm not trading much and on a Friday.
as far as those examples
Posted by matt on 13th of Mar 2020 at 02:39 pm
as far as those examples below I gave for end of bull cycle shorts - the thing about systems, for that the entry and stop is easy. It's the exit that's difficult to determine, i.e where do you close the trade how, how long to hold it etc. That's how a lot of systems are, you might find and entry is easy but the profit exit conditions are not so easy to determine especially when the trades are a mix of trades that only produce small or average pullbacks and ones that produce large pullbacks
Steve/Matt many thanks to both
Posted by rollerblader on 13th of Mar 2020 at 01:20 pm
Steve/Matt many thanks to both of you for the info and charts you both post daily, wish I had this info 25 years ago. Under normal circumstances would you set a stop-limit order or stop-market order? Reason I'm asking is that in a few past experiences when I've set a stop-limit order my stock has not gotten sold as price blew past my order and I wound up re-setting my order and selling at a much lower price. I guess both types of orders can have negative impacts. Just my 2 cents and hoping for input by others. Stay healthy everyone.
for protective stops, I don't
Posted by matt on 13th of Mar 2020 at 02:30 pm
for protective stops, I don't use limit orders, I want to be out